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Ecuador: A Sustainable Development Model

Corinne Kisner

Ecuador's Yasuní region contains a vast, lush rainforest, teeming with flora and fauna, which prompted the Ecuadorian government to declare it a 982,000 hectare National Park in 1979 [i]. Jaguars, monkeys, and at least 630 bird species live in Yasuní, and a single hectare of this Amazonian land hosts as many tree species as exist in all of North America – reason enough for the United Nations Educational, Scientific and Cultural Organization (UNESCO) to declare Yasuní a biosphere reserve in 1989 [ii]. This biodiversity hotspot is also home to indigenous Waoraní, Quichua and Shuar peoples and their traditional cultures, which is why in 1999, part of Yasuní was designated an ‘Untouchable Zone,’ to provide refuge from oil drilling for indigenous people choosing to live in isolation [i].

Yet despite these overwhelming reasons to conserve and sustain this land, the billion barrels of crude oil in the Ishpingo-Tambococha-Tiputini (ITT) reserve beneath Yasuní provide strong temptations to ignore the existing protections and exploit the land by drilling for this valuable commodity.

However, against the norms of modern development that push nations to consume natural resources to escape poverty, Ecuador has taken a wildly different approach. In February 2007, President Rafael Correa called on the international community to pay Ecuador not to exploit the oil.

Under a business-as-usual development model, Ecuador would earn $720 million per year that oil is extracted. This number is substantial in a country where 60% of the population is poor and half of export revenues come from oil [iii]. The oil under Yasuní is 25% of all known reserves in Ecuador, so for Correa to suggest that Ecuador, which for a quarter century has based its entire economy on oil exports, leave this potential profit untouched, is a revolutionary proposal.

Correa understands, though, that oil has brought his country “more bad than good” [iii]. Drilling for the oil under Yasuní wouldn’t bring revenue to Ecuador for five years after the project began, and profits would cease five years later when the oil ran out. Historically, the “resource curse” of oil exploitation has failed to relieve Ecuadorians of poverty, instead causing watershed degradation, deforestation, and toxic pollution with grave health impacts to indigenous people. According to Pablo Fajardo, a lawyer for the Ecuadorian network Frente de Defensa de la Amazonia, “the population is being exposed to serious health hazards and illnesses related to oil spills and deliberate waste dumping while they often live in fear of companies, whose power is expressed through threats and violence. By using private armed forces, the companies try to control and stifle local resistance at any price” [i]. The short burst of revenue from oil does not justify the long-term environmental damage, devastating health effects, or human rights violations. Natural resource consumption has never been a sustainable method of poverty alleviation or development; Correa understands this, and would prefer the ground undrilled and the oil untouched.

There is a steep opportunity cost to protecting Yasuní, though, which is why Correa has asked the international community to pay Ecuador 50% of the foregone oil revenues, about $350 million annually for ten years [iv]. For years, industrialized nations have been asking poor countries to adopt low-carbon development plans as part of the global effort against climate change; Correa has promised to walk the walk – if rich nations will help.

According to Carlos Larrea, a professor at Quito’s Andina Simón Bolívar University and one of Ecuador’s leading economists, international environmental organizations would administer a compensation fund for Ecuador, and the interest would be used for national conservation and social development projects. Such a fund would “allow the state to obtain an indefinite resource flow for sustainable human development” [i], whereas oil extraction would provide only a short burst of profit. The quantifiable value of Ecuador’s contribution to the reduction of greenhouse gas emissions is much larger than the foregone profits from oil exploitation. The 436 million tons of avoided carbon dioxide emissions [v], when converted to carbon credits on the international market, financially justify the conservation of Yasuní. Additionally, the value of ecological services such as water purification and oxygen production performed by the rainforest make Correa’s request for compensation look modest. Protecting Yasuní, says Larrea, is “the only reasonable option for the future of a global society that aims to live in harmonious coexistence with nature” [i].

But will the international community step up and provide the funds? If they do, will Ecuador protect Yasuní forever? Many are skeptical, citing Ecuador’s history of political turmoil (Correa is the eighth president in a decade). However, many are optimistic, calling Correa’s proposal truly sustainable, and the first of its kind. The governments of Spain, Italy, Belgium and Norway have expressed interest in the ITT proposal, and organizations like the Wallace Global Fund have committed sums to the initiative. And on June 26, 2009, Germany’s Ministry for Economic Cooperation stated that they would pay $50 annually into a fund under the IADB or UN [vi].

This move by Germany is essential in creating momentum among the rich countries who have called on developing nations to curb deforestation, but who have not tangibly helped this goal. If more countries pledge funds, Ecuador’s ITT proposal may succeed in revolutionizing the way society values its natural and social resources. Protecting Yasuní would not only avoid carbon dioxide emissions and water pollution, but would allow Ecuador to invest in human capital and uphold human rights for indigenous peoples. Battling climate change would be economically linked with promoting a sustainable society. Ecuador’s bold proposal, and Germany’s strong response, are steps in the right direction towards integrating the preservation of forests into a new climate protection framework in Copenhagen.

Works Cited

[i] Baird, Vanessa. “Endgame in the Amazon,” New Internationalist.

[ii] Enström, Agneta. “Ecuador's Yasuni Park: Oil Exploration or Nature Protection?” CorpWatch. 20 March 2008.

[iii] Soto, Alonso. “Ecuador wants wealthy countries to pay it not to develop an oil deposit,” New York Times. 23 July 2007.

[iv] “Summary of the Proposal,” SOS Yasuní. 10 May 2007.

Baird, Vanessa. “Endgame in the Amazon,” New Internationalist.

[v] "Ecuador’s Yasuní-ITT Proposal,” Live Yasuní.

Baird, Vanessa. “Endgame in the Amazon,” New Internationalist.

[vi] “Ecuador Says Germany Backs Cash-For-Conservation in Amazon,” Latin American Herald Tribune.