Fundamentals of Environmental Economics in the Caribbean: Policy Design and Applications with Case Studies for Guyana

The movement towards a green economy requires a paradigm shift in how the concept of sustainability is designed within the policy framework of the economy. Whereas the traditional notion of economic development hinged upon the expansion of the productive capacity of a country as measured by Gross Domestic Product (GDP) moving towards a green economy now requires a development trajectory that accounts for the economic tradeoff of nature within the production and consumption of goods and services. The value of nature and the respective ecosystem services it provides as a benefit to society needs to be captured in the design and implementation of policies to correct market inefficiencies. This chapter explores the fundamentals of how to value nature and how these values are used in cost–benefit frameworks for policy appraisals and project feasibility. Relevant examples are expounded upon within Guyana including the payment for ecosystem services structures the country has engaged in including the REDD+ Programme and the potential carbon credit markets. Using these examples, key environmental valuation techniques are outlined and potential recommendations for environmental valuation work within Guyana are explained.