Anyin Choo：Guyana s low carbon development path and partnerships for a better planet

Guyana is a very small country on the northern cost of the South American continent with a very small population of about 750,000 people. Guyana is covered by over 75% of virgin rain forest. In 2020 Guyana’s  economy grew by 43%  from 2019, 20.4% in 2021, with a projected growth of 58.7%  by the International Monetary Fund (IMF) in 2022. This has been largely attributed to the recent discovery of large deposits of hydrocarbon offshore. Transformed into economic terms, this puts Guyana on the fast track to economic development. However, despite being a small vulnerable economy and nation, and faced with many developmental challenges, Guyana has chosen a path of low carbon development. In 2009; even before the discovery of oil, Guyana launched its Low Carbon Development Strategy (LCDS) and has remained committed to contributing to the fight against global climate change despite the country’s huge oil discoveries and heavy dependency on fossil fuel.

Anyin Choo, Guyana's Ambassador to the People's Republic of China

The people of Guyana fully understand the effects of global climate change because they have lived it and it continues to be a threat to their very existence. Guyana, like many countries in the Caribbean, it is not a matter of if but just a matter of when. The constant rise in sea level resulting in flooding, billions of dollars in losses in agricultural products, damages to property nationwide and displacement of people is a constant threat that the Guyanese people live with. Hence, it is important for Guyana to do its part in the battle against climate change despite contributing very insignificantly to global emissions because Guyanese fully understand the importance of leaving a planet we inherited from our forefathers, a better place for our future generations.

Against this backdrop, His Excellency Dr. Irfaan Ali, President of Guyana launched the national consultations for Guyana’s Low Carbon Development Strategy 2030 in October 2021, an updated Strategy which takes into account the dynamics of a changing world and recent developments in science, technology and the digital evolution.

Guyana’s LCDS 2030 will address the following three areas:

1) How Guyana will align its status as an oil and gas producer with being actively pursuing a low carbon development path;

2) How Guyana once again intends to resume its work to build a global model for forest climate services and other ecosystem services;

3) How Guyana will drive the future low carbon development of our country – through clean energy and a suite of low carbon development opportunities, including investment in protecting our people and country against climate change that is already a reality.

Guyana will pursue strong policies to ensure that its oil and gas sector operates at international standards. As a first step to reduce carbon emissions from the oil and gas sector, Guyana introduced one of the very few taxes on flaring in the world – where beyond the commissioning period, all flaring will be taxed at US$45 per tonne of carbon, along with the actual gas lost. For newly-licensed production, the tax on flaring will be accompanied by legal limits on the overall amount of flaring.

In parallel, with advancing a “no flaring”policy, new measures have been introduced to ensure that all waste management is the responsibility of the oil producer, in accordance with international standards, from start to finish. In addition, the Government of Guyana will also continue dialogue with oil producers to ensure that, alongside the above measures, exploration and production operations will continue to explore all opportunities for lower carbon technological innovation – including the use of renewable energy in oil production, Carbon Capture Utilisation and Storage (CCUS) and – when technologically viable – green hydrogen. 

At the same time, Guyana will invest in continued diversification of its economy by supporting non-oil sectors and areas of the country away from the coastline. This will involve support for physical infrastructure – including river, road and air transport networks, the electricity grids; the national digital connectivity network; and transition into a clean and renewable energy mix. The repairing of coastal and hinterland climate protection infrastructure, as well as targeted support for agricultural expansion in non-forested parts of the country is being implemented – to enable Guyana to become self-sufficient in key agricultural products as well as an exporter to regional markets and beyond. These investments will put Guyana on a long-term trajectory to sustain one of the highest growth rates in the world, create wealth for all our people and contribute to global sustainability.

If oil and gas is a bedrock of today’s global economy, the world’s ecosystems need to be the bedrock of the future economy. In our lifetime, the world needs to see the proper recognition of the value created by the world’s forests, biodiversity, and oceans. This is the only long-term way to preserve these vital ecosystems for decades and centuries to come. Guyana was one of the first countries in the world to recognise this. In 2009, when Guyana set out the original LCDS, it made an offer that no other country had made – to create a global model for jurisdiction-scale action to show how the world’s forests could be maintained and Guyana has since worked with partners around the world to gain a far greater understanding of the enormous contributions that our ecosystems make to the world’s health and economy.

