Guyana's modest proposal

SUSTAINABLE DEVELOPMENT: CARBON BARGAIN

Guyana's modest proposal
The Globe and Mail
A South American president surprised his people when he offered to let
foreign conservationists manage rain forests in return for aid. A new
way to reconcile development and the environment, or a new
eco-colonialism? Christopher Frey reports

CHRISTOPHER FREY

January 19, 2008

FAIRVIEW, GUYANA -- It's the first time anyone has asked Bradford
Allicock his opinion about the bold new plan for the rain forest he
calls home. Late last year, Guyana's President, Bharrat Jagdeo, told
Britain that he would turn over environmental management of the forests
in return for aid and investment. A month later, the first journalists
and TV cameras arrive in Fairview, the Amerindian village where Mr.
Allicock is the toshau (village captain).

Stepping away from the Pentecostal service occurring in the shade
beneath his stilt-raised house, he says he first heard about the offer
in the media. Locally, there has been talk about carbon offsets and
carbon sinks. Even though his people weren't consulted, he welcomes Mr.
Jagdeo's proposal, saying it is better than the alternative.

"I see the footage of what the big timber companies are doing other
places in Guyana. And I've spoken with other communities who've shared
their bad experiences. Our forest is still here. It's still standing.
So let's ensure the future generations will benefit."

Mr. Jagdeo's offer surprised everyone. Describing the rain forest as a
"global asset in the fight against climate change," he appealed to the
British government and non-governmental organizations to assist Guyana
in safeguarding it through bilateral investments in conservation and
sustainable development.

Poor nations need to be compensated for the economic costs of avoided
deforestation (the political term for such forest protection), he
argued. They need technology transfers to help build a green economy.
With his country's standing rain forest as eco-collateral, he wants to
be paid not to follow the same path that made the developed world
wealthy.

It could become a test case for how the world deals with the conflict
between economic growth and environmental responsibility in developing
countries. Critics worry that Guyana's model might undermine the
sovereignty of struggling countries and engender a new form of
colonialism in which poor nations hand over crucial decisions about
their future in return for a cheque.

Meanwhile, rich governments will be looking to the emerging
carbon-credit markets to help finance such schemes, even though it has
not yet been proved to reduce greenhouse emissions.

English-speaking Guyana still possesses 50 million acres of virgin rain
forest, part of the Guiana Shield that reaches into Venezuela,
Suriname, French Guiana and Brazil. It is among the four largest
tropical rain forests on Earth still relatively intact.

Mr. Jagdeo's proposition came sandwiched between Sir Nicholas Stern's
landmark report on climate change in early November - which recommended
avoided deforestation as an inexpensive step toward climate stability -
and the United Nations Climate Change Conference in Bali, convened to
begin negotiations on a successor agreement to the Kyoto Protocol.

Limits to deforestation were not included in Kyoto, although cutting of
tropical forests accounts for 20 per cent of greenhouse-gas increases
(second only to the energy industry). The final communiqué at Bali
talked of exploring "policy measures and positive incentives" to
encourage avoided deforestation.

How is Britain reacting to Mr. Jagdeo's proposal? According to Fraser
Wheeler, the British High Commissioner in Guyana, "We're looking at it
and we're very interested."

In the country whose rain forests are at issue, however, the proposal
has been met with mixed confusion, scorn and cautious support. Guyana's
politics are notoriously polarized - allegiances are often tied to
race, and a legacy of corruption ensures a strong dose of public
skepticism. The government has yet to fully explain its plan through a
discussion paper or convene a meeting of stakeholders.

Local loggers and the large Malaysian and Chinese-owned forestry
companies want to know what it means for their existing concessions.
And while much of Guyana's standing forest may be uncut, it is part of
a vast, largely unpoliced frontier.

The opposition is especially rankled at the president's decision to
appeal exclusively to the U.K., Guyana's former colonial master, rather
than pursue a multilateral approach. Even advocates for conservation
have expressed disappointment that there was no public consultation
first.

Robert Corbin, the leader of the opposition People's National Congress
Reform, has likened the direct pitch to Britain as a return to
colonialism. He calls the deal "a new form of serfdom in the 21st
century."

But Dane Gobin, acting director of the organization that manages the
Iwokrama Forest Reserve, presently Guyana's most prominent protected
area, says there were pragmatic reasons to approach Britain as a
partner - the U.K. has been one of the leading movers of debt relief
for developing countries, its consumers are perceived as pioneers of
fair-trade shopping and London has already become the world centre for
the carbon-trading market.

Mr. Gobin even sees the lack of consultation in a positive light. "I
think it might have been strategic in terms of dropping a bombshell, in
that it raises immediate awareness," he says. "The media is coming
here, so Guyana is getting huge mileage from it."

The red road

This talk of avoided deforestation, and achieving value from it,
arrives at a critical juncture in Guyana's development. With 90 per
cent of its 750,000 people living along the Atlantic coastline, there
is little population pressure on the rain forest. But the globalizing
world economy is another matter. Transnational logging, mining, gas and
oil companies are increasingly turning their attention to the resources
locked away in the country's densely forested interior.

Meanwhile, a joint effort with Brazil is under way to upgrade and pave
the narrow, rugged belt of road that traverses the country from the
capital, Georgetown, to the south. The highway would give the
northeastern Brazilian province of Roraima, on the cusp of a boom in
timber, tourism and mining, convenient access to Guyana's deep-water
coastal port for shipping. But it would also dramatically transform the
Guyanese frontier, reducing travel times, improving safety and opening
its hinterland for future development, sustainable or otherwise.

