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guyana and the wider worldEconomic growth and net forest loss

This week’s column continues with the exploration of the relationship between, on the one hand, Guyana’s population and real national income growth, and, on the other, its rate of net forest loss/deforestation, over similar long-term periods, (that is roughly from the early 1960s to the early 2000s). The two former variables (population and real national income growth) are usually combined and represented as real per person/per capita national income growth. In turn, Guyana’s national income has been substituted by its GDP; so that the measure utilized becomes per person/per capita GDP growth.

Regular readers of this column would be aware that, routinely, changes in real per capita/per person GDP growth are considered as the ‘standard’ measure of a developing country’s economic growth.

Based on this consideration, research on Guyana shows the estimated annual long-term annual economic growth rate for the period 1961 to 2000 is low; that is, roughly 1.06 per cent. Similarly, the annual rate of net forest loss/deforestation for the same period is also low,estimated at only 0.4 per cent. Consequently, if we divided the former (annual real economic growth) by the latter (the annual deforestation rate); that is,  the resultant ratio obtained is 2.65. As revealed in last week’s column, this ratio has been applied to different annual rates of economic growth for Guyana. Specifically, the authors of the research have chosen growth rates of 3, 5 and 8 per cent, respectively. When these rates are applied they yielded rates of deforestation of 1.1 per cent (or); 1.9 per cent (or); and 3.0 per cent (or).

Constructs

The ratio derived from the relation of long-term economic growth rate to the deforestation rate is then treated as a reliable predictor of the future. The question that logically arises therefore will be: is this a plausible expectation? In turn, such a question touches on one of the most fundamental questions in the analysis of forests: is there a fundamental transition, which, empirically, all national forests go through, in terms of their relation with economic growth? Before responding to this directly, I need to first tie up some loose ends of the analysis raised thus far.

The loose ends

The first of these loose ends is that I have not attempted in my presentation so far, to interrogate the accuracy of the long-term estimates, which were made of Guyana’s annual real per capita GDP growth and its annual rate of deforestation/net forest loss. My reason for not doing this, is that after reviewing the research of D Alder and M van Kuijk, I felt confident that their estimation was sound.

Nonetheless, I wish to caution readers of the maxim, (as indeed the cited authors themselves do): “Projections have validity only relative to their assumptions”. However, I am fully satisfied with the assumptions that were applied in these estimations, and am fully aware that these assumptions have effectively determined the outcomes.

Secondly, the relationship between long-term annual real per capita/per person GDP growth and annual deforestation/net forest loss exhibits a correlation. It does claim that one causes the other; although, in the study, it is implied that real per capita/per person GDP growth has directly impacted deforestation/net forest loss. The presumption is that slow economic growth has been the independent variable, which has lowered the deforestation rate. The reverse influence however is also quite plausible. That is, low rates of deforestation represent underutilization of resource potential and this could yield low GDP growth rates.

I believe, however, the most plausible outcome, is that both variables would have interacted with each other over time, yielding a statistical relation that has been used for the simple projection exercise. Readers, therefore, should keep constantly in mind the other related maxim: “garbage in, garbage out” (GIGO).

Thirdly, the two authors had labelled their three selected economic growth rates (3, 5 and 8 per cent respectively), as representing different “scenarios”. This means that their growth rates were not selected at random. Instead, they conformed to plausible future expectations for Guyana.

Indeed, the actual past rate of 0.4 per cent per annum was obtained from their review of previous experiences, and is labelled by the authors as the “Historical Preference or Nostalgic Past Scenario”. This scenario was largely gathered from aerial photography and FAO’s inventories. Among the three selected rates, (3, 5, and 8 per cent), 5 percent per annum is the median, and therefore their most likely rate, which as they state is in the absence of a satisfactorily working Reduced Emissions from Deforestation and forest Degradation (REDD+) mechanism. As expressed in their study, the rate of 5 per cent per annum actually involves “expansion of infrastructure, settlements, mining areas and agriculture, with accelerated logging”. (ibid)

Fourthly, if it is argued, economic growth is a primary driver of Guyana’s net forest loss, the question arises: how is this reconciled with the strongly (and also widely) held view that the indigenous peoples of Guyana, have, by conscious design, chosen a low carbon development path, which entails their indefinite stewardship and conservation of the forests, qua forests?

This topic however, cannot be fully addressed until after my discussion of ‘forests transition theory’, which begins in next week’s column.

Conclusion

In conclusion, I direct readers to the purpose of the report, on which I have been basing recent presentations. That report is a product of the Guyana: Forest Carbon Stock Assessment Project. This Project has been undertaken by the Guyana Forestry Commission, GFC, with support from the World Wildlife Fund for Nature (WWF), and Conservation International.

The terms of reference of the report required, among other things, the development of projections for Guyana both in terms of baseline/status quo reference points, as well as under various future scenarios.