Guyana, Norway still discussing 2012 payment

In the face of deforestation levels that rose above a benchmark set under its forests protection partnership with Norway, Guyana is yet to receive payments for 2012, with discussions continuing on the figure which is expected to be cut.

“Discussions are currently ongoing on the payment for Year 3 (2012). These discussions should be finalized soon,” Minis-ter of Natural Resources and the Environment Robert Persaud told Stabroek News in a brief comment recently. Guy-ana’s deforestation figure for 2012 has been confirmed at 0.079%, a figure at which cuts in payments to Guyana under the forests protection partnership with Norway are expected to kick in.

When the initial figures were released last year, Persaud had said that once increased deforestation is confirmed by independent verification exercises, Guyana will lose out on around US$20 million of the payment it would have received for Year 3 (2012) under the forest protection agreement.

The preliminary report on deforestation rates for the year 2012 compiled by the Guyana Forestry Commission (GFC) and the forestry consulting firm Indufor showed that Guyana’s deforestation rate jumped to 0.079% in the Year 3 reporting period (2012), from 0.054% in the Year 2 reporting period (2011). The figure was verified and confirmed by the Norwegian certification firm Det Norske Veritas.

Andreas Tveteraas, Deputy Director of the Norwegian Climate and Forest Initiative had told Stabroek News in January that they could not state the final payment at that point. “Any increase in deforestation will be reflected in future payments, as set forth in the agreement,” he had said.

Under the Guyana-Norway partnership, payments are result-based with deforestation and forest degradation measured against an agreed level. Guyana could earn up to US$250 million from Oslo in performance-based payments for the period up until 2015, based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities.

Under the updated Joint Concept Note (JCN) of the Guyana-Norway partnership, Guyana will be eligible for full payment if the deforestation rate does not exceed 0.056%. For deforestation rates between 0.056% and 0.1%, eligibility for payments would be calculated as a gradually decreasing percentage of the payments that would be due. At deforestation rates at or above 0.1 %, no payments would be due to Guyana for that given year.

In illustrating how compensation would be reduced if deforestation exceeds the 0.056% rate, according to the JCN, at a deforestation rate of 0.07% compensation would be reduced by 25%; at a deforestation rate of 0.08%, compensation would be reduced by 45%; at a deforestation rate of 0.09%, compensation would be reduced by 70%; and if the deforestation rate reached 0.1%, no payments would be due to Guyana. For 2011, Guyana earned US$45 million under the partnership.

The Year 3 report had said that the main deforestation driver for Year 3 is mining, which accounts for 93% of the deforestation in this period. This continues a trend of mining being responsible for over 90% of deforestation since assessments began.

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