A historic move in the battle to save tropical rainforests

This week a further historic step is taken in the battle to hang on the world's remaining tropical rainforests. It is unlikely to make too many headlines, but on Friday two countries will take forward the kind of arrangement that many have talked about but few have had the boldness to actually do.

Guyana and Norway's leadership is seen in the second stage of a ground-breaking deal through which one (Norway) makes annual payments to the other (Guyana) to keep its forests. The amount of money to change hands is calculated on the basis of how well Guyana has done in holding back deforestation, and the value of that in terms of avoided carbon dioxide emissions. A complex calculation is made to determine how well the recipient country has done but this year $40m is being transferred.

Guyana spends the money paid by Norway - a total of $250m spread over a period of years - on projects that will help with environmentally sound development, for example through funding solar panels on all the houses belonging to the indigenous people. In remote rainforests these are no fashion accessories. They are the means for children to read books at night and mark the end of the kerosene lamps and candles which cause indoor air pollution and fire hazards.

There is also money to connect remote settlements to the internet, again powered with solar electricity. There is money to pay for the costly job of legally demarking Amerindian lands and there are plans for health, education and business support. The overall strategy is geared to keeping the forest intact, and thus the priceless services they provide for the entire world. Any rational economic calculation must conclude the world is getting the bargain of the century.

Without this kind of support from Norway, the pressures on the forests might become irresistible. Guyana is poor. The country needs jobs, foreign exchange and tax revenues. And there are plenty of takers for the natural resources that await plunder in delivering these benefits. Since Brazil has cracked down on deforestation, the loggers, ranchers and soya farmers there have been looking for other places to expand their industries. Guyana is next door, connected by a new road and a prime target. I wrote about this in 2009, but fortunately there has so far been no major incursion. Part of the reason is because Guyana's President Jagdeo has been able to hold the line politically, in part because Norway has delivered money on a different basis.

But even with the best will, Guyana needs to undertake some forest clearance. There are plans for a new hydropower dam that will flood 45 square kilometres of forest. It will lead to the loss of 0.05% of the country's forest and is by any standard a major project. There has also been forest loss to gold mining. In the last year forest clearance has nearly tripled, mainly because of an expansion of this industry, from about 40 square kilometres to about 110. It is important, however, to put this change into the context of a tiny original deforestation rate – at six hundredths of 1% per annum, Guyana's present rate of forest loss is about 95% below the global average. With forest nearly the size of England and Scotland combined, the total loss from the dam and mining will lead to the equivalent of 10% of Norfolk being deforested. And the very fact that we know this is a major step forward. Both the low deforestation rate and the rapid rate of change were revealed by satellite monitoring funded from the first tranche of Norwegian money paid last year.

Guyana has sent a signal – and it is being heard. One consequence is seen in the fact that land-hungry natural resource companies looking for space in which to expand agriculture and logging are heading toward neighbouring Surinam. That country has no such deal with Norway, or anyone else for that matter, and unfortunately business as usual prevails there.

History is being made; and not just history in human affairs. It is about the history of life on Earth and whether we will find the means to co-operate in arresting the destruction of our planet's verdant lifebelt of tropical rainforests.

Originally published by The Guardian.