Via the Independent,

“A deal has been agreed that will place a financial value on rainforests – paying, for the first time, for their upkeep as “utilities” that provide vital services such as rainfall generation, carbon storage and climate regulation.

The agreement, to be announced tomorrow in New York, will secure the future of one million acres of pristine rainforest in Guyana, the first move of its kind, and will open the way for financial markets to play a key role in safeguarding the fate of the world’s forests. The initiative follows Guyana’s extraordinary offer, revealed in The Independent in November, to place its entire standing forest under the protection of a British-led international body in return for development aid.”

It is something that is persistently ignored: when when manufacturers produce goods and when we pay for their consumption, the production and consumption price tags never include the services that the biosphere provides, free of charge. We should pay for such services. If we had to pay for the full cost of our consumer goods (and that would include the services that our governments already provide), everything would cost much more. The only way we can sustain our levels of consumption with stagnating income is because the biosphere subsidizes us. Let’s us never forget that. Or, as Hylton Murray-Philipson, director of the London-based financiers Canopy Capital, who sealed the deal with the Iwokrama rainforest, said

“How can it be that Google’s services are worth billions but those from all the world’s rainforests amount to nothing?”

Indeed. There is finally global recognition that deforestation is the number 2 cause in global climate change and last year’s Bali conference issued a call to protect the world’s remaining rainforests. But why Guyana?

“Guyana, sandwiched between the Latin American giants Venezuela and Brazil, is home to fewer than amillion people but 80 per cent of its land is covered by an intact rainforest larger than England. The Guiana Shield is one of only four intact rainforests left on the planet and at its heart lies the Iwokrama reserve, gifted to the Commonwealth in 1989 as a laboratory for pioneering conservation projects. Iwokrama, which means “place of refuge” in the Makushi language, is home to some of the world’s most endangered species including jaguar, giant river otter, anaconda and giant anteater. Guyana’s President Bharrat Jagdeo, a former economist, has appealed for state and private sector help for the country to avoid succumbing to the rampant deforestation currently blighting Brazil and Indonesia, in an effort to raise living standards in one of Latin America’s poorest countries.”

In other words, he is resisting the pressure from multilateral institutions to exercise his country’s comparative advantage: privatize logging and let the market work its magic. Instead, he is invoking another comparative advantage: get paid for the services already provided by the rainforest. This is the Global Canopy Programme approach and it is worth expanding.

Cross-posted at The Global Sociology Blog