For the time being, though, the clay-packed road still dyes everything
that travels over it an ochre red. In the Iwokrama Forest Reserve, Ron
Allicock stands in the back of a pickup truck sloshing along that
artery after a rainstorm, its spray staining clothing and skin.

Mr. Allicock is a birding guide from the Iwokrama field station and
Bradford Allicock's nephew. As the truck speeds beneath the
outstretched canopy of green, he identifies the many birds circling or
darting overhead - red-billed toucans, jabiru storks, king vultures.
Jaguars occasionally survey the road through a crack in the forest
wall, like sentries of its stunning biological diversity.

The forest and its waterways harbour arapaima, the world's largest
freshwater fish, and endangered species such as the giant river otter,
black caimans, giant river turtles and the rare harpy eagle - the
strongest and most efficient avian predator.

Mr. Jagdeo has said he would like Iwokrama to serve as the model for
the rest of Guyana's standing rain forest.

Mr. Allicock is a product of Iwokrama's commitment to Amerindian
development and stewardship. The studious-looking 29-year-old, a native
of Surama Village, is part of a process that begins with children's
nature clubs and continues with opportunities in ranger training,
guiding and forest management.

"When the researchers first came," he says, "they needed people to help
them find the birds, the mammals, the fish, whatever they were looking
for. I never realized that 10 years later that's what I would be doing
with my life. And that I could make money from it."

The million-acre reserve has grown into an internationally recognized
research station and slowly nurtured an ecotourism business that
attracts about 1,000 visitors a year, many of them birders. It is home
to 16 Amerindian communities that are directly involved in the
reserve's management and economic initiatives.

While Iwokrama received substantial foreign funding in the decade after
its inception in 1989, it has struggled in recent years as donor
agencies have prioritized funds away from the environment and toward
poverty reduction and HIV/AIDS initiatives. When it recently started a
sustainable logging operation within the reserve, it was greeted with
shock. But Mr. Gobin insists Iwokrama was never intended to be purely
an act of conservation - it was an experiment in sustainable
development.

It appears to be an intriguing model for other countries. Partly in
thanks to the reserve, local Amerindian communities collaborate on
business initiatives. But sustainable development is costly. It
requires investment in training, capacity building and proper
extraction techniques.

Iwokrama's small logging operation is trying to secure Forest
Stewardship Council certification, which requires social and
environmental measures that will put its lumber above the world market
price. If it succeeds, it will be the only FSC-compliant timber
operation in Guyana. But there starts the challenge - finding buyers
willing to pay extra for knowing where the wood came from.

A fair trade?

But there is another worry, one that goes to the heart of the
mechanisms being contemplated in the battle against climate change.

Last April, the arrival of Swedish-British businessman Johan Eliasch in
Georgetown triggered speculation about what was in store for Guyana's
rain forest. The owner of the sporting goods manufacturer Head and an
adviser to the British Conservative Party on environmental issues, Mr.
Eliasch turned heads in 2006 when he purchased 400,000 acres of Amazon
rain forest in Brazil from a logging company.

The transaction, he insisted, was purely in the interests of
conservation. But critics have pointed to his support for
carbon-trading markets and suggested he could stand to gain
financially. According to Mr. Wheeler, the British High Commissioner,
talks between his office and the Guyanese government on avoided
deforestation began shortly after Mr. Eliasch's visit, including
discussion of carbon markets.

There are questions, though, about the efficacy of using a market-based
mechanism to reduce emissions. The system enables companies to gain
credits when they reduce emissions or invest in green-technology
projects. They can also buy credits from others. The credits can be
used to gain leeway to exceed legal emissions limits in other
operations. The system has high-profile supporters, including the World
Bank and Conservation International.

The final Bali communiqué emphasized using the carbon market as a
source of financing for avoided deforestation and alternative
development. The fact that it does not require large investments by
governments certainly makes it politically expedient.

"We have a problem that has been called the greatest market failure man
has ever known, namely climate change, and the major solution being put
forward to address this solution is a market solution," says Daphne
Wysham of the Institute for Policy Studies in Washington. "The forest
becomes a commodity you can buy and sell. It's a market in hot air, an
invisible gas that no one can completely ensure is doing what it's
supposed to be doing."

While talk of putting forests on the carbon market is relatively new,
Ms. Wysham has been tracking how the scheme is working in other areas.
She says the markets are typically riddled with "perverse incentives"
that encourage dirty industries to play the system.

Coal-fired plants in India, for example, earn credits for producing
cinderblocks from its waste fly ash, because they are reducing
emissions that would otherwise be created by firing clay bricks in a
kiln. Credits are also earned from diverting the highly toxic fly ash
from dumps. In this case, the market only encourages the power plants
to use more coal to make more cinderblock.

"People think of regulation and command and control as this bogeyman,"
Ms. Wysham says. "But governments can be more efficient and more
involved and more targeted than a free market in something like
carbon."

Mr. Corbin, the Guyanese opposition leader, says he has been approached
in the past by British businessmen about his country's willingness to
put its rain forest on the carbon market. He doubts such schemes will
help Guyana.

"I think that we would be more concerned about the bottom line of such
programs," he says. "Whether the people of Guyana and the country will
derive some benefit from the lack of utilization of our forest
resources. ... Will the people of Guyana still suffer because the whole
process has been subjected to the old market forces of trade? I'm very
skeptical when it becomes just a matter of trading. The question of
Guyana's environment, global warming and rising sea levels become
secondary to people making money."

Toronto writer Christopher Frey's book Broken Atlas: The Secret Life of
Globalization is due in 2009.