(Bloomberg) — The Bahamas is blaming developed nations for a series of devastating hurricanes that have left them deeply in debt as they seek to sell $1 billion in carbon credits this year.
The ecosystem surrounding the country’s 700 islands has the capacity to store large amounts of carbon, Prime Minister Philip Davis said in an interview in New York on Thursday.
Davis is trying to monetize this by turning to the growing international market for offsets after receiving little help covering the billions of dollars in damage caused by several massive storms.
“Most of our debt is the result of losses and damage incurred over many years and many hurricanes,” he said a day after Hurricane Fiona passed some of the islands. “I’m not waiting for the international community. I’m looking for ways and means to help myself.”
Businesses around the world are increasing demand for voluntary carbon credits as a way to offset their emissions. According to BloombergNEF research, the market will grow from around $1 billion currently to $190 billion per year by 2030.
Known for its warm, turquoise waters and white-sand beaches, the Bahamas has a 100,000-square-mile carbon sink that Davis says is one of the largest in the world. The government, which is in the process of having the loans checked by a third party, has already received offers ranging from $250 million to $400 million. Davis said they were probably worth four times as much.
The islands, which are 50 miles off the Florida coast at their closest point, have been battered by Hurricanes Matthew, Irma and Maria in recent years. In 2019, Hurricane Dorian caused more than $3 billion in damage after destroying homes and inundating tracts of land.
Moody’s Investors Service has since downgraded the country’s credit rating to junk, while S&P Global Ratings has also downgraded the country three times. They also referred to the pandemic affecting the tourism sector.
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The national debt rose to 103% of gross domestic product last year, placing the Bahamas among the most indebted countries in the world. Davis, who took office last year, says he is targeting debt of around 50% of GDP by the end of his five-year term.
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Bahamas bonds maturing in 2032 have fallen to 63 cents on the dollar from around 92 cents at the start of the year amid growing concerns about the debt burden, according to data compiled by Bloomberg.
Rich nations, which burn the most fossil fuels, have an obligation to help countries hardest hit by climate change, like the Bahamas, Davis said.
“Our debts essentially relate to matters to which we have not contributed,” he said. “The developed world, which has been using fossil fuels for centuries, I think is due.”
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