The Low Carbon Development Strategy

Jun 14, 2009 Features / Columnists, Ravi Dev

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The new Low Carbon Development Strategy, announced last week by President Jagdeo should have come as a surprise to Guyanese. Over the last two years, the President has been rather single-minded in his promotion of the conservation of our forests in the global efforts to deal with the dangers that climate change pose to the planet. It is only natural that as the leader of a poor developing country, he has united whatever interests he may have as an environmentalist to those that seek to further our country’s development.

Forests, of course –especially tropical forests – play an invaluable role in controlling the amount of carbon dioxide, which is the major contributor to the greenhouse effect that causes global warming, in the atmosphere. There is more carbon stored in trees that in the entire atmosphere of earth and deforestation, at present, pumps out some twenty percent of annual harmful emissions – more than that of all the vehicles in the world. Not surprisingly, parallel with the efforts to reduce emissions from machines was the one to halt the rate of deforestation. Moral suasion centring on the deleterious effects on “Mother Earth” was the major armament deployed against the major deforestation countries – such as Brazil and Indonesia.

It did not dawn on many of the early “environmentalists” – as on many ordinary Guyanese even today – that there ought to be an economic value placed on the reduction of emissions by reducing deforestation. If the world was willing to pay countless billions annually to reduce emissions, not only from vehicles but from other sources such as factories to prevent global warming, ought there not to be a mechanism to compensate countries for the prevention of deforestation that performs the same task for the rest of the world? That world finally decided that the answer was “yes” a year and a half ago at Bali and the UN is supposed to come up with a mechanism of compensation at the end of this year at Copenhagen. The agreement, was bureaucratically labelled Reduced Emissions from Deforestation and Degradation (REDD).

But the agreement still focuses on “emissions” and their reduction. The countries that are in line for compensation are those that have been rapidly deforesting recently and that will now promise to clean up their act. President’s Jagdeo’s contribution has been to take the discourse to a new level – to ask what about those countries that did not rape their forests but rather conserved them in rather pristine condition? Doesn’t this action in sequestering carbon away from the atmosphere also have economic value? While he may not have been the first person to pose the question, as an economist, he early on saw the benefits for Guyana since sooner or later the answer to the question had to also be “yes”.

The UN body working on the new arrangements to succeed the Kyoto Protocol has just finished a meeting in Bonn and there are three more scheduled before Copenhagen. While there is still a ways to go, there has been some progress in accepting the Guyana position that envisages that a carbon trading mechanism be instituted to compensate for sequestered carbon. One major hurdle to overcome would be the position of Brazil, which has the largest block of forests standing (even after all the criticised deforestation) and is seen a key to any future agreement. Brazil is also of the view that countries must be compensated for their conserved forests but rather than the cap and trade route that would allow polluters in the developed world to trade allowances with the forested countries – and so “get off the hook” for their past and present violations, they prefer direct contributions.

Brazil also is very leery of the various stipulations that trading schemes may seek to impose on the conserving countries – which may work to hinder their development into first world status. Brazil is proposing that it will (and has already) set aside stipulated (and vast) areas of its forests for conservation – and even reclamation. It has established a fund (the Amazonian Fund) to compensate the inhabitants and further their development – much along the lines proposed by President Jagdeo in the LCDS. The major difference is that Brazil is insisting that the developed countries that caused the present crisis in the first place must contribute to the fund with no preconditions excepting that the areas stipulated to be conserved must be kept that way. They have to pay for their past excesses in harming the entire planet – it is no handout – and developing countries must be given some (not even an equal – chance.

Norway, which has become the major backer of President Jagdeo’s proposal has already contributed US$1billion dollars to the Brazilian Fund. Germany has also signalled that it will step up to bat. Brazil has indicated, however, that it may be prepared to compromise somewhat to ensure that progress is made on compensation for the rainforest countries. One hitch has surfaced that has confirmed the fears of some the “anti-cap and trade” camp is a recent fraud in one established privately in New Guinea that has been the pioneer in the effort to fund standing forests. The fear is that unless the system is monitored very strenuously, the intended beneficiaries of the scheme – generally the forest dwellers may not see much of the money.

The Brazilian scheme deals with this objection by the insisting that sovereign countries must be given authority to develop its country based on its own criteria.
Their stance highlights our own concern that Guyana ought not to be hogtied in its efforts to develop Guyana as a whole by the regulations that will come down with the “market” mechanisms of compensation. We have had too much experience with the “conditionalities” of the World Bank and the IMF over the lost quarter of century.

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