REDD in Guyana: Lessons for emerging economies

The release of a new report on Guyana’s REDD agreement with Norway has shown that its initial inclination to blame deforestation upon the forestry sector was fundamentally flawed.  Two years into the agreement, deforestation rates have tripled and the likelihood of ‘performance based payments’ to the Guyanese looks slim. There are valuable lessons in this for developing countries.

The Guyana-Norway REDD agreement was brokered in late 2008, when the hype surrounding REDD-based carbon credits was at its highest. Norway and Guyana signed the agreement in early 2009; it promised ‘performance-based payments’ for Guyana based on deforestation emissions.

In other words, if Guyana could prove that it was cutting levels of deforestation, it would receive payments from Norway.

The most recent report on the Guyana-Norway deal indicates precisely how much of the blame for forest loss in Guyana was misdirected at the forest industry.

According to the final report, released last month, 91 per cent of deforestation can be levelled at the mining industry – not the timber industry. Further, since the signing of the REDD agreement in 2009, rates of deforestation have tripled from 0.02 percent to 0.06 percent.

There are a number of problems now facing the Guyanese government and the project’s backers.

Now that mining, not forestry, has been revealed as the key driver of deforestation, any policies that impact the export of Guyanese timber will have little or no impact upon the overall levels of deforestation.

And the performance-based payments from Norway based on reduced levels of deforestation now appear unlikely to make their way to the Guyanese government.

The lessons to be learned from Guyana’s current REDD headache are myriad, particularly for any nations contemplating participation in a REDD scheme.

First is that the genuine drivers of deforestation need to be determined, without recourse to campaigns undertaken by non-government organisations or environmental activists. This is most pertinent to Indonesia, where NGO’s are currently pushing to have new palm oil and forest plantations included in a nation-wide moratorium.

Second is that making a political commitment to significantly reduce emissions is a high risk exercise, particularly when a full inventory of emissions has not been completed. Many leaders in the developed world have only now begun to appreciate that reducing national emissions levels effectively means restructuring an entire economy. In developing countries, deforestation emissions have been chosen as an ‘easy’ target for reductions.

None of this augurs well for Guyana. But for Norway, which has promised billions to nations such as Indonesia for REDD programs over the next decade, the gap between theory and reality on REDD is becoming increasingly apparent.

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