As a result, Guyana has maintained the second highest percentage of forest cover on earth – with more than 99.5% of our forest remaining – an area almost the size of England and Scotland combined. Deforestation rates are among the lowest in the world. Guyana alone stores about 19.5 billion tonnes of carbon dioxide equivalent in its forests and has extremely high levels of biological diversity, 4% of known animal species and 2.4% of known plant species.

All these ecosystem services and others provide enormous value to the global economy –Guyana’s forests alone are estimated to provide global value from US$40B to US$54B annually. Yet – unlike oil and gas – the world does not yet recognise this value in monetary terms. This is the main reason that forests across the world are cleared for agriculture, mining, infrastructure, and other uses. In short, the world’s tropical forests are worth more dead than alive and forest areas that are the size of Greece disappear every year, causing about 16% of global greenhouse gas emissions. 

A comparison of the market for oil and gas with the market for ecosystem services will paint a clear picture of what the international financial system values more in a time when the global community is facing a climate crisis. This situation needs to change over the next decade if the worst extremes of climate change are to be averted, and if the world’s forests and other ecosystems are to be maintained to regulate rainfall, prevent diseases and provide the basis for much of the world’s future medicines.

Towards creating this new global ecosystem economy, in 2009, Guyana sought international partners who shared our vision. As a result, Guyana and Norway worked together to create a model for economic incentives for making forests worth more alive than dead. For the period 2009 to 2015, Guyana earned US$212 million in payments to be invested in the LCDS. Jobs were created, Indigenous villages were titled, hinterland and coastal businesses were supported, our sea defense and drainage systems were improved, solar energy to a number of remote communities was provided, among other initiatives. This is illustrative of what is possible when partnerships are united in the battle against climate change. Nations can come together to safeguard our home, Planet Earth.

On December 05, 2022, an international oil company also entered into a deal with Guyana to buy $750 million worth of REDD+ carbon credits in the next decade to support efforts in protecting its Amazonian rainforests. The multi-year agreement with Guyana that runs from 2022 to 2032 is under the UN Reducing Emissions from Deforestation and Forest Degradation program (REDD+) and involves the purchase of 37.5 million REDD+ jurisdictional carbon credits (current and future issuances). This is the second major partnership that Guyana has entered into, making its own contributions to the fight against climate change. In 2009, Norway had agreed to provide $250 million to help ensure Guyana’s 18 million hectares of forest remains intact. The deal represents a huge step forward in “showing the world that developing countries can lead the way to global solutions”.

The Government of Guyana will pursue efforts to attract more partners in the carbon credits market as Guyana works to reduce harvests of forest resources. Avoiding deforestation is critical to the Paris Agreement’s goal to limit the global temperature rise to well below 2°C. It is also one of the major commitments at the COP26 summit where 130+ countries, including Guyana, pledged to end deforestation by 2030.

The Covid 19 Pandemic has thought us that despite being separated by many borders, languages and culture; as part of a global community, we are interconnected in so many ways. We all co-exist in a common space and breath the same air. Our carbon emissions affect everyone but small low lying countries like Guyana are more vulnerable to the effects of climate change, that is why ensuring that we all do our part, is important for Guyana.

Despite the real challenges, Guyana is prepared and willing to work with partners, who are also committed to doing its part as a member of the global community in the fight against global warming. Guyana wishes to provide an opportunity for stakeholders to think outside of the box, to explore new innovative ways of partnering with small developing nations to create a win-win situation for everyone. We all have a very important role to play; let us join hands and create a better planet for everyone. Green innovative technology, financing and partnerships is the key to a safe and better planet for us all. Even though we are small and vulnerable….we can also be a part of the global solution.

At a time when the global community is faced with a climate crisis and questions about where the $100B worth of  financing promised to mitigate the effects of climate change is coming from; and as we continue to dodge from our responsibilities as major emitters , past and present; and continue to engage in this simple yet difficult dialogue on climate change; Guyana decided to do its part as part of a global solution in seeking partnerships with global players which have aligned interest in the fight against climate change. The reality is that we cannot wait any longer, the survival of our people and the future of our planet is at stake. Let us join hands to explore new opportunities for partnerships and international cooperation.