Guyana’s carbon market experience is showing the Global South how nature can fund the future
By Danielle Swain
Year after year, COP after COP, climate diplomacy has asked the developing world to be ambitious without answering the most basic question… who will pay for it?
In the Global South, where countries face rising seas, stronger natural disasters and fragile public finances, that question needs an answer. Small island developing states have made bold promises under the Paris Climate Agreement, including renewable energy, coastal protection, resilient infrastructure and ecosystem restoration. However, ambition without finance is a dream.
This is where Guyana comes in.
The small country on South America’s northern coast is leveraging its expertise for countries around the world just like them.
In a presentation organised by the Commonwealth Climate Finance Access Hub (CCFAH) Pradeepa Bholanath, Guyana’s Senior Director for Climate Change and REDD+ in the Ministry of Natural Resources, set out how the country has built one of the most closely watched climate finance models in the developing world: a system that turns standing forests into revenue and channels those earnings into national development, Indigenous communities and climate resilience.
Titled “Mobilising green finance for NDC implementation: Lessons from Guyana’s carbon market experience”, a regional knowledge exchange between Caribbean Community Climate Change Centre (CCCCC), the United Nations Development Programme (UNDP), the World Bank and the UNFCCC Regional Collaboration Centre (RCC) Caribbean, Guyana’s case matters for a reason bigger than carbon.
What is emerging from Georgetown is not a forest-credit story but a broader political and economic argument from the Global South. Countries rich in ecosystems should not be trapped in a model where nature is only considered valuable once it’s cut down, extracted, dredged or burned. In Guyana’s story, forests are not empty land waiting for “development”. They are living national assets that store carbon, safeguard biodiversity, regulate water, support livelihoods and offer a foundation for a new kind of economy.
That argument has force in Guyana, where about 85% of the country’s landmass is still covered by forest. Bholanath said the country’s forests span roughly 18 million hectares and that deforestation has remained below 0.1% a year, despite pressures from mining, infrastructure and agriculture. That long record of keeping forests largely intact has allowed Guyana to position itself as a high-forest, low-deforestation jurisdiction and to further insist that such stewardship should attract serious international finance.
For many countries in the global south, that is the core lesson and Guyana isn’t presenting itself just as an exception but offering its experience as a solution.
Guyana’s journey began in 2009, when it launched its Low Carbon Development Strategy (LCDS) under President Bharrat Jagdeo and entered a pioneering forest-climate partnership with Norway. That first phase, Bholanath explained, helped Guyana build the science, governance and monitoring systems needed to build a credible climate finance programme. The country earned about US$227 million through that arrangement and used the money to support renewable energy, sustainable land management, adaptation, resilience and community development.
The second phase pushed Guyana into the carbon market and in December 2022, the country became the first to receive jurisdictional-scale ART-TREES credits, with 33.5 million credits issued for the 2016-2020 period.
Since then, Bholanath said, Guyana has received annual issuances for 2021, 2022 and 2023, roughly 7 to 7.5 million credits a year. Through its agreement with Hess, now Chevron, Guyana has secured prices rising from US$15 a tonne for earlier credits to US$20 and then US$25 in later years. A marked jump from the US$5 a tonne paid under the original Norway arrangement.
So far, she shared, Guyana has earned more than US$350m from carbon credit sales. That alone would be enough to make governments across the Caribbean pay attention. But the deeper significance of Guyana’s approach is that it treated carbon as an entry point instead of a destination.
Again and again, Bholanath stressed the importance of aligning national systems with international rules such as monitoring, reporting, safeguards, verification and transparency. The point was partly technical, but also strategic. Countries with stretched institutions can’t afford to build one reporting system for the UN climate regime, another for donors, another for private carbon standards and yet another for future Article 6 markets. Guyana’s attempt has been to build one architecture that can serve several purposes.
