The government is drafting legislation to establish a carbon credit exchange in the Bahamas to bolster its ambitions to make the nation “a global hub” for emerging industry.
Ryan Pinder, the Attorney General, told the Senate during his contribution to the budget debate that his office was working on the Carbon Trading Bill 2022. He added, “To advance the monetization of carbon credits , we will introduce specially drafted legislation to Parliament to establish a carbon credit exchange in the Bahamas.
“The desire is to create a rules-based framework that will establish The Bahamas as the regional, and hopefully global, hub for trading carbon credits. We will participate in the vertically integrated carbon credit market. The Bahamas leads the world on this issue.
As for “monetization” itself, Mr. Pinder added: “We are also working so that our blue carbon credit efforts can begin to be monetized in this fiscal year 2022-2023. We are on track to begin our scientific verification exercises and the monetization of our blue carbon credits. »
These credits will be entered into a database until they are ready to be monetized. The government has already identified $300 million in coastal assets that it seeks to offer on the carbon market. The Climate Change and Carbon Market Incentives Bill tabled in April was the first step to securing a carbon credit payment system for the country.
Mr. Pinder said: “Developing a leadership position in carbon credits is not just about providing a revenue framework for government, but it is creating a new industry that will be vertically integrated and provide opportunities for Bahamians to participate. to each element of the new boundary.
“Bahamian scientists will be trained in the technical components identifying blue carbon sequestration, Bahamian financial services professionals will have opportunities in the newly created capital markets. The Bahamas’ leadership position in this area will contribute positively to economic diversification.
The global carbon credit market mainly focuses on “green” carbon credits related to forests and grasslands. The Bahamas aims to be one of the first countries to begin selling credits based on ocean “blue”.
Elsewhere, Mr Pinder said the Bahamas was planning to revise its regulatory framework for aggregate extraction given the significant backfill generated by marina excavation and other activities. “A long overdue regulatory reform concerns the exploitation of natural resources in the Bahamas. The approach is now an industry-led approach without a modern regulatory envelope to ensure that the best international standards are met in the exploitation of natural resources” , he added.
“We are a country where there is foreign direct investment in real estate development projects; many of them require mining. We also have a commercial aggregate operation. We will present benchmark international legislation on best practices for overseeing mining in the Bahamas, another achievement of the “Davis administration’s election manifesto”.
Regarding efforts to bring The Bahamas to 100% compliance with global anti-money laundering standards, Mr. Pinder said: “Over the years, spanning multiple jurisdictions, The Bahamas has fought to comply with international financial regulations, so much so that there has been concern raised over several quarters about excessive regulation and the resulting challenges to doing business.
“It’s a difficult balance. The fact is that the Bahamas must always exceed its weight in this new era of international regulation. Recognizing this, when we debated in April, I informed the Senate that the Bahamas is now compliant or largely compliant with 38 of the 40 recommendations. [set by the Financial Task Force] and removed from the EU gray list a few months before.
“Since then, I am pleased to inform you of the timely submission of our reassessment of the last two of the 40 recommendations – Recommendation 8, dealing with non-profit organizations, and Recommendation 15, dealing with regulation and effective supervision/control of virtual asset service providers.
“This has required some legislative changes to non-profit financial services and digital asset legislation… We hope that at the fall plenary our submissions will be favorably considered and we will be compliant or largely compliant in 40 of the 40 FATF recommendations.