Debate: Paying Ecuador to Leave Oil Underground?

Recently the Government of Ecuador and the United Nations signed a landmark legally binding deal to preserve the country’s oil rich Yasuni National Park.

As part of the pact, economically rich nations will pay this poor equatorial nation a sizeable US$3.6 billion to protect an area of staggering biological diversity. Yasuni, part of the Amazon, is home to several isolated (two of which are uncontacted) indigenous tribes, hundreds of native tree species and dozens of endangered fauna.

This means leaving around 846 million barrels of oil permanently underground in the Ishpingo-Tambococha-Tiputini (ITT) oilfields, avoiding the emission of over 400 million metric tonnes of CO2, according to the government’s Yasuni initiative website.

Compensating for potential resource income forfeited in order to reduce carbon emissions and protect biodiversity is an example of an emerging UN-promoted arrangement known as ‘payment for ecosystem services’.

A new development paradigm?

On September 7, charismatic Ecuadorian President Rafael Correa Delgado delivered the 17th U Thant Distinguished Lecture here at United Nations University in Tokyo. Correa spoke passionately about his country’s foray into a new paradigm of economic development.

“Development cannot be pursued in the way that it has been pursued in the past. Through neo-liberalism we were not able to achieve economic development. We need to have structures in place to achieve social justice and policies to distribute wealth equally.”

Central to Correa’s vision is what he calls the “democratisation of natural resources” like the Amazon, rather than their exploitation by multinational companies. In practice, this is reflected in the President’s obvious support to plaintiffs in the high-profile legal suit against Texaco (now owned by Chevron). This American oil giant is accused of destruction of the environment and indigenous communities’ livelihoods, as the award-winning documentary Crude: the Real Price of Oil illustrates.

“By not developing oil reserves in that area we can protect biodiversity and avoid reducing the carbon sink by 400 million tonnes. But the international community should compensate us economically for our decision,” Correa told the audience of diplomats and UN officials.

In the case of Yasuni, any money raised through payment for ecosystem services is to be stashed into a trust fund intended to protect Ecuador’s environment and reduce poverty amongst indigenous communities.

Conservation groups such as Amazon Watch have been calling for this approach for a long time and unsurprisingly welcome the Yasuni ITT Agreement. However the deal has attracted criticism from some community groups seeking increased participation and also those concerned that not enough compensation money can be raised.

[Of course what with yesterday’s breaking news about a violent police revolt, Ecuador’s political future may become somewhat cloudy, perhaps harming the Yasuni initiative’s chances of success?]

Nonetheless, in this week’s Debate 2.0 we ask you whether payment for ecosystem services is a good idea.

Could this initiative not be a test case for ways to bring about the end of the paradox known as the “resource curse”, where mineral and oil-rich developing countries stay poor, while the extraction lets foreign corporations get richer, fosters corruption, buoys up dictators and/or trashes the environment?

Or are schemes like this just another means of “commodifying nature”, as Bolivia’s Evo Morales recently stated?

If not through ecosystem services, how can poverty be reduced without destroying the environment?

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Debate 2.0: Paying Ecuador to leave oil underground? by Mark Notaras is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.



Mark Notaras was a writer/editor of Our World 2.0 for the United Nations University (UNU) Media Centre from 2009–2012. He is a former researcher in Peace and Security for the UNU Institute for Sustainability and Peace (UNU-ISP). He holds a Masters in International Affairs (Peace and Conflict Studies) from the Australian National University and the Peace Research Institute, Oslo (PRIO) and in 2013 completed a Rotary Peace Fellowship at Chulalongkorn University in Bangkok. Currently Mark works in Timor-Leste advising local NGOs on community agriculture and conflict prevention projects.

Join the Discussion

  • AlanZulch

    I believe payment for ecosystem services is a good idea given the circumstances.

    It is, to be sure, not an optimum solution (more on that below) but it is a step in the right direction in that it achieves two things: it maintains biodiversity while mitigating carbon emissions, and it increases people’s awareness, if incrementally, about the need to do so.

    The very concept and terminology of “ecosystem services” is based, however, on an obsolete assumption at the root of our unsustainable, endless-growth, consumption-based paradigm: By thinking of nature as providing humans a “service” it perpetuates the myth that we are separate from nature and that nature exists for our benefit. Both are patently false.

    With that false assumption in place, we have arrived at where we are: facing an ecological and civilizational abyss as the effects of this false worldview build toward a crash.

    So, establishing a payment system for ecosystem services can at best decrease the severity of the coming impact, but it doesn’t change our trajectory.

    Waking up to our authentic identity as being one with nature and each other, and living from that awareness, is the service that is truly called for at this time.

  • Thanks for the debate article, Mark.

    After visiting Borneo, I feel the major flaw in the scheme is the overlooked assumption that the money will get to the right people. Within carbon exchange programmes… brokers, international, national, regional, and local officials are already slicing off their share long before the local communities even dream about the benefits. There was a damning report published late last year in Mother Jones that raises some serious questions about a carbon scheme’s socio-economic impacts.

    I’m in agreement with Alan, seemingly it doesn’t change our trajectory.

    Also, Mark, what is the latest on the CBD’s debates regarding eco-system services VS eco-system rights?

  • Peter Robotham

    This seems like the typical western-liberal approach of revolution without a revolution. Now not only can we carry on enjoying our affluent lifestyles dependent on the exploitation of resources and production but we can do it feeling good about ourselves because in Equador we are protecting biological diversity. Basically we are buying our way out of our collective guilt.

  • marknotaras

    I agree there is a component of feeling of good about ourselves, if such initiatives take place. Honestly I see that as better than an alternative scenario where the Amazon is continually mowed under so we can enjoy the odd steak.

    Peter raises an interesting point because yet again we get to this question of whether an interim, less than desired approach is worth pursuing in the absence of a truly sustainable solution. Given the history of corporate and imperial exploitation in Latin America over the centuries, this seems to be a step in the right direction. Let’s hope this government gets the chance to pursue an alternative model of development which couldn’t be any worse than what has proceeded it ecologically or for some of the poorest communities on earth.

  • marknotaras

    Incidentally, the ruling on the Texaco/Chevron case is now in and the company has been fined $US8 billion by an Ecuadorian court.

  • Marc Figueras

    It now seems that the initiative has not been able to take off because ‘developed’ countries’ governments are not willing to provide the funds.

    This illustrates a sad reality. There are governments in the global South which are creative, innovative and have plenty of solutions to offer that would benefit both the developing and the developed countries. But governments of developed countries do not go very far beyond words. They are unwilling to pay for the conservation of the environment abroad, but they will pay whatever for foreign natural resources.

    Governments in developed countries should stop blaming malpractice and corruption in the developing world and start giving the example instead, simply by enacting their promises and declarations. For exampling, by funding an initiative like Yasuni-ITT.

    If they don’t, eventually whatever faith in their ‘ecological’ intentions is left will erode, and rightly so.

    Co-operation between states is essential, and this includes paying for externalities.