Guyana’s responsibility to develop its resources

AS we move out of the COVID-19 crisis, developed nations including the United States, the United Kingdom, and China are calling for increased production of oil and gas resources to meet rising demand, despite parallel concerns about climate change.

But these countries often have a very different message when it comes to countries like Guyana beginning to develop their own resources. Industrialised countries are “pushing the developing world to maintain per capital low emissions, but that could keep them in a low emission, low-income trap for the future,” Vice President Bharrat Jagdeo said at a recent Baker Institute event at Rice University in Houston.

Calls to stop development would have serious implications for Guyana’s efforts to increase standards of living and create new opportunities. As Vice President Jagdeo also alluded to in his remarks, many of the countries that are now calling for limiting fossil fuel development made their wealth and were able to become highly developed partly because of their own natural resources.

Norway and Canada, for example, were able to harness resource wealth and develop into highly advanced societies. Each now possesses a highly developed and diverse economy but still produces vast quantities of oil. This is often what sustainable long-term success looks like.

But countries that have recently entered into energy sector development are facing a different global attitude – that they should instead focus on sustainable development. The challenge is that economic diversification, renewable energy, and infrastructure development can be expensive. Without a large infusion of capital, many developing countries have little hope of making rapid moves towards sustainable development.

Although Guyana has historically been only a tiny emitter of greenhouse gasses, and a net carbon sink overall, it now faces a reality of rising seas and stronger storms that it must be prepared for. The capital itself may require significant efforts over the coming decades, and the seawalls and dikes which protect the coast against storm surges, date from the colonial period and are in desperate need of repair and upgrade if they are to survive rising sea levels.

With environmentally sustainable development of oil and gas resources, developing countries can both generate the revenues they need to develop more economically over the long term and mitigate impacts on the environment. The government has maintained that development is Guyana’s sovereign right and it has a responsibility to develop its resources, if doing so means raising living standards and providing better healthcare, education, and economic opportunities.

As Vice President Jagdeo explained at the recent Offshore Technology Conference, “we can develop the industry in our country, it can grow rapidly, it can produce the wealth that could help us to change people’s lives and that’s crucial for us. We can do so in Guyana’s case, by continuing to invest in and use some of these resources to invest in a decarbonised future consistent with our low carbon development strategy.”

But all that investment will not come cheap. That’s another reason why oil and gas revenues will be so vital in the decades ahead. Increased economic activity from oil is leading to new, higher paying job opportunities. Greater financial resources are increasing access to better education and other opportunities. New construction is rising all over Georgetown and the government has not even spent a dollar of the US $400 million in the Natural Resources Fund yet. This is how Guyana is planning for its future.

While it is important to understand that resource development is highly economically transformative, it is equally important to see how environmentally responsible Guyana has been in its development process so far.

Guyana is home to some of the strictest environmental standards for resource development and has been an eager participant in efforts to combat climate change at the United Nations and on the regional level. Its forests, which are strictly preserved in a way few countries can match, provide the country with a huge carbon sink, and have longed helped to mitigate the emissions of the developed world.

It is the government’s duty to ensure that this oil continues to be developed as safely and responsibly as possible to protect the environment. But it is also worth heeding the Vice President’s advice when critics from wealthy and oil rich countries train their focus on Guyana.

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