Minister of Finance, Dr. Ashni Singh, is in Seoul, South Korea, to meet with some of the world’s largest pension and sovereign wealth funds and other investors to discuss the priority transformative investments outlined in Guyana’s Low Carbon Development Strategy. This follows discussions between President Bharrat Jagdeo and Korean President Lee Myong-bak, during President Jagdeo’s visit to Korea to receive the United Nations “Champion of the Earth” award.
On Wednesday evening, Minister Singh gave the feature address at the Pensions 80 Summit 2010, addressing representatives from funds controlling several trillion dollars. He outlined the global need for developing countries and investors to come together.
Minister Singh said, “You, like other long term investors, know that climate change will have a severe impact on the maximisation of the long-term value of your investment portfolio. We, like other developing countries, know that climate change will have a severe impact on the well-being of our people. In other words we face a shared threat… We need to ask, how we can turn the shared threat … into a shared opportunity.”
He outlined the opportunities present in Guyana and other developing countries for low carbon development.
Korea is widely seen as one of the world’s leading low carbon pioneers. In 2008, President Lee proclaimed “Low Carbon, Green Growth” as Korea’s new national vision. As a member of the G20, Korea is one of the world’s largest emerging economies, and in response to the global financial crisis, Korea’s fiscal stimulus had the largest portion devoted to low carbon development of any country in the world. Korea’s stated aim is to “become a role-model for the international community as a green growth leader”, and has emphasized the need for private investors to invest in green growth in Korea and internationally.

PRIVATE INVESTORS
During his time in Korea, Minister Singh will be meeting with investors to discuss how private investors can invest in low carbon priorities, based on joint Korea/Guyana experience in driving low carbon growth.
At the P80 event, Minister Singh spoke of the potential for massive investment by Asian and other international pension funds and sovereign wealth funds in global low carbon development. “The bulk of future global greenhouse gas emissions under a business-as-usual scenario will come from developing countries, perhaps as much as 70% of new annual emissions by 2020. Yet at the same time, developing countries will not act on climate change if it means choosing between this action and their own national development,” Minister Singh said.
Similarly, the trillions of dollars of future capital flows for necessary low carbon policies and technologies can only come from the private sector. And private businesses will not make the investment decisions to do this unless they see a path to profit that makes better business sense than the other opportunities they face.
“So we need to find a response to climate change which aligns these realities. We need to move on from seeing climate change purely in terms of its cost, but also to see it in terms of the opportunities presented by a once-in-a-lifetime economic transformation. One that, if it is to be effective, will have to happen at a scale that will make the information and communications revolution of the past decades seem small.”

CLIMATE STABILITY
The Minister was joined by outgoing United Nations Framework Convention on Climate Change (UNFCCC) Executive Secretary, Yvo de Boer, who outlined the challenges of achieving climate stability in the coming years, in particular as countries prepare for the next UNFCCC Conference of Parties in Cancun, Mexico.
Minister Singh supported Mr. de Boer in advocating for long-term action and global responsibility.
“Today, many progressive companies and countries who want to start acting to be a part of the economic transformation are frustrated,” he said.
Even though they recognise that investing in a high carbon future is ultimately a bad business or national development decision for which they will suffer, they are frequently unable to translate this recognition into individual investment or national policy decisions.
In many – though not all – jurisdictions, this is because the national policy environment has not been modernised to catch up with preparing for the new economic transformation opportunities that lie ahead.
Minister Singh said this is in large part due to the absence of a modernised international policy environment which puts a price on high carbon activity and a reward on low carbon activity, and this therefore needs to change.
The position of the Government of Guyana is that a legally binding global climate treaty is needed and it advocated for such a treaty at Copenhagen, and will advocate for it at Cancun, Mexico.
Guyana, he said, also believes that an international carbon market is the most efficient way to internalise the externality of the economic cost of greenhouse gas emissions as this is the way to leverage deep, binding emission cuts in today’s developed world, and to allocate capital via the carbon market or markets to fund mitigation and adaptation in the developing world, where that is more efficient.
But Minister Singh stressed that this result can only be achieved if it is also advocated by other key stakeholders.

NATIONAL POLICIES
“We believe that large institutional investors must play an active, advocating role. It is not enough to act as passive observers of national and international policy debates – that is not good for the climate, for developing countries or for your own bottom lines.”
He urged participants of the P80 event that they can advocate for State parties to make meaningful commitments within international negotiations.
“You can argue for national policies that accelerate greater energy efficiency, ensure better agricultural and other land use practices, drive more energy-efficient businesses and industries, deliver cleaner transportation and transportation infrastructure, and facilitate a better valuation of the environmental services provided by forests and other natural resources. You can also use your influence in the formation of effective market regulation of climate impacts, for example, to encourage the corporate disclosure of those impacts, and to create a corporate governance environment where climate polluters are unable to hide.”
Notwithstanding the fact that the Cancun meeting is only six months away, Minister Singh spoke of how progress can be made before the meeting there.
“I believe that there are three related things the international community can achieve if pressurized to do so by developing countries, institutional investors and others.
First, he said, it can start significantly scaling up support for countries which are seeking to develop low carbon development strategies. If private investors are looking for long-term policy stability, the very fact that countries have gone through the difficult task of producing, and gaining national support for low carbon development strategies sends a signal that the long-term direction of that country is towards low carbon development.

GLOBAL TREATY
“Second, until we get a global price signal for carbon via a global treaty or a suite of complementary policy alternatives, at least we can see real action on climate financing within the terms outlined in the Copenhagen Accord.”
The developed world committed to providing fast start funding of $30 billion in the period 2010-2012, and determining how to secure US$100 billion of public and private investment a year by 2020. While this is only a part of what will be needed t
o effect the economic transformation, it nonetheless represents an unprecedented capital allocation towards climate change investment.
The international community can achieve a deal on reducing emissions from deforestation and degradation, what is known as REDD+.
“As most of the people in this room will be well aware, emissions from deforestation and forest degradation cause 17% of all the world’s greenhouse gas emissions. What you might not be aware of is that over 30 countries identified specific measures to secure seven Gigatons of cumulative emissions reductions by 2015 for less than Euro 25 billion, that is less than $5 a tonne. If we secured this, it would be the single biggest source of greenhouse gas abatement in the coming six years, and would “buy time” for the implementation of the more expensive and time-consuming abatement solutions.”
He noted that progress is being made in this area, stating that three weeks ago in Norway, Heads of Government and Ministers from over 60 countries gathered to create an Interim REDD+ Partnership to try and secure immediate action on REDD+.
“If we achieve these three things before Cancun …we can start to demonstrate that it is possible to catalyse international flows of finance into low carbon development in a way that promotes socio-economic advances in developing countries and generates profit for businesses. And we can give impetus to the work to secure a legally binding agreement quickly by proving that this progress is possible.”
The Minister used Guyana’s Low Carbon Development Strategy as an example of what can be done, noting that, “The President of Guyana, Bharrat Jagdeo, saw this three years ago.
Notwithstanding the immense climate change adaptation challenges Guyana face, he said “We don’t just want to complain about climate change, we want to do something about it.”
He said that while the country suffers disproportionately from the impacts of climate change, as a country where almost 80% of its territory is pristine tropical forest, it is making a disproportionate contribution to solving climate change.
Minister Singh told the audience of President Jagdeo’s proposal that Guyana would be prepared to put its entire rainforest – which is about the size of England and provide the world with immense carbon benefits – under long-term protection if the right economic incentives were created, and that the country would invest these payments to re-orient its economy onto a low carbon trajectory. (GINA)