Guyana’s positioning in climate change policy has become more complex as it ramps up its oil production

DEAREDITOR,

In my latest article, I rehashed a selection of themes addressed during 2022. Regular readers and energysectorobserversmay havenoticedtheomissionof local content, education, ESG criteria, Guyana’s political stability and positioning on climate action, since becoming a major oil producer and, action Guyana can take to avoid the resource curse. This, my final article for the year, will review these outstandingissues.

The Local Content Policy (LCP) and its upcoming legislation were the focus of attention at the end of 2021 into the first quarterof2022.Educationis to local content as sowing is to reaping so at that time I decided to focus on education, writing: “A solid foundation at the primary school level leads to improvementinperformance through to secondary and tertiary education which feeds into the availability of professionals to provide the technical goods and services required by the energy sector.”

“Guyana needs to aggressively pursue a vastly improved quality of education for the majority of Guyanese children in the primary and secondary school system right now Enhancements of tertiary education institutions alone willnotsuffice.”

Inreferencetotheenergy sector specifically, I agreed with statements made by Prof Cardinal Warde, Executive Director of the Caribbean Science Foundation, during the third episode of Transforming Guyana series stating: “STEM education can become the means to achieving sustainable socioeconomic development for Guyana through technologybasedentrepreneurship.”

“Rapid growth is needed in STEM companies working in Guyana to provide real opportunities that translate technical expertise into otherindustries.”

I also added, noted that education, on its own, is not enough: “Education may be the passport but it cannot also be the aircraft, fuel and engine all at the same time. The impact of STEM education is intricately linked to policies, legislature and spending in other sectors such as business and banking.”

Without supporting policies and action, those educated in STEM will continue to leave their homeland as documented in “The Guyanese Diaspora” report published in 2020 by the Center for Strategic International Studies

“Almost 90 percent of Guyanese nationals with a tertiary-level education and 40 percent of those with a secondary education emigrated from Guyana b e t w e e n 1 9 6 5 a n d 2000 Based on these statistics, Guyana is thought to have one of the highest levels of “brain drain” of anycountryonEarth.”

Petrodollarswillbespent on a range of projects but where can they be strategicallyinvested?Apart fromspendingonimmediate developmental needs infrastructure, health care andeducation—investment isneededinareassuchasthe manufacturing sector and electricity systems that can, in turn, generate or support the generation of revenue. This is how countries avoid the resource curse: “Investment in a robust manufacturing sector can shift Guyana away from exporting its raw materials, towards creating more value-added products. As a natural consequence, there can be an accompanying increase in the value of exports, reduced demand for importing those products andincreasedemployment.”

“ G u y a n a ’ s manufacturing sector will be able to boast of producing products using cleaner and green energy with a mix of naturalgas,hydropowerand solarpower.”

“Guyana’s power sector mustmeetthedemandforthe shift from centralized systems of thermal power plants The inclusion of offshore natural gas bolsters Guyana’s energy security by providing cleaner energy for the growing domestic and industrial power demand. Additionally, there will be a more attractive environment for investment with lower energy cost and greater reliabilityofsupply.”

Shifting to external factors that affect Guyana’s progress, imagine that Guyanaretaineditsabundant resources and completely resolved governance, labour forcecapabilityandcapacity challenges by 2030. Is that enoughtoensuresuccessand prosperityforallGuyanese? Unfortunately, resolving those issues will not be enough. The response of foreigninvestorsandclimate change also need to be consideredandnavigated.

InJune,Iidentifiedsome additional “fire clubs” that thecountrywillfacestarting with the Environmental, Social and Governance (ESG)Criteria: “ESG criteria are a set of standards used by socially consciousinvestorstoscreen potential projects for investment. These standards influence the allocation of funds and management of operations. In short, fossil fuel production and development in Guyana may be a stumbling block to environmentally conscious investors — this cannot be completelyignored.”

“Meeting ESG standards adds complexity to the energy transition These challengescallfor

(Continuedonpage5)