Jagdeo blasts UK group’s ‘junk economics’ assessment of LCDS

Guyana’s President Bharrat Jagdeo has dismissed the UK group that said Guyana’s Low Carbon Development Strategy (LCDS) was based on “junk economics”, saying that the group was right wing and wanted to keep this country in slavery. 

In a report released on November 25, Rainforest Foundation UK said that the method used by international consultants McKinsey and Company is distorting the Reduced Emissions from Deforestation and forest Degradation (REDD) programme, insisting that it could cause more harm than good.

“The cost-curve is methodologically flawed, as it does not show the real costs of REDD: it substantially underestimates the cost of reducing emissions from activities such as subsistence agriculture, and it often bases calculations of compensation on inflated, unverifiable projections,” the report said.

But Jagdeo told Guyana Times international that the views expressed in the report are a clear case of “colonial syndrome”, noting that these groups want to talk on Guyana’s behalf and do not want to see the country make independent progress. He also believes that many groups like Rainforest Foundation, the REDD Monitor and others are funded by right-wing activists who do not believe in climate change. As such, the president said that he does not take their comments seriously.

McKinsey & Company are the architects of Guyana’s LCDS and similar strategies in Brazil, Indonesia and the Democratic Republic of Congo (DRC). The analysis of the world-renowned consultant has been used in national plans to reduce deforestation, some of which have already been approved for funding by the World Bank. According to the Executive Director of Rainforest Foundation UK, Simon Counsell, “probably the only way McKinsey’s supposed bargain-basement carbon savings from the programmes to reduce deforestation could be achieved is by evicting millions of people from their subsistence farming”.  The report also shows that McKinsey suggested weakening existing environmental legislation related to logging in Guyana, and expanding industrial logging and palm oil plantations in the Congo Basin.

“McKinsey’s flawed analysis could be dangerous in the fight against climate change, as it makes it appear much cheaper and easier to tackle tropical deforestation than it would be in reality,” Counsell said. “It may lead us to postpone the real actions that need to be taken at home to prevent climate change.” 

Meanwhile, the report, which has created quite a stir locally, recommended that the McKinsey cost-curve in its current form not be used to inform national or international REDD strategies or programmes. It also advised that the full cost, including consultation, transaction, necessary legislative and institutional reform, and implementation costs, be included in the design of  REDD programme. More research was also suggested to determine the real costs of reducing deforestation from subsistence agriculture, rotational farming and other policy options.

 The REDD programme is designed to use market/ financial incentives to reduce greenhouse gas emissions from deforestation and forest degradation. REDD offers the opportunity for developed countries to fund the reduction of deforestation in developing countries.