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Equilibrium Futures is a company registered in the United Kingdom with company number 10781169

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November 26, 2018

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EXXON and Guyana’s green economy - an equilibrium paradox

November 10, 2017

EXXON has recently discovered what is rumoured to be the world's 6th largest oil reserve, 132 miles off Guyana's coast. Now it is the big new game in town, in a country with a weak government and 80% of its rainforests intact. Guyana’s GDP was just US$3.5 billion in 2016. EXXON earned US$219 Bn in the same year.

 

 

 

I predict, the dilemmas facing Guyana will become a globally watched testing ground in reaching equilibrium between consumerism driven by financial capital, and respect for the forces of nature driven by natural capital.

 

Most People have never heard of Guyana. It is a country the size of the UK just south of Venezuela, a former swamp recovered by the Dutch.  The colony later became a British protectorate and the only English speaking country in South America.

 

Half of Guyana’s 750,000 mixed Black, Indian and Amerindian population live 1 meter below sea level on the coast. The rest live in scattered forest communities. 750,000 more live in North America and the UK, sending money back home that keeps the economy in this poor country alive.

 

A major sea wall protecting the country from flooding lies along the East coast. It has just been raised to stave off increasing floods, a symptom of climate change as glaciers and polar ice-caps melt, and storm surges ride over it, fuelled on sea level rise.  

 

Norway's promise of US$80 million to help deliver a hydro scheme for 95% renewable energy for the country, as part of its Low Carbon Development Strategy, has never arrived, and in the vacuum this has now been overtaken by the more tangible reality of US$ billion Sovereign Wealth Fund, built on oil royalties. For a very poor country - what choice do they have? 

 

This year is the 10th anniversary of my relationship with Guyana, through Global Canopy, an Oxford based environmental think tank I founded. I was invited to launch "World Science Day for Peace and Development" giving a key note address to reflect on these dilemmas, to a packed audience of Ministers, businesses, NGOs, other civil society organisations in Georgetown, the Capital of Guyana.

 

The Iwokrama Reserve, where much of my team’s work was carried out, is a huge1 million acre (371,000 ha.) rainforest, in the centre of the country. It will now become a barometer of Guyana’s state of equilibrium, between GDP and its own ‘gross destructive potential’.

 

I know because, 40 years ago I took part in the first major scientific survey of a largely unexplored part of northern Sarawak in Malaysia. It became the Gunung Mulu National Park. Then it comprised 200 square miles of pristine rainforest, indivisible from a larger ocean of rainforest stretching to the horizon - just like Iwokrama is today. Then oil, both fossil fuel and palm oil that is, was the economic boom. Naively, none of us believed Mulu could become an island, surrounded by a ruined ecosystem, dotted with hotels, golf courses and palm oil plantations - but it has. Could such a fate await Guyana’s forests?

 

The only major dirt road across Guyana drives right through Iwokrama. The UK Government plans to pay for 1/3 of it to be paved with tarmac. Brasil may do the rest, to ship soy grown on land where rainforests used to stand, to the US through Georgetown's deepwater port. The road will undoubtedly lead to increased deforestation through unplanned settlement, and possibly stimulate an agricultural boom.

 

“Natural Climate Solutions”, a report by the world’s largest NGO, The Nature Conservancy, states that 37% of what finance, business and governments need to do, to stay below a 2-degree temperature rise, can be provided by stopping deforestation, planting trees and transitioning to low carbon agriculture.  This year’s climate pumped super-hurricanes ravaging the Caribbean and the US, have delivered a reparations bill to Donald Trump's America exceeding US$1 trillion. Already two major re-insurers are rumoured to be facing bankruptcy.

 

The most cost effective way to dampen the ferocity of future hurricanes, is to keep forests standing because they provide global cooling on a grand scale and sequester a billion tonnes of CO2 out of the atmosphere each year - for free.

 

Iwokrama is facing financial difficulties, like so many conservation areas. It has now has accepted c. US$1.5 million over 5 years from EXXON, to help conserve its forests. Georgetown’s oil boom could be a positive turning point for Guyana’s economy, but not at the expense of launching rampant consumerism and agricultural expansion, that could burn down its rainforests, as has happened in so many other parts of the world. That would just stoke more super-hurricanes. Georgetown’s flood defences could be overcome due to massive storm surges and sea level rise. And not decades from now, because both such symptoms of climate change are already happening - everywhere.

 

Could 2017 become a turning point for EXXON, a consistent climate denier?

 

Their Board was delivered a mighty shockwave at their AGM this year, when 62% of their shareholders voted for full climate disclosure, against the advice of the EXXON Board. President Granger of Guyana is committed to developing his country into a fully green economy.  Matching Guyana's aspirations for a green economy, whilst at the same time courting EXXON's fossil fuel derived finance to deliver it, might seem an impossible paradox but my sense is, there is an astonishing opportunity here - to turn history on its head.

 

Photo by Eutah Mizushima on Unsplash

 

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