That is why Guyana’s experience resonates globally. Other small states may not have vast forest cover, but many do have mangroves, marine ecosystems, seagrass beds, watersheds or biodiversity assets that are globally significant and locally underfunded. What Guyana is demonstrating is that the global south can try to shape these financial systems rather than waiting to be shaped by them.
And this is where the biodiversity comes in. Asked during the discussion about what comes next, Bholanath made clear that Guyana is already looking beyond carbon. Forests, she said, are not just carbon stores. They provide biodiversity services, watershed services, ecotourism value and a wider range of ecosystem benefits that current markets are only beginning to recognise. The carbon market, in other words, may be the first financial instrument Guyana has managed to scale but it’s not the only one it wants to build.
That shift is important because one of the main criticisms of carbon markets is that they can flatten nature into a single metric. A forest becomes valuable because of the carbon it stores, while its species richness, ecological complexity and cultural meaning are treated as secondary. Guyana’s message is that this is too narrow.
Bholanath pointed directly to biodiversity credits, green bonds, blue bonds, debt-for-nature swaps and conservation trust funds as part of the next wave of instruments now under examination. She said Guyana is testing and collaborating the feasibility of several biodiversity financing tools with international partners and expects the findings to help inform the wider membership of the Global Biodiversity Alliance, a coalition birthed in the country’s capital that it’s using to push for finance that recognises ecosystem services beyond carbon.
Over decades, countries rich in biodiversity have been told that conservation is a global good, while the burden of protecting ecosystems has remained largely national and often deeply unequal. The rainforest stays standing, the mangroves border the coast, the rivers stay clean and yet the countries doing that work are still expected to borrow, depend on aid or accept underpriced climate payments.
Guyana is effectively saying that this model no longer holds whilst offering a proven solution. Its carbon market programme is built on a larger political philosophy that sovereignty matters and countries should decide how their natural capital is used. Climate finance should be linked directly to development priorities and local communities must be treated as a priority.
Bholanath stressed that stakeholder engagement has been central from the beginning, and that independent verification has been essential to maintaining credibility.
She highlighted that at least 15% of annual carbon credit revenues are directed to Indigenous Peoples and local communities. In 2023, 2024 and 2025, about US$22.5m each year was transferred to around 242 Indigenous villages, financing roughly 3,000 projects centred on food security, livelihoods and local development priorities chosen by the villages themselves.
That detail is critical. In theory, market-based conservation can sound aspirational but in practice, who really benefits? Guyana’s effort to channel revenue back into Indigenous villages is part of what gives its model political legitimacy at home and relevance abroad. It suggests a framework in which communities are not custodians for somebody else’s climate targets, but participants in a development strategy shaped around biodiversity and self-determination.
There are, of course, unresolved questions. Guyana still needs to deepen its institutional capacity, especially as it prepares for the more complex compliance markets emerging under Article 6 of the Paris Agreement. Bholanath acknowledged that the country is considering a national registry and that existing institutions will need to expand.
And there is no guarantee that what has worked for Guyana will transfer neatly elsewhere. Many factors like geography and politics – globally and locally influence outcomes. In addition, Guyana spent more than a decade building systems before reaping market awards.
However, in a world where climate finance remains woefully inadequate, Guyana has managed to turn natural capital into real revenue, translating the science and theory into concrete action and capital and is now trying to widen that logic to biodiversity itself. Bholanath also shared that when Guyana was building it’s carbon market capacity, it was in a time before many instruments existed so other countries may not take as long.
For SIDS and other countries of the Global South, that may be the most important lesson of all. The future of climate and development finance can’t rest only on the carbon content of forests or the goodwill of donors. It will have to reckon with the full value of living ecosystems, their biodiversity, watersheds, coastlines, and role in food security and cultural survival. Guyana again has moved early into that space.
In doing so, Guyana has become a model of whether the Global South and the wider world can build a system in which protecting nature is not a cost to bare, but a source of finance and power.
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