Dec 11, 2016 News
By Kiana Wilburg
Guyana depends heavily on imported oil for its power needs. In fact, the country’s installed power generation capacity is about 83 percent oil-based and 17 percent biomass (bagasse)-fuelled.
This capacity translates into a generation mix that is almost entirely dominated by oil-based generators, which supply about 95 percent of the nation’s power consumption.
This situation often leaves Guyana with no choice but to expend millions of dollars annually for its fossil fuel needs.
Global fiscal watchdogs, such as the International Monetary Fund (IMF), upon noting this state of affairs in Guyana, believe that the oil-dependent power generation mix contributes to macroeconomic instability. This means that it is one of those factors which affect the stability of national production and/or profits.
As such, Guyana has been warned to make haste towards alternative sources of energy which would also benefit the environment. These include solar, wind and hydropower. Such a situation is often classified as “greening the economy.”
Since the APNU+AFC government assumed office, it has supported the adoption of a sustainable model of alternative energy.
According to President David Granger, a ‘green’ economy is necessary to ensure the management of the nation’s natural resources.
In fact, it was on the occasion of the opening of the 11th Parliament that the President Granger gave a solemn commitment that his government will be moving to realize a Green Economy in Guyana. And efforts in this regard have been unceasing.
The broader concept of a Green Economy means that efforts are made to ensure improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. It includes a resilient, low-carbon, socially inclusive economy that provides a better quality of life for all within the ecological limits of our planet.
Additionally, it is built on the basic tenet that people need nature – for now and in the future.
Granger at the Congress of the People’s National Congress Reform said that a ‘green’ economy is necessary to ensure the sustainable management of its natural resources.
He said that a ‘green’ economy is also needed to wean this country off of its addiction to fossil fuels. He said that the importation of these fuels exacts a heavy burden on the economy.
The President noted that Guyana, in 2012 expended the equivalent of 24 percent of its Gross Domestic Product on petroleum-based products.
The Head of State asserted, “We propose to transition our economy rapidly towards clean and cheaper sources of renewable energy. We will craft a comprehensive Coastal Zone Management Plan to protect human habitation, our coastal economic sectors and coastal ecosystems. We will create ‘green’ enterprises and jobs and we will inculcate ‘green’ education in our schools.”
Guyana’s Finance Minister, Winston Jordan, has also spoken on several occasions about the need for Guyana to transition to a “green economy” stage.
In his view, Guyana’s Green Economy must be built around Article 36 of the nation’s Constitution that requires that the government sustainably extracts natural wealth for the benefit of current and future generations.
He said, “In practical terms, this means that we must grow the total wealth of our nation. As a country that is so heavily dependent on its natural resources, we must exploit and use our minerals and other natural resources responsibly so as to increase the total stock of our resources, which is made up of our human, social, natural, and built capital.”
The Finance Minister said that the proceeds of resource exploitation must be invested to grow the capacity of the people and society as a whole; to diversify the economy; to improve the sustainable and resilient infrastructure needed for this Green Economy; to establish the robust governance systems that ensure that these gains are sustained; and to ensure that the nation’s basic natural asset remains available for the next generation.
The economist said that this must not only be measured by the roads that are built, the rivers that are bridged and the energy that is generated.
He believes that it necessarily also includes the systems the government and its relevant agencies put in place to ensure that waterways are conserved for citizens’ livelihoods, for their recreation and for the nation’s traditions.
The Finance Minister said that it also consists of the systems for the management of the nation’s forests and savannahs which it conserves and sustainably manages, for the soils and freshwater they produce and replenish.
As for Government expenditure, through budget provisions, Jordan says that is only one part of the economic transformation of the country when it comes to the green economy movement.
In fact, the economist insists that investments made by Government must be complemented by investments made by the domestic private sector, alongside foreign direct investments, and by civil society in order for this Green Economy to be realized.
He reminded of Government’s promise to establish a Sovereign Wealth Fund, in which it expects to protect the economy from the volatile nature of mineral revenues, help grow and modernize the sustainable non-extractive sectors of the economy, and further enhance the capacity of the people.
The Finance Minister said that this Fund will also help to avoid the potential negative impacts of a sudden surge in national revenue expected from the establishment of an Oil and Gas Industry in Guyana.
He said that examples of these impacts can be seen in many parts of the world and Guyana must avoid becoming another such example.
“But in addition to our efforts in the mineral sector, we have to find appropriate mechanisms to internalize the costs to the environment from doing business in Guyana in general…The principle of a green economy will pervade all of our sectors and our work. From the reduction in the use of paper in offices to expanded use of renewable sources for generating energy across the country, from recycling of paper and, in the future, plastics to green agriculture and climate -smart designs for our buildings,” the Finance Minister expressed.
He insists that the year 2020 will reveal a Guyana that is demonstrably more environmentally responsible, a Guyana that will be truly considered a Green Economy.
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