Welcome to Guyana.
It is an honour to host you, and I hope that you will have the opportunity to experience a little of our country – whether here in our capital city, Georgetown, or in the vast rainforest and savannah that lie to the south. Whatever you choose to do, I am confident that by the time you leave, you will join those who preceded you in understanding our uniquely welcoming Guyanese hospitality.
Minister Singh has already spoken of the importance of this meeting, and of how the Commonwealth has proven its value time and again in addressing issues of global importance. Whether in the struggles against poverty, injustice and tyranny across the world, or in the work to establish and consolidate democracy across our diverse nations, the Commonwealth has consistently acted as a beacon to the world for the sustained promotion of universal values.
In today’s world, we need to draw on this strength more than ever. A child born today may live to see the 22nd Century. He or she will experience a world beyond our contemporary imagination, with possibility and opportunity of a scale and nature never seen before. Yet he or she will also experience a world facing challenges of a complexity unknown to our predecessors.
Whether the world of the child born today is defined more by challenges and problems, or by possibility and opportunity, is not something that is pre-destined. It is a direct consequence of many things - including the quality of vision, firmness of purpose and sustained dedication to hard work exhibited by today’s leaders.
As leaders in our Commonwealth, whether Heads of Government or Ministers of Finance, we bear a significant share of this responsibility. Our governments directly influence the lives of 30% of the world’s people, and through our moral influence and economic power we can help to shape the entire global community. The true test of our relevance is whether we choose to use this influence and power in a way which creates the world that future generations deserve.
Our foundations and track record are strong and the timeless principles which underpin our Commonwealth – respect for democracy, the rule of law, good governance, human rights, gender equity and sustainable development – represent an unchanging commitment to the betterment of people everywhere.
Yet as every leader knows, a solid foundation is not enough. If these timeless principles are to make a difference, we must devise and implement modern, progressive policies that deliver a far-reaching vision of opportunity for the people of our Commonwealth and the wider world.
It is to some of these policies that you will be turning your attention in the days ahead. In a few moments, I would like to talk specifically about the opportunities for the Commonwealth to strongly influence the climate change agenda. First I wish to make some over-arching comments on the need for Commonwealth Finance Ministers to draw on your experience and expertise to secure a fair voice for all the world’s countries.
As Minister Singh mentioned, the economic landscape of today’s inter-connected world is challenging. Yet these economic challenges are dwarfed by the new generation of globalised problems – terrorism, internationalized criminal networks, threats to energy security, human migration and climate change – which present difficulties that demand an unprecedented level of global collective will and action.
The best defense in dealing with these challenges is to create a world where freedom, opportunity, social justice and economic prosperity improve the lives and livelihoods of all the world’s people. Yet we are seeking to do this within a global governance architecture that was designed for the world of the 1940s, not the 21st Century. Organisations like the United Nations, the International Monetary Fund and the World Bank were founded to pursue noble goals. But if we as leaders do not ensure that these institutions are reformed in a manner which can cope with the challenges of the future, then we will be deprived of the vehicles for global collective action that these challenges urgently require.
Commonwealth Heads of Government and Finance Ministers have a unique role to play in ensuring that we reform existing, and create new, global institutions that are fit for purpose. The diversity of our countries coupled with the consistency of our values mean that we can strongly advocate for global reform with a conviction based on experience. Many Commonwealth countries have shared Guyana’s difficulties in seeking to engage with an international framework that is often insufficiently adaptable for individual national circumstances, and that carries with it a bias that is reflective of old-fashioned orthodoxies instead of being relevant to the challenges the modern world presents.
Nowhere is this more concerning than in addressing climate change, an issue which encapsulates greater than any the reality of an inter-connected world.
That climate change demands the attention of global leaders is no longer in doubt. We know that on current trends, average global temperatures will rise by two to three degrees relative to pre-industrial levels within the next fifty years. One sixth of the world’s population will be threatened by melting glaciers; hundreds of millions will be at risk of starving; diseases such as malaria and dengue fever will spread to new parts of the world; hundreds of millions of people will become displaced; and eco-systems upon which so much of the world’s agriculture and medicine depend will be placed at major risk.
As last week’s award of the Nobel Peace Prize to Al Gore and the UN’s Inter-governmental Panel on Climate Change so vividly illustrates, climate change is also an issue that impacts on peace and security around the world. Some of our countries are already coping with the impact of wars and conflict created by scarce water and other climate-induced phenomena. Those who are dealing with this impact on a daily basis do not need a lecture from the rest of the world on how climate change has profound human consequences – they see this every day. Instead they need the global community to start solving the problem.
