Politics, Business & Culture in the Americas

Ecuador’s Yasuní-ITT Initiative: The Fate of One of the World’s Most Biodiverse Regions

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Deep in the northeastern part of the Ecuadorian Amazon is the Yasuní National Park, a 2.4-million acre reserve believed by scientists to be the most biodiverse place on Earth. Its location, where the equatorial divide meets the Andes and the Amazon rainforest, has made Yasuní one of the world’s most unique habitats for life. The park is also home to two of the planet’s last uncontacted tribes.

Yet beneath all that diversity lays an estimated 846 million barrels of oil, which the Ecuadorian government plans to extract. Earlier this month, President Rafael Correa abandoned the novel Yasuní-ITT initiative, which was launched in 2007 to keep the oil underground. The initiative sought to raise $3.6 billion in contributions from international donors—half of the estimated $7.2 billion Ecuador would face in lost revenue over time.[i] Hailed as a breakthrough in the global fight against climate change, the plan would have prevented 400 million tons of carbon dioxide from being released into the atmosphere. But the initiative raised only $13 million in actual donations and $116 million in pledges.

Addressing the country, Correa said the world had “failed” Ecuador. But despite the country’s real need for financial resources, Correa shares a significant portion of the blame. The government’s inflexibility and lack of transparency over how to administer Yasuní-ITT’s funds discouraged potential donors. Similarly, his efforts to attract investment and expand the country’s oil sector invited their mistrust.Early on, Germany and others announced combined donations mounting to nearly 50 percent of the desired goal on the condition that Yasuní-ITT funds be managed by a third party, with their input. Correa emphatically refused, relying on popular arguments over the need to defend Ecuadorian sovereignty. This refusal led many prominent Ecuadorian environmentalists in charge of the initiative to resign, citing its lack of credibility.

Although Correa eventually accepted that funds be managed jointly by the United Nations Development Programme and Ecuador, distrust over the government’s intentions had already spread internationally. A recent Wikileaks report, for example, revealed American suspicions over Correa’s intentions. According to a June 2007 cable from the U.S. Department of State, Linda Jewel, the U.S. Ambassador to Ecuador at the time, wrote that the same day Yasuní-ITT was announced, representatives from Petroecuador (the nation’s state-owned oil company) applied for U.S. visas to meet with American investors interested in exploring the Ishpingo, Tambococha y Tiputini (ITT) oil blocks within Yasuní.

By 2009, the Ecuadorian press had uncovered an official plan known as “Plan B” to exploit the ITT oil blocks. According to the Guardian newspaper, the infrastructure for oil extraction in Yasuní was being constructed long before the initiative failed. Forty percent of the park is already divided into oil concessions, and a road to an oil block adjacent to ITT is currently being built.

Such skepticism was further aggravated by a general reversal in Correa’s actions when it comes to the environment. On one hand, Correa was once hailed as Ecuador’s first conservationist president. He introduced environmental protection clauses into the country’s constitution as part of the concept of “buen vivir,” or “good living,” which rests on principles of sustainable and inclusive development. At the same time, Correa has prioritized investments in the oil sector and mega-mining, often overriding the very clauses he introduced. Once loyal supporters, environmental and Indigenous groups are now some of Correa’s most vocal opponents.

A closer look at the Ecuadorian government’s priorities over the past years reveals that the fate of the Yasuní-ITT initiative was tenuous at best. In 2009, Correa officially launched plans to construct the Refineria del Pacifico, an oil refinery partially financed by China and Venezuela, which would require 100,000 barrels of oil a day from Yasuní-ITT. The three oil blocks represent 20 percent of Ecuador’s proven oil reserves. What’s more, Ecuador continues to secure loans from the Chinese government in exchange for future oil production. Ecuador has borrowed more than $9 billion from China since 2009.

The government has said that with modern technology the environmental impacts of oil extraction within the ITT blocks will be minimal and that oil revenues will go to poverty eradication efforts in Ecuador. But many, including Roque Sevilla, the former president of the Yasuní-ITT commission, disagree, arguing that the damage to the park and to the Indigenous tribes living within it will be catastrophic and irreversible. Yasuní’s fate now rests on the 70 percent of Ecuadorians who support keeping the oil underground. Hundreds have taken to the streets calling for a national referendum to reverse the decision, but, in Correa, they face an unyielding and powerful opponent.

[i] This amount has grown to $18 billion according to the government’s most recent estimates based on current oil prices.

Tags: Ecuador, Rafael Correa, Yasuni
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