Guyana’s low-carbon model for resource-led development

Guyana is making a bold attempt to pursue sustainable development while capitalizing on its fossil fuel wealth. The small South American nation with Caribbean links has emerged as an unlikely laboratory for one of the 21st century’s most pressing challenges: how to harness natural resources while pursuing genuine environmental stewardship.

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A low-carbon vision meets untold natural resource wealth

Guyana had embarked on an ambitious journey toward sustainable development long before ExxonMobil’s massive oil discoveries off its coast in 2015. In 2009, recognizing the value of its vast rainforests in the fight against climate change, Guyana launched its pioneering Low Carbon Development Strategy (LCDS). This wasn’t merely an environmental policy; it represented a fundamental rethinking of how a developing nation could approach economic growth.

The strategy’s origins lay in a holistic understanding of Guyana’s natural wealth. The country’s rainforests, covering roughly two thirds of its territory, store an estimated 19.5 billion tons of carbon dioxide equivalent. Rather than viewing these forests as obstacles to development, Guyana recognized them as vital assets in the global fight against climate change.

An early partnership with Norway—which pledged up to $250 million to help preserve Guyana’s rainforests—established the LCDS’s credibility. It provided vital seed funding, helping Guyana develop the institutional capacity and technical frameworks necessary for environmental asset management on a national scale.

The 2015 oil discoveries placed Guyana at a crucial decision point—over 11 billion barrels of oil equivalent were enough to transform the nation’s economic trajectory overnight. Many nations might have abandoned their environmental commitments in the face of such wealth. Instead, Guyana chose to update and strengthen its low-carbon strategy, creating LCDS 2030.

The balancing act of LCDS 2030

Guyana’s approach reflects a sophisticated understanding of its natural capital. Rather than treating environmental protection and resource extraction as mutually exclusive, Guyana developed parallel value streams from its natural assets.

The country’s forests, for instance, generate revenue through both sustainable forestry and carbon credits, which monetize environmental stewardship. In 2022, Guyana made history by becoming the first nation to receive private sector validation for forest conservation-based jurisdictional carbon credits, leading to a landmark $750 million agreement with Hess Corporation.

The groundbreaking deal involves the sale of 37.5 million carbon credits (about 30 percent of Guyana’s credit issuance) between 2022-32, with increasing minimum prices from $15 to $25 per ton and a 60 percent revenue share for Guyana if market prices exceed these floors. The credits are independently verified under the United Nations (UN) ART TREES standard and meet UN social and environmental safeguards.

The country has further pushed boundaries by launching a Global Biodiversity Alliance aiming to develop a biodiversity credits system that extends beyond carbon, creating a comprehensive framework for valuing ecosystem services. By combining carbon credits, biodiversity credits, and sustainable forestry income, Guyana’s sustainable finance approach offers a new paradigm for how developing nations can maximize the value of their natural assets while preserving them for future generations.

Similarly, rather than treating petroleum wealth as an end in itself, Guyana views it as a means to finance its climate transition. Oil revenues are channeled into renewable energy projects, climate-resilient agriculture, coastal protection, and green job training. For example, the government has invested 12 percent of the nation’s gross domestic product in upgrading drainage and irrigation networks and expanding rehabilitation of sea and river defense structures at critical locations. These investments are complemented by planned water treatment facilities and comprehensive flood management programs.

By 2027, Guyana is projected to produce 1.2 million barrels of oil per day, rivaling some OPEC members. But unlike many oil producers, this production surge is balanced with concrete environmental commitments.

The power of inclusion

The most innovative aspect of Guyana’s approach lies in its governance framework. The Multi-Stakeholder Steering Committee overseeing the LCDS represents a comprehensive model of inclusive decision-making, drawing representatives from government, civil society, Indigenous organizations, the private sector, and academia. Specifically, Indigenous communities—traditional stewards of the forests—are integrated through village-level consultations, dedicated representation in decision-making, and capacity-building programs, ensuring they play a central role in shaping Guyana’s national sustainable development strategy.

Guyana’s global leadership

The strength of Guyana’s commitment to this balanced approach was powerfully articulated at the 16th Conference of the Parties to the UN Convention on Biological Diversity in 2024. There, Vickram Bharrat, Guyana’s minister of natural resources, presented his nation’s journey not as a compromise, but as a pioneering model for development:

“As a developing, oil-producing nation with ambitious infrastructure projects, we face the challenge of balancing economic growth with environmental preservation. However, through the Low Carbon Development Strategy 2030, we are committed to ensuring that development proceeds without compromising our natural capital. Our forests will continue to serve as vital carbon sinks and biodiversity hotspots, supporting both climate action and ecosystem resilience.”

The minister’s words were backed by one of the most ambitious conservation commitments globally: expanding Guyana’s protected areas from 9 to 30 percent of its land mass by 2030.  At COP29 in Azerbaijan, Guyana further demonstrated its leadership by receiving the Transparency Award and co-chairing the Forest and Climate Leaders’ Partnership. Barratt's call to move beyond theoretical debates to “measurable, accountable action” underscored Guyana’s role as a practical innovator in global climate solutions.

Lessons for a world in transition

Guyana’s ability to transform potential contradictions into complementary strengths offers a compelling model for managing the energy transition. The same government that oversees a rapidly expanding oil sector is also pioneering biodiversity credits and expanding protected areas. This isn’t coincidental—it reflects a nuanced understanding that modern development requires balancing multiple priorities and revenue streams.

The strategy treats oil wealth not as an end goal, but as a bridge to a sustainable future. Oil revenues are systematically channeled into building the infrastructure, institutions, and human capital needed for a low-carbon economy. This approach recognizes that the oil boom, while significant, is temporary. The benefits of preserved forests and biodiversity, however, are permanent.

For other oil producers, particularly those in the developing world, Guyana offers a template that could be adapted to local conditions. The success of this model is already providing compelling evidence that developing nations need not choose between economic development and environmental stewardship. Instead, they can pursue a more balanced path that recognizes and monetizes the value of all their natural assets and builds toward a more sustainable future.

Liliana Diaz is a nonresident senior fellow with the Atlantic Council Global Energy Center and an adjunct professor of energy, climate policy, and markets in the Americas at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

Image: Kaieteur Falls, Guyana. (Sorenriise, Wikimedia Commons)