President Irfaan Ali on Thursday afternoon launched an ambitious new development plan centered on making money by saving the forest and creating solutions to the climate crisis while pursuing a prolific oil and gas industry.
“Guyana’s forests alone are estimated to provide global value from US$40B to US$54B annually,” the President declared during the launch of the Expanded Low Carbon Development Strategy (LCDS) to guide the country’s development over the next 10 years.
Guyana’s forest store 21.8 billion tonnes of carbon. Cutting them down would mean releasing the harmful gases into the atmosphere causing further harm to the environment.
Since 2009, Guyana has been bargaining at the United Nations for a system that pays the country for keeping the forest intact. Norway was the first to buy in, signing a deal for USS$250 million, once deforestation rates remain intact.
And that has been the case. Latest figures from the authorities put the deforestation rate at 0.006 perfect, that’s 90% lower than most tropical countries.
So, the country is shopping around for countries and companies who want to offset the harmful gases they are sending into the atmosphere by paying Guyana to keep its forests standing. A US$300 million deal is in the making.
The revenues generated from these efforts will go into developing the country even as it expects a windfall from the oil and gas industry owing to over 20 discoveries by ExxonMobil which would allow for the production of some 10 billion barrels of oil.
Dr Ali explained that the government is not pursuing oil and gas in a sloppy way. He announced that his government will pursue strong policies to ensure that its oil and gas sector operates to international standards.
“The government is working to eliminate flaring from oil production, except in the case of genuine emergencies,” he said in an address to the nation.
All flaring is taxed at US$45 per tonne of carbon beyond the limit allowed by law.
“For newly-licensed production, the tax on flaring will be accompanied by legal limits on the overall amount of flaring,” the President stated.
ExxonMobil Guyana was flaring 15 million standard cubic feet of gas prior to July due to mechanical difficulties with the flash gas compress on the Liza Destiny oil production vessel.
That amount of gas was equivalent to about 1,152 tonnes of Carbon Dioxide equivalent (CO2e).
With Guyana’s oil revenues, Dr Ali said there will be the highest level of investment in health and education and other sectors while saving for the future.
“This investment 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 put the days when Guyana could not afford to run its Government even further in the past,” Dr Ali stated.
How the government will spend the oil revenues will be determined when the Natural Resources Fund is finalised in the coming months.