And we are increasingly equipped with the capacity we need to do so.
For years, the overall science behind climate change has been understood. However, thanks to last year’s ground-breaking Stern Review, we are now in a far stronger position to quantify the economic cost. An increase in global temperature in excess of 3 degrees will cause losses in global GDP of up to 10%, with the costs the highest in the countries with the greatest social and economic development needs. By contrast, achieving the cuts in emissions that will avoid the worst extremes of climate change will cost around 1% of global GDP per annum.
Therefore the need for concerted global action to address climate change is no longer informed solely by our desire to avoid mass human suffering and injustice. It is also supported by credible economics and an understanding of the financial implications of failing to act.
However, if we are to create the world that future generations deserve, the valid science and credible economics must be matched by first-order political resolve to devise workable solutions that deliver results.
This will mean doing two things – one, ensuring that the global community focuses on those issues which have the greatest impact on averting climate change; and two, urgently devising practical solutions to address these issues.
On the first point – it is vital that the global community addresses the problems which are most important. Greenhouse gases can be cut in four ways – reducing demand for emissions-intensive goods and services, increasing efficiency in transport and energy usage, switching to lower carbon technologies for power, heat and transport, and reducing non-energy emissions by actions such as avoiding tropical deforestation. Our job as leaders is to ensure that proportionate attention is paid to addressing each of these areas for action.
On a positive note, the awareness of climate change issues amongst leaders and populations around the world is high and steadily increasing. The Kyoto Protocol represented a valuable start in combating climate change – the emergence of a 30 billion dollar carbon market is but one indicator that the problem is now being addressed with some level of seriousness.
However, while we must all welcome the fact that much of the developed world has started to take action, we must now work to ensure that this does not lead to a focus only on measures that relate to the developed world. For example, the new carbon market results in very little financial flows to the developing world.
On a related note, we must also ensure that the current limited focus of the climate change debate does not lead to deriving satisfaction from small-scale solutions which have a negligible impact on averting the worst extremes of climate change.
This is particularly visible in the excessive concentration on the role of aviation in climate change, which is already causing economic damage to the tourism and agriculture industries throughout the developing world. In our own region, the Caribbean, the tourism industry has started to suffer from developed world government policies which involve the imposition of punitive climate change taxes on aviation to discourage flying. This is a cruel irony when for years the same governments encouraged Caribbean countries to urgently diversify into tourism to maximize the value from one of the region’s most competitive advantages.
Similarly, scientifically invalid debate within the developed world on the impact of so-called food miles represents a new variant of localism which causes consumers to believe that food sourced overseas is less carbon-friendly than food sourced in their localities. Farmers throughout Africa, Latin America and elsewhere are not well served by this type of inaccurate and locally-focussed reaction.
We therefore need to elevate the climate debate to address matters that are truly capable of generating global impact. This means regaining a global mindset and being guided by clear science and empirical analysis of potential climate change mitigation solutions.
If we are to regain this global mindset, I submit to you tonight that four issues all require prioritized attention – (one) incorporation of the United States and Australia into the international framework for addressing climate change; (two) enabling the large developing countries, mainly China and India, to integrate with the climate change framework in a way which recognises that on a per capita basis, they are far lower emitters of greenhouse gases than much of the world, and in a manner which does not sacrifice their legitimate human developmental objectives; (three) addressing the specific concerns of the rest of the developing world, including ensuring necessary support for country-led adaptation strategies; and (four) avoiding tropical deforestation.
Of particular interest to Guyana is avoiding tropical deforestation. If we drive for two hours from where we meet tonight, we will be in the Amazon Rainforest. Almost 80% of Guyana’s surface area is covered by rainforest, and the portion of the Amazon that is formed by the Guiana Shield is the largest expanse of undisturbed tropical rainforest in the world. For many years, the contribution that the Amazon rainforest makes to the rain patterns which sustain the vast North American agriculture industry has been understood. Moreover, it has been known that the rainforest is one of the main sources of medicine for the world. Yet it is only in recent years that the immense contribution that the rainforest makes to carbon sequestration has been added to an understanding of this global asset.
For years, we in Guyana have made sustained efforts to protect the rainforest – as far back as 1989, the people of Guyana donated one million acres of rainforest at Iwokrama to the people of the Commonwealth and the world. Since then, Iwokrama has been a global leader in seeking to devise ways to promote sustainable forestry management, despite problems due to under-funding from international sources. More recently, in partnership with Conservation International, we have set aside a major area of forest to devise mechanisms for the exchange of economic value for eco-system services. However, valuable as these individual initiatives have been, they are not reflective of the scale of global action on avoiding deforestation that is needed. This is why it is particularly concerning that the existing climate change framework actually contains perverse incentives which would make it more economically valuable to cut down our forest than to preserve it.
