#2: $2,000,000,000 per year: the curious case of carbonomic in the Suriname jungle.

The debate around potential payments for carbon credits has taken a surprising turn. Several prominant people are peddling the idea that Suriname can receive $2 billion ANNUALLY in carbon credit payments. What are the data and assumptions behind these carbonomics?

To understand the logic behind this figure, I watched Rudolf Elias, current senior advisor at Ernst & Young and former Managing Director of the Suriname State Oil Company - Staatsolie - on De Dave Podcast (S3 E9). Dave van Aerde has an important platform at a time when more and more people get their news from online talk shows, and with 22.5K subscribers, he has a significant reach in Suriname to sway public opinion. Mr. Elias is a well-respected figure in the Suriname community, as is evident by his introduction on the show as a "bigi dagu" (Big Dawg).

Mr. Elias claims that the current 15 million hectares of tropical forest in Suriname "suck 30 million tons of carbon dioxide out of the atmosphere and store this in the soil every year." It is estimated that Suriname emits ~10 million tons of CO2 annually, thus the net sink is 20 million tons. Further, he explains, at a rate of $100 per ton on the "free market", this will amount to $2 billion a year by 2030 to 2032.

Using the same logic, the Democratic republic of Congo will earn $16 billion a year, and Brazil will earn an additional $47 billion a year. The Amazon and Congo Basin countries will earn a combined $110 billion. And this will happen without building a single factory or planting any seeds.

The problem is not Mr. Elias's math but his understanding of soil carbon, primarily soil organic carbon (SOC), dynamics. All soils reach a SOC saturation point that depends on different physical, chemical and biological soil parameters. Therefore, trees put carbon in the soil but carbon is released back into the atmosphere via different biochemical processes. The carbon does not continuously accumulate in the soil. This is a good thing because if carbon was continuously removed from the atmosphere, life on earth would be quite different from what it is today.

In the tropics, most of the carbon is stored above ground, e.g. in the trees themselves (Figure B), whereas in colder environments, more carbon is stored below-ground because carbon decomposes slower in colder climates (Figure A). From the grainy map in Figure A, it appears that Suriname has between 50-100 tons of SOC per hectare. This will not increase yearly. However, it can decrease through deforestation or conversion to agriculture.

Above ground biomass, e.g. carbon stored in trees, also reaches an equilibrium. A publication in the scientific journal Climate Change, titled: A science-policy interface in the global south: the politics of carbon sinks and science in Brazil (Lahsen 2009), described how two teams of scientists, one from Brazil and the other from the USA, using the same data collected by the most advanced scientific measurements at the time, could not agree whether the Amazon was in fact a carbon sink or source. Despite decades of science on this topic, well-meaning people continue to believe that forests, and their soils, only absorb CO2 and no not release carbon back into atmosphere.

Data from Suriname indicate that some coastal areas are a net carbon sink because they started recovering (regrowing naturally) when plantations were abandoned after abolition of slavery in 1863. Indeed, forests can be at different stages of collapse or regrowth, and act as a sink or source at timescales of decades.

Another problem is Mr. Elias's prediction that the price of carbon will increase to $100 per ton by 2032. The current price per ton on the voluntary carbon market (VCM) is around $7 per ton. The VCM's credibility was recently challenged in The Guardian (2023) with headlines like rainforest carbon credits schemes misleading and inefficient, and more than 90% of rainforest carbon offsets by biggest certifier are worthless . The VCM is still recovering from these findings and improving their stanards to avoid fiture negative publicity. Regardless, if Mr. Elias's math was correct, hundreds of millions of tons of certified carbon credits would enter the VCM every year, which would make the price drop rather than increase.

This does not mean that Suriname cannot get payments for its carbon offsetting program. The government of Suriname is wisely following the UN REDD process to get credits certified and all the documents are publicly available . One of the most important variables that determines future payments is the Forest Reference Emissions Level (FREL), a historical rate of deforestation. In a previous post , we saw that the current deforestation rate is 0.02 - 0.07%, or about 3,000-10,000 hectares a year. In a future post, I will explain how carbon payments are directly related to the FREL.

It should be clear that the notion that Suriname can receive $2 billion per year in carbon credit payments is simply ludricous.

I don't have a crystal ball and could be wrong about a few factors. The carbon price on the VCM could suddenly increase with the right political momentum. Suriname could also abandon the UN-REDD process altogether and make a bilateral deal with a single buyer. For example, Guyana sold 17.5 million carbon credits to the American oil company Hess at a unit price of $60, a one-time deal. It should be noted that Hess also closed a lucrative oil deal with Guyana, and my guess is that when you look at the combined numbers, Hess came out on top.

Mr. van Aerda explained the importance giving Mr. Elias a platform to spread his carbonomic gospel: "his words have power because he is not someone who says just about anything" (zijn woord heeft kracht want hij is niet iemand die iets zomaar zegt). I don't know if Mr. Elias was deliberately trying to deceive or if he was simply mis-informed.

What is clear is that the carbon credit debate is highly politicized. Millions of USD are at stake and well-paid consultants are trying to get a piece of the pie making claims that are not always based on fact or science. Recent information shows that the government has plans to expand agricultural production at the forest frontier, thus requiring us to update our projected deforestation numbers with UN REDD and perhaps adjust our FREL which would delay carbon credit certification.

Suriname has 0.2% of land area under agricultural production, one of the lowest in the world, and simultaneously one of the highest rates of food price inflation in the world . Increased food production means delayed carbon credit payments but it also means fewer people suffering hunger and malnutrition. Or perhaps we should get earlier payments to subsidize food, rather than grow our own food and become self-sufficient? These are difficult trade-offs to consider, and the people making these decision, or arguing for earlier carbon credit payments, are not the ones who are hungry.

Instead of a complete ban on agricultural expansion, we should have a more nuanced debate. This should not be about if we should increase food production but rather what kind of food production is best considering our tropical soils and climate, and at what scale? We don't have a history of scientifically informed national debates in Suriname unfortunately, and it certainly doesn't help when so-called experts dazzle us with voodoo carbonomics.