NASSAU, BAHAMAS — Prime Minister Philip Davis yesterday revealed the government will directly receive 85 percent of the initial revenue generated from carbon credit trading.
During his contribution to the Carbon Credit Trading Bill 2022, Davis also noted that the government will also jointly own 49 percent of the company which will manage this nation’s carbon credits.
He said a Cabinet Committee tasked with advising Cabinet on the management and monetizing framework for the Carbon Credits had analyzed three unsolicited proposals from entities proposing to manage this nation’s carbon credits.
Based on the committee’s recommendation, Cabinet selected the Project Management proposal by the NGO Beneath the Waves, operating under the Bahamian company Carbon Management Ltd.
“The government entered into a Heads of Agreement with Carbon Management Ltd. for several compelling reasons,” Davis said.
“First of all, the scientists at Beneath the Waves have been doing shark research in the Bahamas for over ten years and had identified what is now considered to be the largest seagrass meadow in the world in Bahamian waters. They are already familiar with The Bahamas and, as scientists, they have a vested interest in our marine resources beyond their monetary value.
“They are truly passionate about conserving the marine environment,” said Davis.
Davis noted that the company has established a dynamic team of distinguished scientists like Dr. Austin Gallagher, as well as the leading seagrass scientist in the world, Dr. Carlos Duarte.
The team includes notable Bahamian financial professionals, Anthony Ferguson and Antoine Bastian, who Davis noted have extensive experience in the securities industry and capital markets arena.
Davis said: “Of the three proposals received, Beneath the Waves also offered the most attractive management fee of 15 percent for its end-to-end solution. So, we are working with a world-class team of experts at a very attractive rate compared to the alternatives; They have also proposed that the government own 49 percent of the Bahamas-based Management company, Carbon Management Ltd., with two percent being held by local NGOs.”
The Prime Minister reiterated that the Heads of Agreement ensures that the government not only receives 85 percent of any potential revenue, but we also receive 49 percent of the Management company’s downstream revenue from fees and any other revenue derived by the management company by the sale of carbon credits in the secondary markets.
According to Davis, the ocean-based credits will allow the government to tap into a completely new source of revenue that will undoubtedly benefit the Bahamian people as the funds will assist the financial challenges the country faces as a result of climate change.
“We are talking about a high-growth global market that is still in its infancy but is projected globally to be worth possibly a few hundred billion by 2050,” he continued.
“The Bahamian government had a duty to ensure that it does not miss out on this opportunity for revenue generation and that we claim our piece of the pie. In fact, we ensured that we got in early to maximize our revenue earning potential – we will be first in line when it comes to Blue Carbon Credits,” said Davis.
Davis said that the Carbon Trading Bill proposes to Register and regulate businesses wishing to operate and do business in the carbon credit space; register and regulate Carbon Trading Exchanges.
It also sets a rigorous framework for the verification and accreditation requirements to list a carbon credit on the exchange.
The verification body must be recognized as adhering to international standards or recognized by the International Accreditation Forum, he said.
The legislation also permits a carbon credit to be linked to a digital asset under the DARE Act or other financial instruments like an option, swaps, and futures contracts.
“We are exploring the opportunity of establishing a Carbon Exchange in The Bahamas with FTX, where we will trade our carbon credits. This will be an independent exchange and separate from the FTX Cryptocurrency Exchange. I will say more about this development as those discussions advance,” said Davis.
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