The government released its draft Carbon Markets and Greenhouse Gases Regulations last week, which lays out the process for the sale of carbon credits by a company managing those credits, and reveals that the prime minister will be responsible for final approval of an asset purchase.

The Office of the Prime Minister's (OPM) website explains that the regulations offer information on the country's emission reduction initiatives and its emission allowances.

The document, found on the OPM website, provides a draft application form for the registration of a management company and an application to purchase carbon credits. It also lays out the details for a company that wishes to engage in emissions reductions initiatives, and outlines what a company's responsibility is if it comes across any new carbon sequestration assets within the borders of The Bahamas.

The draft regulations explain that participating in carbon trading is prohibited unless that entity is registered with the Securities Commission of The Bahamas.

"No person shall carry on the business of carbon trading in, or from within The Bahamas, unless that person has been registered by the Securities Commission in accordance with section eight of the Carbon Credit Trading Act, 2022," the document states.

"Any person who contravenes the provisions of paragraph (1) commits an offense and is liable to a fine of one hundred thousand dollars, or up to six months imprisonment or both such fine and imprisonment."

It adds: "Where a company is desirous of carrying on the business of carbon trading in or from within The Bahamas, that company shall — (a) be registered with the Securities Commission in accordance with the provisions of section eight of the Carbon Credit Trading Act; and (b) apply to the registrar as set out in form I of part I of the first schedule and pay the fee specified in part II of the first schedule."

The document also explains that the minister of finance is able to enter into a management contract with a a successfully registered company though only after taking advice from the Climate Change Advisory Unit and taking "into consideration a recommendation by the unit as to whether the company is fit and proper; and has the scientific and technical capacity to manage or sell a specified class or type of carbon credit".

After a company has satisfied the requirements to sell carbon credits and is issued a permit, it will be up to the discretion of the prime minister to allow the sale of those credits moving forward, after he as taken advice from the registrar of the National Emissions Registry.

"Where the government of The Bahamas is approached by an approved party who is desirous of purchasing carbon credits, prior to entering into any contractual agreement for carbon trading the registrar shall — (a) ensure that all carbon credits are verified and certified; (b) give consideration to withholding as follows: (i) no less than two percent of carbon credits from the sale for overall mitigation in global emissions (hereinafter called OMGE) and no less than five percent of carbon credits from the sale for share of proceeds (hereinafter called SOP) to support the provision of resources for adaptation, or:

"(ii) OMGE or SOP figures as agreed to within a bilateral, multilateral, or contractual agreement entered into by the management company;

"(c) Where SOP and OMGE is withheld under an Article 6.4 project, the SOP and OMGE will be directed to the appropriate accounts as indicated in the UNFCCC Article 6.4 Rules, Modalities and Procedures.

"(d) Where SOP is withheld under an Article 6.2 or voluntary market project, the percentages of SOP will be allocated to the specified national investment sub-fund in accordance with regulation 413 or agreed to within a bilateral, multilateral, or contractual agreement entered into by the management company;

"(e) Where OMGE is withheld under an Article 6.2 or voluntary market project, the percentages of OMGE will be directed to an appropriate account as indicated in UNFCCC Article 6.2 Guidance or an account designated by the Bahamas National Emissions Registry (NER)."

The registrar is also responsible for maintaining a registry of accounts that document carbon credit transactions to any party, entity or individual in an effort to track carbon credit issuances.

Management companies do have an obligation to issue reports at the end of March annually and could be fined for not doing so. These regulations are meant to compliment the Climate Change and Carbon Market Initiatives Act, 2022.

The post Govt releases draft Carbon Markets Greenhouse Gases Regulations appeared first on The Nassau Guardian.

The post Govt releases draft Carbon Markets Greenhouse Gases Regulations appeared first on The Nassau Guardian.

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