Dear Editor,
The United States, Australia, Britain, France, Japan, and Norway have pledged US$3.5 billion towards a programme to run from 2010 to 2012 aimed at reducing deforestation in order to help prevent climate change. It is time to examine this deal, which is likely to be the first and only major deal out of the Copenhagen Climate Conference, against the Norway agreement. The fact that this deal was consummated in Copenhagen adds fuel to the fire of those who openly questioned whether the Government of Guyana acted too hastily and prematurely in brokering the Norway agreement before Copenhagen, and asked whether the government should have waited to seek a better deal at or after Copenhagen. We are effectively sealed with the Norway agreement which could provide US$250 million up to 2015, but was the Copenhagen deal better for those forested nations that waited?
There are currently about 625 million hectares of tropical rainforest left in the world. These forests happen to be located in some of the poorest regions of the earth visited by excessive deforestation, so clearly the overwhelming bulk of the funds will be channelled to these nations. Guyana has 16.2 million hectares out of that total tropical rainforest cover. Using the current Copenhagen deal as a guide, the cost per hectare of tropical rainforest is US$5.60. This is the rate developed nations are presently willing to pay up to 2012 for poor forested nations to preserve tropical rainforests based on the Copenhagen deal. Applied to our current 16.2 million hectares of forests, this deal would have been worth US$90.72 million per year for Guyana.
Even if we apply a negative contingency of 25% to account for the fact that these funds may be spent on other forests and conservation areas, the cost per hectare of the world’s rainforest is reduced to US$4.20. Applied to Guyana’s rainforest, it is equivalent to a yearly sum of US$68.04 million per year. A review of the numbers shows that we are presently behind Copenhagen with this Norway agrement. In a best case scenario of Guyana getting US$50 million per year under the Norway agreement, Norway still saves itself US$18 million per year while Guyana loses US$18 million per year.
The fact that the deforestation deal was the first to be completed at Copenhagen suggests that the major players had some prior valuation of this initiative in mind, which generally revealed itself in negotiations. Those forested nations that held out until Copenhagen will get a better deal as a result of this pledge. They waited and used strength in numbers to access fair value for their forests, something that Guyana failed to do when one compares the Norway agreement to Copenhagen. This pledge is likely to be changed again in 2013 when rich nations could pledge significantly more than the current US$3.5 billion on the table. Guyana will still be locked in its deal with Norway at that time and incapable of benefiting from any increases.
The country cannot even compensate for the losses by increasing industrial and commerical use of its rainforests. Forested nations that waited on Copenhagen can now openly trade and negotiate for those funds and for additional benefits attached to those funds. Guyana is limited in its ability to engage such approaches.
Yours faithfully,
Michael Maxwell
