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In a groundbreaking move, The Bahamas is leveraging its vast marine and coastal ecosystems to position itself as a leader in the burgeoning field of Green Finance. As revealed in a recent Opalesque Roundtable discussion, the country is on track to become a significant net exporter of blue and green carbon credits, tapping into substantial investor interest and setting new standards for sustainable finance.

The full transcript of the 2024 Opalesque Bahamas Roundtable can be downloaded here: https://www. opalesque.com/RT/RoundtableBahamas2024.html

Harnessing Natural Capital

Antoine Bastian, CEO of Genesis Fund Services Limited, highlighted The Bahamas’ unique position in the carbon finance landscape. “The Bahamas has the world’s largest seagrass meadows, which accounts for approximately 25% of the world’s seagrass,” he noted. This natural asset, along with the country’s extensive mangrove forests and coral reefs, positions The Bahamas as a potential powerhouse in the carbon credit market.

Innovative Legislative Framework

The Bahamas has taken decisive steps to capitalize on its natural resources sustainably. Bastian pointed out two key pieces of legislation: the Carbon Trading Act and the Carbon Credits Initiatives Act. These laws establish a comprehensive framework for the creation, issuance, and trading of carbon credits, aligning with the United Nations Paris Agreement Article 6 provisions.

This legislative groundwork allows The Bahamas to participate actively in the fast-growing voluntary carbon markets, creating a new revenue stream while promoting environmental conservation.

Monetizing Blue Carbon

The country is moving swiftly to establish its national carbon trading regime. A carbon credits registrar has been set up, along with an independent agency, Carbon Management Ltd, responsible for monetizing the country’s carbon assets.

Bastian revealed that the initial focus is on blue carbon resources, primarily oceanic and marine carbon sinks like seagrass meadows. “We’re partnering with leading scientific agencies and research institutions to complete the comprehensive mapping, quantification, and ongoing monitoring of those resources,” he explained.

The goal is ambitious but achievable: to generate and sell the first batches of Bahamian blue carbon credits by the second quarter of 2025.

Meeting Investor Interest

The Bahamas’ foray into carbon finance has not gone unnoticed by the investment community. Delphino Gilbert Cassar, Head of Business Development & Fintech at Equity Group, noted a “massive surge of interest from major Wall Street, global firms, family offices and institutional investors who are keen to participate.”

This interest extends beyond mere profit- seeking. As Paul Winder of Deltec Bank and Trust pointed out, there’s a significant intergenerational wealth transfer occurring, with new investors increasingly focused on “saving the planet” and aligning their investments with values around sustainability and social impact.

A Holistic Approach to Sustainable Development

What sets The Bahamas apart is its holistic approach to carbon finance. The country isn’t just looking to profit from its natural resources; it’s creating a virtuous cycle of conservation and development.

Bastian explained that 92.5% of the proceeds from carbon credit sales will flow directly to the government, to be channeled into a new sovereign wealth fund. This fund will be dedicated to advancing the UN’s Sustainable Development Goals, investing in clean energy, climate-smart infrastructure, marine protection, education, and healthcare.

The Bahamas is not just participating in the carbon market; it’s setting new standards for integrity and transparency. Gilbert Cassar emphasized that the country is “creating a gold standard for ESG investing, one that is anchored in quantifiable, verifiable, and governable metrics of environmental and social impact.”

By partnering with respected organizations like Verra and adopting rigorous verification methodologies, The Bahamas is ensuring the credibility and quality of its carbon credits.

Conclusion

The Bahamas’ initiative in blue and green carbon finance represents a significant leap forward in sustainable finance. By monetizing its natural capital through a robust, transparent, and environmentally conscious framework, the country is not only creating new economic opportunities but also setting a powerful example for how small island nations can lead in the fight against climate change.

As the global focus on sustainable investing intensifies, The Bahamas is positioning itself at the forefront of this trend, offering high-quality, impactful investment opportunities that align with the growing demand for genuine ESG products. This innovative approach to Green Finance is breaking new ground, meeting substantial investor interest, and potentially transforming The Bahamas into a key player in the global carbon market.