President Bharrat Jagdeo says Brazil is not opposed to avoided deforestation as it was previously, following recent discussions, but he observed that it continues to advocate for a fund-based approach to forest carbon while Guyana supports a market-based initiative enshrined in the Reduced Emissions through Deforestation and Degradation (REDD).
There appears to be some changes in Brazil’s position, Jagdeo said on Friday last as he addressed a Private Sector Commission (PSC) dinner at the Pegasus Hotel. He pointed out that Brazil had been lukewarm on avoided deforestation, but noted that “they are not so opposed to it anymore”.
“Brazil has been sensitive to this whole issue about sovereignty over its forests, we are too but we are prepared to offer intrusive inspection without trading sovereignty”, the President stated. Jagdeo noted that his advocacy on forest carbon has included the need for all types of forest to be part of the Copenhagen Agreement later this year, adding that he supports a menu approach so that countries can feel comfortable picking a policy from the menu that works for them.
Guyana is among a number of countries pressing for the REDD market initiative to underpin national plans such as the Low Carbon Development Strategy but the stance of Brazil with its huge forested Amazon will be critical to a successful outcome in Copenhagen. Thus far, Brazil has not favoured the selling of credits through REDD but is keen on direct financing mechanisms such as the Amazon Fund it created last year and which has already attracted a US$1B donation from Norway.
A Reuters report in July quoted Jose Miguez, the head of Brazil’s Interministerial Commission on Global Climate Change as saying that Brazil opposes selling credits through REDD, in which developed countries buy rights to carbon stored in trees as they grow to offset their own emissions.
Selling emissions credits from such projects would increase total atmospheric carbon, Miguez told Reuters, because ensuring forests remain standing would only keep carbon out of the atmosphere until the trees die and release it again.
“Our position is that we’re opposed to carbon markets for preventing deforestation,” he told Reuters. “People confuse this by saying we want to continue deforestation, which is false.”
He said REDD projects would also assign higher land values to states where the Amazon is being used for cattle farming or soy cultivation, he said, effectively rewarding Brazilian state governments that have done the least to protect forests.
REDD projects should be done without tradable carbon emissions through direct financing mechanisms, he told Reuters, such as the Amazon fund Brazil created last year that has already received a $1 billion donation from Norway.
Brazil supports carbon projects for reforestation of degraded Amazon areas, a methodology approved by the U.N.’s carbon offset programmes, but those projects are stalled because Europe has not allowed for trade of such credits.
Jagdeo discussed the link between the country’s Low Carbon Development Strategy (LCDS) and development here at the PSC dinner, saying that the proposal will generate a new wave of infrastructure which will significantly change the local economy.
He likened forest carbon to other key export products such as sugar, rice and bauxite, noting that a market already exists for the sale of the product. According to him, a tight fiscal situation in the country triggers questions about development but more specifically, questions as to how the LCDS could accelerate the country’s growth.
“It is not solely about the environment, it is also about development and the sale of a product that the country has…we have identified several low carbon investment opportunities in the strategy which are going to be pursued”, Jagdeo stated.
He reasoned that climate change has created a new global opportunity to raise a significant amount of resources for funding development projects here, and that it offers “opportunities that would allow you in this room to create wealth, to earn more”.
Guyana’s model is simple, Jagdeo said, and he explained that the strategy focuses on what Guyana can earn by deploying the forests to alternative use. He said too that the market last year for carbon services was US$126B and that it is growing.
Further he said that Guyana recognizes that the market would not develop immediately, adding that this explains why the strategy also supports a fund market type of approach where there are transitional payments until the markets kicks in.
He said too that if Guyana receives any money from the LCDS the funds would be pumped into critical areas such as sea defence. Jagdeo stated that the average cost per annum for flooding for the past ten years indicates a loss in the region of ten percent of Gross Domestic Product (GDP) in financial terms.
“We can save the equivalent of ten percent of GDP which is like your country growing by ten percent. You can save [this] by addressing adaptation needs of the country… it’s a good investment”, Jagdeo stated.
The President stressed that the private sector cannot plan ahead without introducing the variable of climate change and how it will affect business. He said that all businesses are vulnerable, particularly if they are along the coast.
And in response to a question on the issue of continued logging and mining in the country, Jagdeo said that in spite of both activities the forests here remain intact.
“We must be doing something right as a country, the whole world recognize that our forests remain intact, but if it were a big issue there would be poor forest cover here”, he added.