Many indigenous people travel hours by foot to hear explanation of novel strategy on the environment

By Ellie Stewart and Amina Tirana

Special to the Gazette

Deep in the remote jungles of northeastern Nicaragua, Theodore Panayotou, director of the International Environment Program at the Harvard Institute for International Development (HIID), was momentarily taken aback when Nicaraguan President Arnoldo Alemán asked him to explain the complicated and somewhat abstract notion of "carbon offset markets" to the 700 Mayagna indians gathered in a roughwood schoolhouse in the village of Musawás.

For more than three hours, the Mayagna leaders raised issues pressing to their daily lives, and yet among the most contentious in Nicaragua. They included property rights, construction of a road to the central village, more schools and teachers, and a community church. How then did carbon offset markets, recently brought to global attention through the Kyoto Accords on the environment in December 1997, figure into the lives of these Mayagna indigenous people?

To Panayotou, an environmental economist specializing in sustainable use of natural resources, the connection between the Kyoto Accords negotiated by world leaders in Japan and the Mayagna living in the Nicaraguan jungles was clear.

With 20 years of experience working with developing nations worldwide, he sees the need for industrial countries to find a cost-effective way to mitigate greenhouse gases as the perfect complement for the development needs of indigenous people and small farming communities worldwide. Through a chain of translation from English to Spanish to Mayagna, Panayotou explained to the Mayagna that, "for years you have been told by outsiders that preserving the forests was not economic compared to logging them or converting them to cattle farms. This may have been true in some narrow sense, but today, thanks to some emerging opportunities to sell environmental services -- including carbon offsets -- to the global community, preserving the forests is not only sustainable, it is economically profitable for both you and the world."

In mid-December, President Alemán invited Panayotou to see firsthand the large tropical jungle areas of eastern Nicaragua, including the Bosawas Reserve (at 750,000 hectares, the largest tract of primary tropical forest in Central America), and the creeping threats from encroachment, logging of rare wood, development, and other unchecked depletion of natural resources. The Reserve stretches across Jinotega Province and the Autonomous Region of the North Atlantic (RAAN) on Nicaragua's northern border with Honduras. While large in geographic area, its population is sparse and isolated in the dense jungle. The 20,000 inhabitants of the area are largely from several indigenous groups, mostly the Mayagna and the Miskito.

Last month, the United Nations Educational, Scientific and Cultural Organization (UNESCO) declared Bosawas a Biosphere Reserve through its Man and the Biosphere Program. Adding it to 352 other sites in the "World Network of Biosphere Reserves" made Nicaragua eligible to receive resources for conservation and preservation of the Bosawas Reserve. At the same time, however, Nicaragua must determine ways to stop illegal activities in the area.

Nicaragua, like the rest of Central America and many other developing nations with large expanses of forest land, is also examining ways to benefit economically through preservation of its ecological systems and areas, including shifts to more environmentally and economically sustainable practices in agriculture and manufacturing, and ecotourism. In Panayotou's view, concurred by Roberto Stadthagen, Minister of the Environment of Nicaragua, the carbon offset market is an enormous opportunity for the people of communities like Musawás, as well as Nicaragua as a whole. Large-scale logging threatens traditional livelihoods and customs, and worsens fragile ecological conditions, leaving land stripped and unproductive and contributing to erosion. With the adoption of proper policies, carbon offset markets could make it more profitable to maintain the forests than to fell them.

Panayotou is working with the government of Nicaragua, as well as those of Costa Rica, El Salvador, Guatemala, and Honduras to identify these means and to establish appropriate policy on carbon markets and other environmental opportunities. His work comes as part of the Central America Project at HIID, a multidimensional and institutional effort. Formally titled Central America in the 21st Century: A Strategy for International Competitiveness and Sustainable Development, the three-year project aims to provide clear policy analysis and recommendations to the five above-mentioned nations in achieving greater international competitiveness and sustainable development. Directed by Jeffrey Sachs, director of HIID and the Galen L. Stone Professor of International Trade, and conducted in collaboration with the Central American business school INCAE and the Central American Bank for Economic Integration (BCIE), the project examines four interdependent policy dimensions: macroeconomy, competitiveness, environment, and governance, including the judiciary.

Carbon offset markets are a critical current theme in sustainable development, involving conservation of forest in exchange for easing the burden on carbon-emitting industry worldwide. The idea behind these markets is that industries that emit large amounts of carbon (in the form of CO2) into the atmosphere, contributing to the greenhouse effect, can pay to protect forest lands in other areas of the world. Through photosynthesis, forests absorb CO2, in effect balancing emissions from the industry.

For nations with large forest regimes and unproductive agricultural areas, this new market can constitute a significant source of income and investment funds. According to Panayotou, "Central America stands to earn $500 million per year through this trade, income that is not being reaped at the moment." Two days before the visit to Musawás, Panayotou gave the keynote speech at a regional conference on the development of carbon offset markets and regulation mechanisms in Costa Rica sponsored by INCAE, HIID, and BCIE as part of the Central America Project. He predicted that the industrialized countries would seek to meet as much as half their CO2 emissions reduction commitments through purchases of offsets from developing countries.

At present, no roads reach Musawás. This isolates the villagers from markets and urban areas, but also protects their communities and culture -- and the Reserve-- from illegal logging and encroachment. Because of the isolation, the presidential party viewed the forests, encroached areas, and clear-cut slopes from Russian-built helicopters, vestiges of Nicaragua's lengthy and brutal civil war. Due to the unprecedented nature of a presidential visit, many Mayagna had traveled by foot for several hours earlier that morning from outlying villages to greet the president in person and to take part in this historic meeting. The meeting was an attempt by President Alemán and the Mayagna leaders to resolve critical issues in the area, such as indigenous land rights.

Also visiting Musawás were Marco Boscolo, HIID development associate, and Rob Faris (who work with Panayotou on carbon offset markets and deforestation issues in Nicaragua and the region as part of the Central America Project), Minister Stadthagen, Ministry of the Presidency Eduardo Montealegre, many other officials, and the German Ambassador. The last announced a gift of 5 million Deutschmark (about U.S. $2.73 million) to the Mayagna community, in a continuing program of support to communities in environment conservation areas throughout Central America.