[A slightly longer version of an article that appeared in the Globe and Mail, January 19, 2008]

A South American president surprised his people when he offered to let foreign conservationists manage rain forests in return for aid. A new way to reconcile development and the environment, or a new eco-colonialism? Christopher Frey reports.

FAIRVIEW, GUYANA–It’s the first time anyone has asked Bradford Allicock his opinion about the bold new plan for the rain forest he calls home. Late last year, Guyana’s president, Bharrat Jagdeo, told Great Britain he would turn over environmental management of the forests in return for aid and investment. A month later, the first journalists and TV camera arrive in Fairview, the Amerindian village where Mr. Allicock is the toshau (village captain).

Stepping away from the Pentacostal service occurring in the shade beneath his stilt-raised house, Mr. Allicock says he first heard about the offer in the media. Locally there’s been talk about carbon offsets and carbon sinks. Despite the fact that his people weren’t consulted, he welcomes Mr. Jagdeo’s proposal, saying it is better than the alternative.

“I see the footage of what the big timber companies are doing other places in Guyana. And I’ve spoken with other communities who’ve shared their bad experiences. Our forest is still here. It’s still standing. So let’s ensure the future generations will benefit.”

Mr. Jagdeo’s offer surprised everyone. Describing the rain forest as a “global asset in the fight against climate change,” Mr. Jagdeo appealed to the British government and NGOs to assist Guyana in safeguarding it, through bilateral investments in conservation and sustainable development.

Poor nations need to be compensated for the economic costs of avoided deforestation (the political term for such forest protection), he argued. They need technology transfers to help build a green economy. With his country’s standing rain forest as eco-collateral, he wanted a payoff not to embark on the same road that once made the developed world wealthy.

It could become a test case for how the world deals with the conflict between economic growth and environmental responsibility in developing countries. Critics worry Guyana’s model might undermine the sovereignty of struggling countries and engender a new form of colonialism in which poor nations hand over crucial decisions about their future in return for a cheque.

Meanwhile, rich governments will be looking to the emerging carbon-credit markets to help finance such schemes, even though it has not yet been proved to reduce greenhouse emissions.

English-speaking Guyana still possesses 50 million acres of virgin rain forest, part of the Guiana Shield that reaches into Venezuela, Suriname, French Guiana and Brazil. It’s among the four largest tropical rain forests on earth still relatively intact.

Mr. Jagdeo’s proposition came sandwiched between Sir Nicholas Stern’s landmark report on climate change in early November—which recommended avoided deforestation as an inexpensive step toward climate stability—and the UN Climate Change Conference in Bali, convened to begin negotiations on a successor agreement to the Kyoto Protocol.

Limits to deforestation were not included in Kyoto although cutting of tropical forests accounts for 20 per cent of greenhouse-gas increases (second only to the energy industry). The final communiqué at Bali talked of exploring “policy measures and positive incentives” to encourage avoided deforestation.

How is Britain reacting to Mr. Jagdeo’s proposal? According to Fraser Wheeler, the British High Commissioner in Guyana, “We’re looking at it and we’re very interested.”

In the country whose rain forests are at issue, however, the proposal has been met with a mixture of confusion, scorn and cautious support. Guyana’s politics are notoriously polarized—allegiances are often determined by race, and a legacy of corruption ensures a strong dose of public skepticism. The government has yet to fully explain its plan through a discussion paper or convene a meeting of stakeholders. Local loggers and the large Malaysian and Chinese-owned forestry companies want to know what it means for their existing concessions. And while much of Guyana’s standing forest may be uncut, it is part of a vast, largely unpoliced frontier.

The opposition is especially rankled at the president’s decision to appeal exclusively to the U.K., Guyana’s former colonial master, rather than pursue a multilateral approach. Even advocates for conservation have expressed disappointment that there was no public consultation first.

Robert Corbin, the leader of the opposition Peoples’ National Congress Reform (PNCR), has likened the direct pitch to Britain as a return to colonialism. He calls the deal “a new form of serfdom in the 21st century.”