I raise this, not simply because it is of concern for my country, but more importantly, because the absence of mechanisms for avoiding tropical deforestation within the global climate change framework is the single most glaring example of how the world is not adopting a proportionate focus on the options for combating climate change.
Tropical deforestation contributes 18 per cent of global greenhouse gas emissions – that is about the same as the United States, the equivalent of India and China combined, and more than the cumulative total of aviation since aviation began until at least 2025. In the next 24 hours, deforestation will release as much carbon dioxide into the atmosphere as 8 million people flying from London to New York.
Moreover, avoiding tropical deforestation represents the best value for money in mitigating against future climate change. The Stern Review described avoiding deforestation as a highly cost-effective way of reducing greenhouse gas emissions. The leading management consultancy, McKinsey and Co identified avoiding deforestation as the largest and most cost effective measure that could be taken.
Yet when compared with the world-wide attention that is being given to aviation, the paucity of intellectual analysis and political commitment to urgently progress this issue in the right way is an example of how we need to ensure a greater voice within international institutions for those countries that understand this issue. It is vital that we work as a Commonwealth to support the promotion of this voice to ensure that analysis, not anecdote, regains the upper hand in prioritizing climate change issues.
This leads to my second point – the need for practical solutions to address climate change in general, and tropical deforestation in particular.
And it is to this that I call on Ministers and officials to pay particular attention over the coming days. I call on you to work with us in advance of the upcoming meeting of the parties to the United Nation’s Framework Convention on Climate Change in Bali, to gain support for three principles:
First – as I have said, and as Stern and McKinsey have forcefully argued, we must recognize that tropical deforestation is by far the largest and most cost effective abatement solution for rapidly combating climate change.
Second - as we have pointed out for years, we must recognize that tropical deforestation across the world results from economic pressures. Sometimes this is due to illegal activity, but it is more often a function of the need to secure livelihoods for people who live in the forest, or for agricultural and other businesses to generate the profit that is essential to national development in countries across the world. We must square up to this reality, and recognize that the way to stop deforestation is to ensure that there is an economically viable alternative.
Third – in doing this, we must create incentives to reward both the preservation of existing forest, and support the restoration of forest which has been removed. This is not only morally right because countries like Guyana which have protected their forest for years deserve to be rewarded. It is also right because to not do so would result in economic leakages across national borders in the Amazon region and elsewhere - deforestation activities would migrate from countries rewarded for slowing down deforestation to countries where deforestation was not previously taking place. Towards this end, we must urgently change the current perverse arrangement within the climate change framework which provides a dis-incentive for forest conservation and protection.
In devising these solutions, we need to shun timidity and be bold in what we seek to achieve. Every day that we fail to act on avoiding tropical deforestation makes the achievement of overall climate change goals more difficult, and puts at risks the lives and livelihoods of millions in every part of the world. The time for solely pursuing small-scale projects and isolated pilots is over – we must devise solutions that are national and supra-national in scope. And we must recognize that solutions must ultimately be capable of being integrated within the global financial system, whether through existing carbon trading systems, or parallel vehicles.
Market-makers are preparing to act - long-term investment decisions by pension funds, insurance companies and other businesses are increasingly influenced by their need to take into account the impact of climate change on profit margins – we have much experience of this in the Caribbean region where insurance and re-insurance companies are grappling with ever more serious weather patterns such as hurricanes. It is in their interests to invest in climate change abatement strategies.
However, for the markets to support action to mitigate against climate change with an acceptable degree of risk, they look to policy-makers for regulatory and policy signals. As leaders in our countries – whether as Heads of Government or Ministers of Finance – our responsibility is to provide these signals, and Bali represents the next big opportunity to do so.
When I met with then British Prime Minister Tony Blair last year I outlined our offer to deploy almost our entire rainforest – which is the size of England - in the long-term service of the world’s battle against climate change. That offer remains. We stand ready to work with any bilateral or commercial partner who shares our vision of sustainable development where our long-established and world-leading commitment to sustaining our forest can be matched by economic reward which supports our national development efforts to create a socially just and prosperous country.
Climate change presents leaders with a far-reaching responsibility for meaningful action. Future generations will judge us by our actions in the face of this responsibility. I spoke earlier of how a child born today may see the 22nd Century. The shared values and history of our Commonwealth provide us with a unique platform from which to create a better future for him or her. Let us reaffirm the importance of our Commonwealth to ensure that we do not let this child down.
Thank-you.
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