Carbon exchange benefits seen as limited
-Cassells suggests use of timber waste for power

By William Walker
Stabroek News
November 16, 1999

There may be some limited opportunities for Guyana to benefit financially from carbon exchange programmes whereby developed countries pay developing countries to preserve or increase their forests in an attempt to reduce carbon dioxide in the global atmosphere. But these would have to coincide with more important national initiatives to develop both the forestry sector and the fledgling tourism industry, according to David Cassells, Director General of the Iwokrama Centre for Rainforest Conservation and Development.

Under the Kyoto protocol to Climate Change of 1997, the industrialised or OECD nations agreed in principle to keep their carbon emissions at a 1990 level up to the year 2010. For some European countries this was deemed relatively easy. Cassells recalled that the United Kingdom had closed many coal mines in the 90's and their emissions were already decreasing and that Germany, after its unification, had closed many highly polluting factories in East Germany. In general European countries were more green conscious in their outlook and they viewed the Kyoto protocol positively. The United States on the other hand, the largest per capita and net polluter in the world, considered that any attempts to reduce carbon emissions would put a serious strain on its economy. It was also concerned that rapidly industrialising countries such as India, China and Brazil would gain a competitive economic advantage as their emissions were not part of the freeze. Cassells noted that cynics have suggested that the protocol was part of developed countries plans to control economic activity under the guise of environmental concern.

Clean development mechanism

A report by the Centre for International Forestry Research (CIFOR) based in Jakarta, observes that written into the protocol was the concept of a Clean Development Mechanism (CDM). This allows developed countries to keep pumping out carbon at increased rates as long as they have compensatory programmes that absorb those emissions. All plants absorb carbon dioxide and release oxygen into the atmosphere. Joint initiatives had been around on a small scale for some years before Kyoto, Cassells said.

In an interview with Stabroek News he cited the example of a Dutch power company which in building a new generator had calculated how many tons of carbon it would emit and put a surcharge on its customers' bills that would be used to plant enough trees in a developing country to absorb and thus neutralise the emission. He noted that most of these joint initiatives by these "investors" were public relations exercises as they benefited the companies to be seen as "green".

According to Cassells, the perception by environmentalists leading up to the Kyoto conference was that a CDM would be the "silver bullet" that would save the rainforests without impoverishing host countries. However the US refused to ratify the protocol thus reducing pressure on the OECD countries to make carbon deals. Compounded with this factor, he said, was the failure to create a mechanism that would measure carbon absorption. In fact, delegates recently met in Bonn, Germany to discuss this major technical obstacle; part of the problem is that the data is extremely variable depending on the types of forests, rates of decomposition, among other issues.


According to the CIFOR report, some of the "investors'" concerns about CDMs involve "additionality" and "leakage". Additionality, means that it is not enough just to preserve untouched forests but efforts must be made to plant new "carbon plantations" or either reduce the logging activity or the impact of logging through improved forestry practices. This factor directly affects Guyana, Cassells stated. Leakage is the practice whereby an area has been identified as a carbon area and farmers in the host country move to another area to clear land thus negating any benefits of the initiative.

Comparisons have been made between Costa Rica, who pioneered the carbon programme and possibilities of a similar programme in Guyana. However Cassells noted that Costa Rica is "fortunate" enough to have destroyed 80% of its rain forests in the 50's and 60's when, in part, a popular hamburger chain in America bought up land and turned it into pasture to grow beef. The carbon exchange programme in that country, he went on, preserves the remaining forest but more importantly requires the planting of new forests to absorb carbon. The planting will provide jobs and the initiative coincides with Costa Rica's plans to be a leader in eco tourism which currently brings in US$600 million a year. The nation has issued a Carbon Bond that is currently traded on the Chicago Futures Exchange, although there has been no activity. The only sale was to the Norwegian government who "purchased" one million tons of carbon at US$10 each.