But Dane Gobin, acting director of the organization that manages the Iwokrama Forest Reserve, presently Guyana’s most prominent protected area, says there were pragmatic reasons to approach Britain as a partner—the U.K. has been one of the leading movers of debt relief for developing countries, its consumers are perceived as pioneers of fair-trade shopping and London has already become the world centre for the carbon-trading market.

Gobin even sees the lack of consultation in a positive light. “I think it might have been strategic in terms of dropping a bombshell, in that it raises immediate awareness,” he says. “The media is coming here, so Guyana is getting huge mileage from it.”

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This talk of avoided deforestation, and achieving value from it, arrives at a critical juncture in Guyana’s development. With 90 per cent of its 750,000 people living along the Atlantic coastline, there is little population pressure on its rain forest. But the globalizing world economy is another matter. Transnational logging, mining, gas and oil companies are increasingly turning their attention to the resource wealth locked away in the country’s densely forested interior. They are also looking off-shore, where a recently settled dispute with Suriname over maritime borders, has cleared the way for further exploration of a oil deposit which the U.S. Geological Survey estimates could be the world’s second largest unexplored reserve. Toronto-based company CGX Energy owns the development license.

Meanwhile, a joint effort with Brazil is under way to upgrade and pave the narrow, rugged belt of road that traverses the country from the capital, Georgetown, to the south. The highway would give the northeastern Brazilian province of Roraima, on the cusp of a boom in timber, tourism and mining, convenient access to Guyana’s deep-water coastal port for shipping. But it would also dramatically transform the Guyanese frontier, reducing travel times, improving safety, and opening its hinterland for future development, sustainable or otherwise.

For the time being, though, the clay-packed road still dyes everything that travels over it an ochre-red. In the Iwokrama Forest Reserve, Ron Allicock stands in the back of a pickup truck sloshing along that artery after a rainstorm, its spray staining clothing and skin. Blue morpho butterflies flutter across the narrow slip of track while ice cream clouds soak up the equatorial sun.

Mr. Allicock is a birding guide from the Iwokrama field station and Bradford Allicock’s nephew. As the truck speeds beneath the outstretched canopy of green, he identifies the many birds circling or darting overhead—red-billed toucans, jabiru storks, king vultures. Jaguars occasionally survey the road through a crack in the forest wall, like sentries of its stunning biological diversity.

The forest and its waterways harbour arapaima, the world’s largest freshwater fish, and endangered species such as the giant river otter, black caimans, giant river turtles and the rare harpy eagle—the strongest, most agile and efficient avian predator.

Mr. Jagdeo has said he would like Iwokrama to serve as the model for the rest of Guyana’s standing rain forest. Mr. Allicock is a product of Iwokrama’s commitment to Amerindian development and stewardship. The studious looking twenty-nine-year-old, a native of Surama Village, is part of a process that begins with children’s nature clubs and continues with opportunities in ranger training, guiding and forest management.

“When the researchers first came,” he says, “they needed people to help them find the birds, the mammals, the fish, whatever they were looking for. I never realized that 10 years later that’s what I would be doing with my life. And that I could make money from it.”

“As a guide, I have to be able to interpret, I have to know the scientific language and what it means in the local language. But I believe local knowledge and scientific research are equal, because when you combine them, you often come up with a solution or something to better base the future on.”

Iwokrama calls it “citizen science”—taking local indigenous knowledge, what many of the Amerindians already know, and supplementing it with training in data collection and analysis, the basics of western science.

The million-acre reserve has grown into an internationally recognized research station and slowly nurtured an eco-tourism business that attracts about 1,000 visitors a year, many of them birders. It is home to 16 Amerindian communities that are directly involved in the reserve’s management and economic initiatives.

