Yasuní-ITT: Chronicle of a Death Foretold?

by Kevin Koenig, Northern Amazon Program Coordinator

Ecuador's historic proposal to keep some 850 million barrels of crude that lay beneath the country's stunning Yasuní National Park hit a familiar roadblock last weekend, as President Rafael Correa undermined his own negotiating team, denounced foreign donors, and threatened to drill in the ITT oil block (named for the oil wells Ishpingo, Tambococha, Tiputini) in June.

The Yasuní-ITT initiative seeks international compensation to the tune of $350 million per year-half of its forgone oil revenues-to permanently keep the oil in the ground and thereby avoid deforestation and the emission of some 410 million tons of CO2 that would be eventually be released into the atmosphere if the oil was extracted and consumed.

In his weekly radio address January 9, Correa slammed the team led by Minister of Foreign Affairs Fander Falconi for accepting conditions that were "unacceptable" and "shameful." Correa called the effort a threat to the country's sovereignty, just as the team prepared to seal a deal for an international trust fund administered by the UN Development Program which would help provide donor countries with financial guarantees, given Ecuador's politically turbulent history. The deal was to be signed and announced at a government press conference at the COP15 climate negotiations in Copenhagen, Denmark last December. But due to internal conflicts, the announcement had been scuttled at the last minute.

"Let the northern countries keep their money," Correa declared, sending shock waves through Ecuador and the world, who had rallied around the proposal. This was not the first time Correa has auto-sabotaged the initiative's chances, though it may have been his last opportunity, as the proposal's credibility and donor confidence may be beyond repair.

Joan Martinez Alier, a professor at the Autonomous University of Barcelona, Spain, has been instrumental in the design of the proposal and a founder of its core principle of climate debt. "For President Correa, it wasn't enough to boycott the signing of the trust fund with UNDP from afar, he had to destroy the entire initiative," says Martinez Alier. "Maybe he felt cornered by the reality that finally the trust fund would be established, the environmentalists would win, the prospect of oil drilling snuffed out, so he undercut his own Minister and negotiating team, and questioned the integrity of the UNDP under the pretext that the terms of the agreement were 'shameful'."

Launched in 2007, the project is a bold proposal from a net oil exporter and OPEC member, seeking to keep its largest oil deposit-some 20% of its reserve-permanently underground. The initiative is the first of its kind, and a sea change from past administrations' drill-baby-drill policies that have destroyed much of the Amazon and saddled the country with close $14 billion in external debt. The initiative was based on the idea of "climate debt"- that countries in the North (Annex 1) bear a historic responsibility for global environmental problems like climate change due to their continued level of exorbitant resource consumption, and therefore owe a debt to developing countries in the global south who have differentiated, but shared responsibilities.

Yasuní National Park is a United Nations Biosphere Reserve and home to some of the planet's last Indigenous peoples living in voluntary isolation. Yasuní is comprised of more than 2.4 million acres of pristine primary tropical rainforest and boasts the highest concentration of floral and faunal species anywhere in the world. The park contains some 4,000-plant species, 173 species of mammals and 610 bird species, and almost as many tree species in 2.5 acres as found in all of North America. Yasuní also contains more than 100,000 insect species per hectare - the highest level of insect diversity in the world. In 1999, the Ecuadorean government designated 1.8 million acres of the Park as a "No Go Zone," prohibiting any type of resource extraction in perpetuity. The reserve is home to the Tagaeri and Taromenani, two nomadic clans of uncontacted Huaorani Indigenous people living in voluntary isolation.

But despite its unique vision, the project has been riddled by contradictions from the Ecuadorean government since its announcement in 2007. After the official launch of the proposal, Correa's explanation of the initiative led many around the world to believe it was a ransom, rather than an effort to save one of the world's most important places and a proposal for joint North-South cooperation in a country where oil accounts for 60 percent of its exports. The government's insistence on a 1-year deadline to raise close to $4.5 billion dollars, was also seen as an impossibility by potential donors and undercut the proposal's perceived viability. Financial and political guarantees were slow in coming, in part because there were three Foreign Affairs ministers in three years.

While the government made the case for using the funds to make a transition to cleaner, sustainable energy, among other national development priorities, Correa's administration instead approved drilling in an oil block next the ITT and inside Yasuní, and granted dozens of new mining concessions.

The project has also been questioned over the last few months for changing its financial compensation mechanism to include the potential use of carbon markets, and the controversial UNFCCC mitigation program REDD (Reducing Emissions from Deforestation and Degradation).

With each advance, Correa hobbled the initiative. Many wonder whether this was just his latest act of sabotage to an initiative that has insulated him from environmental groups' criticism, all the while laying the groundwork for drilling. Insiders point to factions within Correa's cabinet that did not want a deal to be signed, as well as last-minute pressure from Petroecuador and other interested oil companies.

Many contend that there has been an internal boycott of the initiative by Petroecuador since the initiative was first launched. Indeed, a recent article in the El Comercio newspaper contends that Petroecuador has been actively preparing drilling plans for months. At a press conference the day following his resignation, Falconi declared, "Evidently there are oil interests wanting to drill."

Since his last surprise announcement, the government has proclaimed anew that it is committed to the initiative, and that it will hire new staff. It has also backed away from his threat to begin drilling in June 2010. But in doing so, Correa has backed himself into a corner. Not only does this appear to be the nail in the coffin for the proposal, but the initiative itself has raised the profile of Yasuni's importance to a global level, which will make any drilling in ITT risky business for any company, and a political liability for President Correa.

Under Ecuador's constitution, no oil drilling is allowed in national parks, unless it is of 'national priority.' If a project is indeed deemed so, as the ITT block is, then a national consultation would have to be carried out. Correa himself said that if the proposal fails, he would call a referendum, asking Ecuador's public whether drilling should occur. He also offered to put his own position on the line to ask civil society whether he should continue as the Andean nation's president.

However, by their own choice, the Tagaeri and Taromenane don't have a vote, and no one should have the right to decide their fate for them. Unfortunately for both uncontacted groups and for the world, the fate of Ecuador's visionary solution to address climate change may have met its long foreseen end.

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