13. EMISSIONS: Ecuador launches international offset program (08/04/2010) Laura Petersen, E&E reporter
While prospects for an international climate agreement this year dwindle, Ecuador is proposing its own solution to help the developed world offset its carbon footprint: pay the South American country $3.6 billion to keep 20 percent of its oil reserves in the ground. Ecuadorean government officials signed an agreement yesterday establishing a trust fund for the Yasuni-ITT Initiative that the United Nations Development Program will administer. Donors will receive certificates that guarantee 850 million barrels of oil will not be extracted from pristine tropical forest. "We don't want to be an oil-exporting country forever and ever," said MarĂa Fernanda Espinosa, Ecuador's minister of patrimony. "We really want to be a service economy, a low-environmental-impact economy, and a bio-knowledge society based on our huge biodiversity." Several European countries, including Germany and Spain, have indicated they will participate but needed a secure donation structure, Fernanda Espinosa said. The trust fund and guarantee certificates create the financial mechanism to implement the initiative, which was first proposed by President Rafael Correa in 2007. Environmental groups that campaigned for the initiative applauded its implementation. "It is a pioneering proposal, a historic proposal for a country like Ecuador that has been so dependent on oil extraction," said Kevin Koenig, the Ecuador program coordinator for Amazon Watch, a San Francisco-based nonprofit. Oil is Ecuador's leading export and accounts for about 25 percent of its A map of the Yasuni National Park and the Ishpingo-Tambococha-Tiputini (ITT) oil block that Ecuador is proposing to not drill in exchange for $3.6 gross domestic product. Instead of billion from international donors. Map courtesy of Finding Species. relying so heavily on oil, the government is trying to generate revenue through carbon offsets. Not drilling the Ishpingo-Tambococha-Tiputini (ITT) oil block would keep 407 million tons of carbon dioxide out of the atmosphere.
The oil and carbon offsets are valued at $7 billion. Ecuador is asking the international community to compensate it for half of that -- $3.6 billion, over 13 years. The government is expecting to raise $100 million the first year, Fernanda Espinosa said. The money will be used to improve the nation's protected area system; reforest degraded habitat; and invest in renewable energy, science and technology and social development programs. The proposal would also preserve 750,000 acres of the Yasuni National Park in the northeast region of the equatorial country. The park is designated as a biosphere reserve through the U.N. Educational, Scientific and Cultural Organization (UNESCO), with extremely diverse plants and animals. Scientists have counted more species of trees in 2.5 acres of the park than in all of North America. The park is also home to three indigenous tribes, including two that live in voluntary isolation. There is oil drilling in other parts of the Yasuni park, but the ITT block is untouched. Many were skeptical the agreement would go through after three years of volatile negotiations. In December, Correa had abruptly withdrawn his support for the initiative before it was to be signed at the Copenhagen, Denmark, climate summit, criticizing the negotiating team for relinquishing too much control to outsiders. The negotiating team quit in protest. "There were no previous examples," Fernanda Espinosa said. "That is why it took us several months to come up with a mechanism that would provide, on one hand, security to the contributors, and on the other hand, could reflect the priorities and domestic legislation of Ecuador."
Long-term effectiveness? Concerns remain about how effective the initiative will be in the long run Oil is already being extracted from other parts of the Yasuni National but the Yasuni-ITT Initiative would prevent extraction from a large when logging, drilling, mining and Park, untouched part of the park. Photo courtesy of Finding Species. roads continue to spread throughout other parts of the country. And, the government has the option to change its mind and drill the ITT block -- the guarantee certificates state if that happens, all donations must be returned with interest. "We've seen Correa expanding oil and mining in other parts of the Amazon," Koenig said. "That seems to be at odds with the proposal." The initiative could become a model for other tropical, oil-rich countries, but only if Ecuador follows through on funding renewable energy, social development and habitat preservation, said Marlon Flores, a senior adviser at the Ecologic Institute, a nonpartisan environmental policy think tank with offices in Europe and Washington, D.C.
"Those are complex goals," Flores said, who specializes in environmental financing policy. "Both contributors and potential contributors will be really looking at how the Ecuadorian government handles the implementation of the program -- that will be critical for the success or failure of the initiative." No matter what happens, local environmental groups are calling the Yasuni-ITT Initiative a resounding success because it has dramatically increased awareness about the park and the need to find economic alternatives to oil. "People are talking about what they can do for the environment here in Ecuador, that in the past never happened," said Veronica Quitig端i単a, a political and international relations analyst for Finding Species, a Quito-based nonprofit. "It's very good for the conservation, not just Yasuni, but for all the other natural areas in Ecuador."