Guyana Creating Incentives to Avoid Deforestation

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December 2008
Document Type: 
Government Entity: 
Republic of Guyana
McKinsey & Company
Coverage Date: 

National development is of utter importance for countries like Guyana where social and economic needs take precedence over anything else. To reconcile the world's need for forests to kept be intact then Guyana should make deforestation a complementary objective to enhance national development. The memorandum Creating Incentives to Avoid Deforestation is focussed on how the UNFCCC process can create the incentives to make this complementarity possible. UNFCCC process, however, is only a part of the solution and if the long-term objective of sustainability is to be achieved, any measures to address deforestation require the support of those who live in and depend on the forest. 

The memorandum provides an analysis of what will be needed to align the economic interests of tropical forest countries with those of the broader world community. The first section of this memorandum sets out two foundational concepts-economic value to the nation (ENV) and Economic Value to the World (EVW)-that bound the solution space for avoiding deforestation. The second section describes an approach for calculating EVN and uses Guyana as a case study. The final section discusses implications for designing a mechanism to reduce emissions from deforestation.