Govt. mulls Environmental taxes as part of development strategy

Aug 06, 2018 News

---

 

By Kiana Wilburg

As average incomes in Guyana rise, the supply of Official Development Aid (ODA) will fall and borrowing terms will tighten. As such, there will be a need for government to examine new ways to get its needed revenue.
In this regard, the Government’s Green State Development Strategy (GSDS) offers ideas on sources of public income and suggests as well, the most appropriate ways to allocate resources to secure its implementation. The Strategy notes that one area of exploration is the potential to employ environmental taxes.
The report states that environmental taxes directly address environmental market failures by “pricing in” environmental costs in economic decision-making. The document states that it provides incentives to reduce environmental harms, and make green technologies more competitive.
It goes on to state that they can also provide a source of revenue which can be used to finance green programmes.
“Guyana’s environmental tax on imports of beverages in nonreturnable containers is one example. Payments for environmental services (PES or payments for ecosystem services) are a related concept. PES are payments to landowners who have agreed to take certain actions to manage their land to provide an ecological service. In PES schemes, people managing and using natural resources, typically forest owners or farmers, are paid to manage their resources sustainably.”
The GSDS says that this could protect watersheds, conserve biodiversity or capture carbon dioxide (carbon sequestration) through, for example, replanting trees, keeping living trees standing or by using different agricultural techniques. For this to be a viable source of finance for the GSDS, Government has said that payments must be made by the beneficiaries of the environmental services such as water users and hydropower companies, as opposed to the local or national government. The government believes that the most appropriate system for the collection and redistribution of payments will depend on the specific context.
THE FRAMEWORK
The Green State Development Strategy is expected to guide Guyana’s economic and socio-cultural development over the next 15 years. It will lay the new coalition Government’s principle foundations for inclusive green economic and social growth, provide a roadmap for achieving sustainable development goals and related targets, and outline a long term vision for a prosperous and equitable future.
The objective of the strategy is to reorient and diversify Guyana’s economy, reducing reliance on traditional sectors and opening up new sustainable income and investment opportunities in higher value adding and higher growth sectors.
Importantly, the present document is the proposed “Framework” for Guyana´s Green State Development Strategy providing guidance on the prioritized areas to be developed in the strategy. It does not give in-depth detail specificity for the GSDS, but rather lays out the elements to be examined and consulted upon during the course of the GSDS’ development (April to December 2017).
The Framework shares the same spirit of the 2030 Agenda for Sustainable Development, serving as a tripod platform for economic, social and environmental safeguards. These safeguards, during the development of the GSDS, are to ensure a sustainable and fair transition to inclusive green growth and a better quality of life for all Guyanese.
Drawing from an analysis of the local context and existing policies and targets, the Framework proposes specific strategic areas within each theme on which the GSDS should focus. In particular, it should acknowledge the risks and benefits in each of these areas for national prosperity, identification of achievable targets and concrete actions as well as a clear roadmap to achieving required change.
This Framework suggests as well the identification of financial mechanisms to support the implementation of the strategy. A financial plan will be developed by matching GSDS focus areas with the wide pool of public and private, national and international funding available, considering too Guyana’s public investment and expenditure programmes.
In particular, there are three primary sources of finance that could be considered – Official Development Aid (ODA), both domestic and international private finance, and fiscal revenues. Evidence-based policy making forms a critical basis for ensuring that the GSDS is both efficient and effective in meeting its objectives, and in this regard all existing sector work and lessons learnt will be absorbed in the Strategy.
The strategy will include a robust monitoring and evaluation (M&E) framework specifically tailored to the strategic areas and challenges identified which explains the theory of change for how the GSDS proposal will lead to desired outcomes in each of the strategic areas. Precise and clear indicators will be proposed which are easily measurable and reflect genuine progress relative to a verified business as usual scenario.
The Monitoring and Evaluation framework will anticipate difficulties in data availability and collection and present relevant mitigating actions. Finally, a clear process to reflect on the M&E results and incorporate lessons throughout the GSDS’s implementation will be laid out.
Further to this, the GSDS will identify and make policy recommendations on a number of legal and institutional actions that might be carried out to allow the transition to a Green State. Moreover, it is foreseen that a consultation document in the form of a Green Paper will be issued by the Government containing proposals for future government policy.
The conclusions, resulting there from, will be contained in a White Paper, the last stage before the proposals it contains are brought before the Cabinet, and potentially Parliament as a Bill.

---

---