Published on January 15th, 2010 | by Susan Kraemer1
Donors to Pay Ecuador to Keep Oil Underground
Here’s a novel use of Trust Funds. Ecuador is pioneering the use of a fund to preserve Ecuador’s rain forest and habitat for indigenous people and unique plants and animals in the Yasuni National Park, by permanently foregoing extraction of fossil fuels from the park.
In return, the Ecuadorian government has asked for compensation of $350 million a year for 10 years: half the expected return from the nearly one billion barrel oil field under the park.
The fund will be able to accept a wide variety of donations; private donations from individuals and environmental groups, public sector donations, debt swaps and carbon bonds, as well as direct investment in specific government development projects.
There’s an estimated 850 million barrels of crude oil in the ground beneath the 9,820 square kilometre Yasuni National Park. Leaving it in the ground would prevent the release of 407 million metric tonnes of carbon dioxide and would also protect the indigenous peoples and unique plants and animals that inhabit the park.
The multi-donor group is to be led by Helen Clarke; the former Prime Minister of New Zealand, who is now the administrator of the UN Development Program.
Ecuador’s Foreign Minister Fander Falconi and Minister of Natural and Cultural Heritage Marie Ferdinand Espinosa announced the selection of the UN Development Program based on their record of efficient, transparent and accountable administration of over 30 multi-donor trust funds in over 70 countries.
There have been many international offers of support. Spain has contributed $4 million. Germany approved the initiative and committed the government and Chancellor Angela Merkel to financial and political support. But, even with many offers of support, some initial deadlines for down payments have not been met.
The fund would need to generate $350 million a year for ten years, which is half the value of the extracted oil in the ten year expected life of the oil field. Ecuador hopes that it would lead to the permanent protection of what is really the lifeblood of the Amazon.
In return, Ecuador would permanently maintain its crude oil, estimated at one billion barrels of heavy crude reserves, underground.
The Yasuni project would be a world first: putting social and environmental values ahead of oil extraction; thus preventing the emission of greenhouse gases that are causing worldwide climate change.
If you’d like to help, here’s how to volunteer with the UN Development Program. Regardless; if word of the project gets out, the support will follow. The UN website could use some volunteer help in adding the story, for starters.