The Tribune

• Banker: ‘Be ahead of game’ if you’re convinced

• Urges ‘don’t wait’ on trading platform’s creation

• Bahamas must be on ‘intellectual par’ with rivals

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must “take a gun to a gunfight as opposed to a Kalik bottle” if it wants “to be ahead of the game” in developing carbon credits and their trading, a well-known banker is urging.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told a digital assets webinar that The Bahamas must take the lead in developing its own carbon trading platform and valuations if it believes there is “a significant depth” of natural resources that can be monetised into a multi-million dollar commodity.

Arguing that this nation “cannot wait” for the global carbon industry to make the running, he added that The Bahamas needs to be “on an intellectual par” with rival players if it is to “negotiate equitable pricing” for seagrass and mangrove assets responsible for trapping huge quantities of carbon dioxide circulating in the earth’s atmosphere.

Responding after he was asked about potential links between digital assets and carbon credits, both sectors that the Davis administration has targeted as priorities for economic development, Mr Bowe said that when it came to the latter The Bahamas needs those with the necessary environmental and financial knowledge to be the ones talking publicly about the potential and what needs to be done.

“It’s important to highlight we need those with the knowledge to speak, not those that get the microphone to put in front of themselves,” he added. Mr Bowe said The Bahamas needed a clear vision to act now, and develop a strategy for converting its environmental assets into a carbon-trapping commodity, if it truly believes this gives it a competitive advantage over the rest of the world.

“If we build it, will they come?” he asked. “We cannot wait for the carbon credit industry to establish around us. If we believe we have a significant depth of carbon credits that can be traded, then we need to take a gun to a gunfight as opposed to a Kalik bottle. We need to set up where we are trading on an intellectual par.

“We don’t need to be on of the same financial, economic and I’m going to say political power, but we need to be fighting with the same intellectual power. That means when we talk about carbon credits, if we have a well-established financial services sector with competent individuals that will help us as a government and citizens to formalise a testing platform that allows us to negotiate equitable pricing for our natural resources we understand have value....

“Then what’s important is that we let persons who understand the natural resources and what the value is, they help us establish the value and then trade it. In this overall discussion, what we have been seeing, because the terms are sexy, people start talking about them but, as my grandmother would say, you may be ignorant but don’t open your mouth and prove it to the world.”

Mr Bowe reiterated that The Bahamas should develop a carbon credit trading platform to “be ahead of the game” if it was convinced it can develop a competitive advantage in this area. Philip Davis QC, the Prime Minister, has indicated that the Government is moving to do exactly that by confirming it is in initial talks with FTX Digital Markets, the Bahamas-domiciled crypto currency exchange, to develop a mechanism for the listing and trading of the country’s blue carbon credits.

However, Eric Carey, the Bahamas National Trust’s (BNT) executive director, told Tribune Business in a recent interview that this nation “won’t get a dollar from carbon credits for many years” as he backed calls for more direct local ownership in the fledgling industry.

He explained that the process of identifying, verifying and certifying this nation’s various “carbon sinks” - chiefly its seagrass and mangrove assets - to determine their monetary value could take an unknown number of years to accomplish.

Estimates that this could require a $50m-$60m investment were not unrealistic, he added, revealing that the BNT is seeking to work with the Government to determine the potential value of The Bahamas’ national parks and Marine Protected Areas (MPAs) when it comes to sequestering carbon dioxide from the earth’s atmosphere.

And Mr Carey said he “absolutely” backs more direct Bahamian ownership in the entities being formed to fulfill the Davis administration’s carbon credit ambitions, given that the still-evolving sector is being “touted as a very lucrative” opportunity from both a career and investment perspective.

“As has been said by everyone, there’s a process that takes a long time,” he told Tribune Business. “We have to identify our stocks. We have to go through verification and certification. We won’t get a dollar from carbon credits for many years. It’s a long process that requires sustained investment....

“It depends how quickly we proceed for the first 18-24 months. I don’t think that, until we’ve gone through that immediate period of a year-and-a-half to two years, we will be able to say whether it’s a three, four or five-year period. It will be determined by how difficult it is to map, find good sinks and get international verification. That’s the big question. It will take us the first year to two years to make that determination.”

Philip Davis QC, in unveiling legislation designed to regulate the trading of Bahamian carbon credits, indicated that the Government is hoping to move slightly quicker than the timeline outlined by Mr Carey as research has already been completed on “what is now considered to be the largest seagrass meadow in the world in Bahamian waters”.

The findings on that 5,000 square kilometre seagrass plot are due to be submitted to Vera, the environmental verification group, for certification of its potential blue carbon credit value. This process will ultimately convert such environmental assets into a commodity by monetising them.

The research on this plot was conducted by Beneath The Waves, which was founded in 2013 as a non-profit focused on Marine Protected Areas, threatened species, deep sea conservation and blue carbon, during a shark study in Bahamian waters. It has subsequently been awarded the management contract for Carbon Management Ltd, together with a 49 percent equity stake in the latter business that will oversee The Bahamas’ carbon market participation.