By Laura Peterson.
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 María 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.
Oil is Ecuador's leading export and accounts for about 25 percent of its gross domestic product. Instead of 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.