Ecuador and the Amazon’s $3.6b decent proposal
Protests outside the presidential house in Ecuador against oil exploration in the Amazon
Weeks before the latest Intergovernmental Panel on Climate Change report came out, confirming a 95% chance of a 2 degrees+ rise, within the century, an innovative scheme to try and alleviate some of the damage quietly bit the dust.
In 2007, President Rafael Correa of Ecuador faced a dilemma. Increasingly sophisticated oil exploration had identified large reserves within the country’s eastern sector, in the Yunasi region. For the third poorest country in South America, with a per capita income of $5000 (50% of the global average, about 15% of the OECD average) this was a potential boon.
The problem was that the oil reserves were in the country’s rainforests, an extension of the vast Amazonian rainforests, that mainly lie in Brazil. Brazil’s share have been devastated by ranching; Ecuador’s are substantially undamaged, because of the country’s underdevelopment. The Yasuni has one of the highest most diverse biospheres in the world, with more tree species than the whole of North America, more bird species than the whole of Australia, and insect species which may number in the hundreds of thousands.
As with most of the continent’s leftist governments, Correa’s outfit is green as well as red, seeing the global ecological crisis as an expression of capitalism.
The answer they came up with was to offer the world a buy-out. For $3.6 billion, paid as a form of Amazon bonds, Ecuador would simply leave the oil in the ground, and use the money paid to fund the development that the oil would otherwise have released.
Paying people not to do something is hardly a new thing; for decades Australia maintained wool and wheat prices by paying farmers to scale down their yield. The idea of limiting polluting production in this way has been around for decades, and the United Nations revived it in concert with Ecuador. To allay concerns about billions being paid into a state account, it was decided that the UN would administer the bonds. The money requested amounted to only 50% of the oil’s total value.
So the world lined up to pay the 0.005% of global GDP to save a chunk of the planet’s lungs, right? Wrong. Aside from a $50 million pitch-in by Germany, and another $50 million from various sources, and commitments by the rest of the developed world could manage only a few promises to kick some money in if all the others did. In August, Correa ostensibly abandoned the plan. Timetabled to gather the money over a 13-year period, from the 2007 inauguration to 2020, only $330 million had been pledged, and only $13 million actually delivered. Correa denounced the developed countries of the world as “hypocrites”, emitting the bulk of greenhouse emissions, but asking the developing world to bear the cost, and forgo improvement in living standards.
Some say that Correa’s move is a bluff — a desperate attempt to focus attention on the issue. But he seems deadly serious — barking back against a grassroots movement in Ecuador, which has insisted that the plan be followed through with, and which is currently gathering signatures for a petition to try and force the issue to a referendum. Correa has responded to this threat from his (green) Left by arguing that poverty does more environmental damage than oil drilling. Only 1% of the Yasuni is to be drilled, but this will eventually release 400 million barrels into the world.
“Countries like Ecuador are supposed to stay at a semi-developed level, as a touchstone of the natural world we have left behind.”
So why did the scheme attract so little support? Much of it was simply political. Though the actual moneys were to be held in UN trusts, Correa said that Ecuador would decide how they were spent. That, it is said, worried western donors, especially the US who see the South American leftist nations as enemies, more oriented to Russia and China, and unrespecting of the US’s implicit claim to dominance over the hemisphere.
But the crucial culprit appears to be, surprise, Germany, whose capacity to screw things up seems unrivalled.
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