BHARRAT’S BIG GAMBLE

Jun 14, 2009 Features / Columnists, Peeping Tom

---

If what the President of Guyana is hoping for comes true, it would be like Guyana discovering oil without the help of CGX. The only difference being that we would not need to invest a cent and our new found source of wealth would be clean development.
President Jagdeo’s climate change initiative and his new Low Carbon Development Strategy are like an egg hanging five thousand feet above ground level on a thin thread. If that thread breaks then it will all come crashing down.

The thread on which this initiative stands is Copenhagen in December where the President is hoping that the developed world will agree to two sets of things – firstly, a significant cut on greenhouse gases, and secondly, rewarding countries such as Guyana for not cutting down their forests.
Guyana estimates that it can gain hundreds of millions of dollars as consequence of these two actions. If the developed world agree to significant cuts in emissions, then the carbon trading market will increase and Guyana which will be in a position to trade carbon credits may capitalize on the sale of credits to countries and companies which may be required to cap their emissions but which may be unable to do so. These companies and countries, in order not to be penalized, would then have to buy carbon credits for exceeding their emission levels and Guyana is hoping to have a great deal to sell since we have a lot of virgin rainforest.

At the same time, Guyana is hoping that the developed world will decide to reward countries which promise not to cut down trees i.e. it is hoping the developed world will reward Guyana for simply doing nothing.
Guyana may be hoping for too much. First of all, a great deal rests on what the American’s decide and the initial indications are that the Americans are not willing in a time of recession to ask their industry to bear the additional costs of cutting greenhouse gas emissions. The American administration supports the need for taking action on the environment but the administration has also made it clear that in a time of recession, this cannot come at a price to boosting production and putting Americans back to work.
President Jagdeo’s climate change initiative may therefore be ill-timed. He is banking on a major decision at Copenhagen in December but the signs are not that clear cut that the deal he is envisioning is going to happen. The Europeans in fact have already indicated that only cautious cuts in emissions are likely to be agreed to by them from now till 2020, and these cuts would not go far enough to bolster the carbon markets much less to lay the foundations for countries like Guyana to be paid for not chopping down their forests.

A Low Carbon Economy sounds like a pipe dream, especially considering that Guyana does not have a national industrial policy and in fact industrialization outside of sugar and bauxite is very limited within the local economy. A Low Carbon Growth Strategy is however necessary if Guyana is to sell its proposals. It is hardly likely that Guyana would have any chance of impacting on the consciences of the world if it stands up and argues for greater emission cuts when it runs an economy which in itself does not utilize a great deal of alternative energy sources.

The Low Carbon Development Strategy also proposes that Guyana develop an information technology park. Guyana is apparently priding itself as an ideal point for the provision of “outsourcing” services. Again the presence of a national industrial and technological strategy would have been most helpful. At least it may have answered the question as to whether Guyana has not missed the bus when it comes to these services and whether we have the requisite human resources to allow us to compete against giants such as India which have made inroads into this sector.

Perhaps we can learn from the experience of Barbados who was supposed to be a regional forerunner in information technology and see how well that country has done and how long it has taken them before we move more aggressively towards the creating of this information technology park.
If on the other hand, there is a dramatic turn of events in December at Copenhagen, then Guyana could benefit significantly and its foresight in drawing up a Low Carbon Development Strategy can prove to be extremely beneficial. Guyana stands to gain considerably if the international community commits to significant cuts and to a special deal for avoided deforestation.
The thread upon which these deals are hanging is tenuous at the least. Come December we will know for sure whether the gamble that our President is taking is likely to be blessed with luck or doom. Or in other words whether Guyana will finally find its long lost El Dorado or whether like we, like Sir Walter Raleigh, are chasing after a mythical dream.

---

---