Download - Guyana`s Low Carbon Development Strategy

Understanding Climate Change
Part 9
Reducing Emissions from Deforestation and Forest Degradation in Developing Countries
(REDD+) – Guyana’s situation
In previous articles, it was noted that tropical deforestation is a leading cause of climate change,
responsible for approximately 17 percent of global greenhouse gas (GHG) emissions, and that
efforts towards reducing emissions from deforestation and forest degradation (REDD), as well as
enhancement of carbon stocks, conservation, and sustainable management of forests in developing
countries (REDD+) are crucial to combating climate change.
Last week we emphasised the importance of financing for implementing a global framework for
REDD+ and discussed some of the options available for financing.
This week we will examine REDD+ from the perspective of Guyana, and will introduce Guyana’s
avoided deforestation strategy and Low Carbon Development Strategy (LCDS).
Background to Guyana’s forests
Guyana’s pristine forests, which cover about 15 million hectares, or 80 percent of the country, are
one of its most valuable natural assets. Guyana has had relatively low historical rates of
deforestation of 0.1 percent to 0.3 percent. (UN FAO FRA 2005, Colchester 1999)
The forests contain a wealth of biodiversity and provide valuable ecosystem services, both at a local
level - such as flood control, the provision of non-timber products, maintenance of water quality
and prevention of soil erosion - and at a global level - such as carbon sequestration, regulation of
climate systems, and biodiversity conservation.
Guyana has placed the protection and sustainable management of its forest as a major national
priority.
The value of Guyana’s forests
Last week we discussed the many types of value that forests have, and the concept of market failure
which often leads to the undervaluation of forests, since the true value of the ecosystem services
they provide and biodiversity they hold are not currently captured in market transactions.
In 2008, the Government of Guyana facilitated as study which aimed to estimate the economic value
of Guyana’s forests to the nation (EVN) if it were to follow a rational development path, deploying
its forests to generate income and employment. It also assessed the economic value of Guyana’s
forests to the world, taking into account the role that forests play in carbon sequestration and
protecting biodiversity, using the value of avoided carbon emissions from deforestation as a proxy
for the economic value to the world (EVW) that forests provide.
1 The Economic Value of Guyana’s Forest to the Nation (EVN)
The great majority of Guyana’s forest is suitable for timber extraction and post-harvest agriculture,
and significant mineral deposits exist below its surface. If Guyana chose to pursue this form of
development, the likely estimate of the value is US$580 million annually. This forest value is known
as Economic Value to the Nation (EVN).
However, if deforestation is carried out it would have significant negative consequences for the
world. The world would lose important services provided by forests, such as carbon storage, climate
regulation, and biodiversity conservation.
The Value of Guyana’s Forest to the World (EVW)
Conservative valuations of the EVW provided by Guyana’s forests suggest that, left standing, they
can contribute US$40 billion to the global economy each year.
At this stage there is no market for these ecosystem services, and as a consequence, individuals and
companies in rainforest countries such as Guyana, face powerful incentives to deforest, while
national and local governments face political pressure to use the forest for economic and
employment benefits.
Guyana’s tropical forests can be viewed as a global public good, as many of the ecosystem services
they provide, including carbon storage which is important in combating climate change, accrue to
the world, and not just to Guyana. However, the costs of preserving this forest, including the
foregone development opportunities from logging and mining, are incurred by Guyana alone.
Deploying Guyana’s forests to combat climate change and benefit the nation
As a relatively poor country facing many developmental challenges, Guyana must choose to use its
forests in an economically rational way that will benefit its people and enable development. In the
absence of markets for ecosystem services, a rational development path would necessitate some
amount of deforestation for timber production and conversion of forest land to other uses.
There is thus an important market failure that needs to be rectified in order for the true value of
Guyana’s forests to be realised and incorporated into long-term land-use management and decision
making.
As climate change becomes widely recognised as a serious threat to development, socio-economic
stability and ecosystems, there is a growing global awareness of the importance of forests in
sequestering and storing carbon, and the role of deforestation in contributing to greenhouse gas
emissions. The importance of efforts to reduce emissions from deforestation and forest degradation
(REDD) and to avoid further deforestation (REDD+) is now globally recognised and enshrined in
last December’s Copenhagen Accord.
REDD+ will help to create a market for the carbon storage services provided by forests that did not
exist in the past. It will generate a willingness to pay by developed countries, as conserving forests is
a low-cost means of reducing GHG emissions, and it will generate a willingness to participate by
developing forest countries as it provides significant funding for development. REDD+ therefore
2 provides an opportunity for developing forest countries to attract payments for carbon storage,
which can be invested in sustainable development.
As an international REDD+ mechanism becomes established, Guyana will stand to benefit from
payments for forest carbon, and the development opportunities that those funds will enable.