Other initiatives

There have been other initiatives; a September 18, article in the Courier Mail, a Brisbane, Australia newspaper, highlights a Japanese power company purchasing the carbon credit rights of 10,000 hectares of plantations in New South Wales, Australia.

In the long term, reductions in carbon emissions are more likely to come from improved technology in power generation and the increased use of clean burning natural gas or alternative forms of energy, thus reducing the need for carbon exchanges, according to the report by CIFOR. And these technology implementations have the advantage of being permanent, whereas any forest programmes are only good as the life of the trees.

The great irony of Guyana's position, Cassells suggested, was that its forests were in near pristine condition. He predicted that it was likely in the next 20 years the landscape will change little and noted that a flight over Guyana's interior showed no substantial evidence of clear cutting and a thick canopy of trees. According to a report by Tropenbos, an international forestry monitoring organisation, most forestry activity here is low level due to high transportation costs and rainy seasons that shut down operations for many months of the year. It is generally highly selective, with only specific trees being sought although there is some evidence of green heart clusters being clear cut. Barama Company Limited is for example looking for only two types of trees in its concession. Compared to world standards, Cassells said, the Malaysian company was quite environmentally conscious. In general most companies in Guyana practise some form of reduced impact logging, the Tropenbos report said, which requires directional felling of trees to avoid damage to potential crop trees and prudent use of skids to remove the trees from the forest. There are few wide roads that would reduce acreage.

A study by Iwokrama concludes that the benefits of a low impact logging programme instigated by a carbon initiative would be minimal compared to what could be achieved in other more intensively forested countries. Secondly, there are few areas in Guyana where new carbon plantations could be established on a significant scale. A proposal to stop all logging as part of a carbon programme, the Brisbane Courier Mail reported, would have to take into account the reality that a tree is worth ten times as much in timber as the present value of the carbon it stores and the fact that a large number of workers would have to be displaced.

Power from timber waste

Other programmes that might be more economically beneficial, Cassells suggested, might include the use of timber waste products for power generation. Lumber production wastes roughly half of the original tree. At present bio-mass generation costs twice as much as fossil fuel but with a carbon exchange programme, sponsored perhaps by a major utility company in one of the industrialised nations, the cost could be mitigated. Similarly, Cassells proffered that the local utility company could also apply for assistance from companies to replace old generators with modern low emission units that would be a credit to the sponsor company and that these two programmes have the advantage of being easily quantified and monitored. Additionally, he said, with the global sugar market uncertain, Guyana could take its cue from Brazil which converts a lot of its sugar crop into clean burning ethanol to run in motor cars. Such a programme could be considered a form of carbon exchange.

National protected area

According to Cassells, whilst the CDM is still trying to find a point of reference and framework and until the OECD countries really buckle down to reducing emissions, the country should keep an eye on any new developments. He suggested that it might behove the country to look at preserving more of the forest as a national protected area. At present Iwokrama the only such area, represents only one to two percent of the total area of rainforest. The government does have plans to increase the area to ten to 15%. But this should be more as part of any plan to develop the eco-tourism industry and Cassells stresses that such areas should be economically viable through sustainable use of resources such as nibbi furniture production or low-level, selective logging.

Cassells noted that Guyana is unique in the world in that much of its forest is unbroken by clear cut lands; such a habitat is the perfect environment for roaming wildlife. Wardens in the Iwokrama reserve of 360,000 hectares--roughly the size of Trinidad--spot jaguars every other day, he said. With the rest of the world's forests disappearing at a rate of 15 million hectares a year, according to a 1999 World Commission on Forests and Sustainable Development (WCFSD) report, Guyana's biodiversity will become a valuable resource.

Dr Rod Keenan, a senior research scientist in Australia, observed in the same newspaper article that, "If people get money from carbon, it should be seen as a bonus. At this stage it shouldn't be factored into their economic calculations."

Cassells concurs that there may be benefits from carbon exchange programmes for Guyana but these would have to be considered in the light of overall national objectives for development.

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Guyana: Land of Six Peoples