While Iwokrama received substantial foreign funding in the decade after its inception in 1989, it has struggled in recent years as donor agencies have prioritized funds away from the environment and toward poverty reduction and HIV/AIDS initiatives. When Iwokrama recently commenced a sustainable logging operation within the reserve, it was greeted with shock. But Mr. Gobin insists that Iwokrama was never intended to be purely an act of conservation—it was an experiment in sustainable development.

It appears to be an intriguing model for other countries. Partly in thanks to the reserve, local Amerindian communities collaborate on business initiatives. But sustainable development is costly. It requires investment in training, capacity building and proper extraction techniques.

Iwokrama’s small logging operation is trying to secure Forest Stewardship Council certification, which requires social and environmental measures that will put its lumber above the world market price. If it succeeds, Iwokrama will be the only FSC-compliant timber operation in Guyana. But there starts the challenge: finding buyers willing to pay extra for knowing where the wood came from.

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But there is another worry, one that goes to the heart of the mechanisms being contemplated in the battle against climate change.

In April of this year, the arrival of Swedish-British businessman Johan Eliasch in Georgetown triggered speculation about what was in store for Guyana’s rain forest. Owner of the sporting goods manufacturer Head, and an adviser to the U.K. Conservative Party on environmental issues, Mr. Eliasch turned heads in 2006 when he purchased 400,000 acres of Amazon rain forest in Brazil from a logging company.

The transaction, he insisted, was purely in the interests of conservation. But critics have pointed to Mr. Eliasch’s support for carbon-trading markets and suggested that he could stand to gain financially. According to Mr. Wheeler, the British High Commissioner, the talks between his office and the Guyanese government on avoided deforestation began shortly after Mr. Eliasch’s visit, including discussion of carbon markets.

There are questions, though, about the efficacy of using a market-based mechanism to reduce emissions. The system enables companies to gain credits when they reduce emissions or invest in green-technology projects. They can also buy credits from others. The credits can be used to gain leeway to exceed legal emissions limits in other operations. The system has high-profile supporters, including the World Bank and Conservation International.

The final Bali communiqué emphasized using the carbon market as a source of financing for avoided deforestation and alternative development. The fact that it does not require large investments by governments certainly makes it politically expedient.

“We have a problem that has been called the greatest market failure man has ever known, namely climate change, and the major solution being put forward to address this solution is a market solution,” says Daphne Wysham of the Institute for Policy Studies in Washington.

“The forest becomes a commodity you can buy and sell. It’s a market in hot air, an invisible gas that no one can completely ensure is doing what it’s supposed to be doing.”

While talk of putting forests on the carbon market is relatively new, Ms. Wysham has been tracking how the scheme is playing out in other areas. She says the markets are typically riddled with “perverse incentives” that encourage dirty industries to game the system.

Coal-fired plants in India, for example, earn credits for producing cinderblocks from its waste fly ash, because they are reducing emissions that would otherwise be created by firing clay bricks in a kiln. Credits are also earned from diverting the highly toxic fly ash from dumps. In this case the market only encourages the power plants to use more coal to make more cinderblock.

“People think of regulation and command-and-control as this bogeyman,” Ms. Wysham says. “But governments can be more efficient and more involved and more targeted than a free market in something like carbon.” There is also the matter of ownership—who really owns the land once it becomes a carbon sink on the market?

“You are effectively turning over property rights to the carbon buyers,” argues Wysham. “That means the indigenous people may not have outright property rights but live in the forest and have managed to protect it for some time. All of a sudden they could lose their rights to access.”

Mr. Corbin, the Guyanese opposition leader, says he has been approached in the past by British businessmen about his country’s willingness to put its rain forest on the carbon market. He doubts such schemes will help Guyana.

“I think that we would be more concerned about the bottom line of such programs,” he says. “Whether the people of Guyana and the country will derive some benefit from the lack of utilization of our forest resources. …Will the people of Guyana still suffer because the whole process has been subjected to the old market forces of trade? I’m very skeptical when it becomes just a matter of trading.

“The question of Guyana’s environment, global warming, and rising sea levels become secondary to people making money.”