Guyana’s efforts to support REDD+
Even while the details of a global framework to address REDD+ are being worked out, Guyana has
moved ahead to develop a workable approach to addressing REDD+. This is embodied in an
avoided deforestation strategy, which is a major component of Guyana’s Low Carbon Development
Strategy (LCDS) which was launched in June 2009.
The LCDS is an innovative approach to combating climate change while simultaneously promoting
economic growth and development. It sets out how Guyana can avoid significant emissions of
GHG from deforestation that would occur following an economically rational development path, by
attracting payments for forest carbon through a REDD+ mechanism. In its model of avoided
deforestation, Guyana has proposed that, given appropriate incentives and safeguards, almost all of
Guyana’s forests could be placed under long-term protection. The appropriate incentives would be
payments for carbon services that equal or exceed, in the long term, the EVN of the forests.
The LCDS provides a framework for how interim payments and future REDD+ payments could be
used to realign the country’s economy along a low carbon development trajectory and support
efforts to adapt to the negative impacts of climate change. This will catalyse Guyana’s efforts to
diversify its economy and provide new economic opportunities, employment and more efficient use
of resources, while maintaining the valuable forest ecosystem.
To support capacity building for REDD+ as part of the wider implementation of the LCDS,
Guyana has embarked on a number key initiatives and activities. One key approach has been
through many partnerships with other countries, groups and organisations.
On November 9, 2009 a Memorandum of Understanding (MoU) between the Governments of
Norway and Guyana was signed regarding cooperation on issues related to the fight against climate
change, in particular those concerning REDD+.
In the MoU it was agreed that Norway would provide Guyana with performance based payments
for avoided deforestation which will amount to contributions of up to US$250 million by 2015. At a
time when the role of REDD+ in the global effort to combat climate change is being negotiated and
defined, Guyana’s agreement with Norway is a leading example to the world of how an interim
REDD+ mechanism can operate, and will help to build global momentum on REDD+.
Guyana’s REDD thrust is also supported through a World Bank Forest Carbon Partnership
Facility (FCPF) project to support capacity building and readiness preparation for tapping into
REDD climate funds and carbon market financing ultimately. The Guyana Forestry Commission is
implementing a REDD Plus Governance plan and developing a monitoring, reporting and
verification system for forest carbon.
3 Guyana has also made considerable progress internationally in negotiating its position on REDD+
through the UN and other major processes. Guyana, along with likeminded countries, has been
advocating for broadening the vision of REDD+ in the framework of a post-Kyoto mechanism, to
include incentives for those countries with high forest cover and low deforestation rates (HFLD)
countries.
Guyana joined 34 other countries in the Informal Working Group on Interim Financing for
REDD+ (IWG-IFR), convened by His Royal Highness the Prince of Wales in April 2009. The
group made proposals on how to achieve a 25 percent reduction in global deforestation rates by
2015 at a cost of between €15 and €25 billion. Guyana also works closely with groups such as the
Coalition for Rainforest Nations (CFRN) to advocate for REDD+ and to build capacity.
Locally, to support the effective development of REDD+ and the wider LCDS, and to enable wide
stakeholder involvement in the process, a number of key initiatives have been undertaken.
Since the launch of the draft LCDS, the document was subject of a national multi-stakeholder
consultation and of extensive outreach sessions. Many educational and awareness sessions with wide
stakeholder groups were held to raise awareness on the LCDS and to enable stakeholder
involvement in the process.
The process and the review of the draft were overseen by a nationally representative steering
committee and the process was monitored by a respected international non-governmental
organization.
An Office of Climate Change and Project Management Office have also been set-up to provide
institutional support to the effective implementation of the LCDS and other related activities.
Moving forward with REDD+
The payments that will accrue to Guyana through REDD+ will not approach the true EVW that
Guyana’s forests provide, since REDD+ deals with carbon storage and does not capture the value
of other ecosystem services. REDD+ does not, therefore, fully rectify the market failure that exists
in the discrepancy between the true value of the forests and the highest value that Guyana can
realize from them. Though at present, markets for other ecosystem services do not exist, it is
expected that in the longer term, as carbon markets develop and Guyana becomes ready to penetrate
these markets, financing from REDD+ will significantly increase.
As markets for other ecosystem services are developed with advances in science and economics,
Guyana stands to benefit from payments for ecosystem services in the range between the EVN of
US$580 million and the EVW of US$ 40 billion.
In the next article we will continue to examine REDD+ from Guyana perspective and also touch on
some of the key issues related to the development of a REDD+ mechanism.
*Information used in this feature was extracted from the following reports and sources: Guyana’s
LCDS- Draft (2009), Government of Guyana. 2008. Creating Incentives to Avoid Deforestation.
4 Prepared by the Office of Climate Change, May, 2010
For additional information, please contact:
Office of Climate Change, Office of the President
Shiv Chanderpaul Drive, Georgetown
Tel. 223-5205
Email: [email protected] , Web Site: www.lcds.gov.gy
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