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Last Updated: Friday, 21 September 2007, 12:47 GMT 13:47 UK
Ecuador seeks oil 'compensation'
By Daniel Gordon
BBC News

Child puts coin in piggy bank held by Ecuador President Rafael Correa
President Correa is hoping for lots more money for his project

The Yasuni National Park in Ecuador is reckoned to be one of the most biodiverse regions on the planet. Beneath it, though, lie an estimated one billion barrels of oil.

The Ecuadorean government has begun negotiating with oil companies interested in bringing that oil to the surface, although President Rafael Correa says his preferred option would be to leave the reserves untouched.

Earlier this year, Mr Correa announced a one-year moratorium on oil exploration in the area and launched a plan aimed at safeguarding the Yasuni park, which covers some 9,820 sq km (3,791 sq miles) in the country's Amazon rainforest region.

Under the proposal, Mr Correa is asking for foreign donations worth $350m (175m) in exchange for a promise not to exploit the Yasuni reserves, but how feasible an idea is it?

One of the people responsible for developing the proposal is Carlos Larrea, a professor at the Andean University in Quito, who says it is an entirely original approach to tackling climate change.

"We are presenting a new way to prevent global warming. Instead of trading with produced emissions - as under the Kyoto protocol - we are proposing to avoid production, by keeping the oil in the ground," he told the BBC.

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Professor Larrea's role has been to provide technical advice to the group that first put forward the idea, the environmental group Accion Ecologica.

The group says the $350m could be reached by writing off some of Ecuador's national debt and increasing international aid, as well as through donations by private individuals.

The target figure is estimated to be half what the oilfield would bring each year in if it was developed.

The suggestion has been favourably received in several quarters:

  • Germany says it is taking the idea seriously
  • Norway is to send a delegation to Ecuador in the next few months
  • The World Bank is consulting with other international organisations
  • Italy's parliament is about to vote on whether to give official approval to the project

Paolo Cacciari, one of the Italian MPs in favour, says the motion before parliament already has the support of more than 50 of his colleagues from both left and right.

None of them appears worried by the idea of reducing potential global oil supplies in this way.

"We've extracted more oil than we were ever meant to," he says.

"We have an ecological debt to pay back, and this suggestion by Ecuador is an intelligent solution. It's the responsibility of all of us to look after these reserves."

So far though, there has been no firm commitment towards the funding.

'Precedent'

Robert Hofstede, based in Quito for the World Conservation Union, approves of the idea in principle but he has reservations.

"The questions I have are what will be done with this money? The government's proposals are very broad. Also, can the government guarantee to any interested party that the petrol will stay in the ground for eternity - or at least for more than two or three governmental cycles."

Species of frog found in Yasuni. Photo by Finding Species, courtesy sosyasuni.org
The Yasuni park is home to many species
Mr Hofstede also notes that Ecuador has been criticised in other South American countries for even considering oil exploration in a designated UN biosphere reserve.

"They never touched their petrol resources within protected areas. But Ecuador did some drilling very close to their protected reserves. And now they see Ecuador asking for money to stop doing something they never should have done in the first place."

If the scheme can be made to work, though, he thinks other countries will follow with similar projects.

"Everyone will be watching what's happening with Ecuador to see if this creates a precedent so that they might afterwards go to the same donor countries and say they want to do the same."

Popular message

For decades, foreign companies have made large profits working the oil fields of Ecuador, something resented both by the indigenous people and by Ecuador's own energy industry.

In his successful election campaign last year, President Correa tapped into that resentment.

He promised to defend the rights of indigenous peoples and to run a green administration, free from ties to multinational energy companies. His message was popular many Ecuadoreans.

But soon the president will have to decide which camp to align himself with.

Huaorani indigenous people. Photo by Eduardo Quintana, courtesy sosyasuni.org
The area is home to indigenous people like the Huaorani
Regional oil industry analyst Roger Tissot thinks that those in favour of development, rather than conservation, will ultimately win.

"In the big scheme of things, he's most likely to align himself with the pro-development group. The other groups will be weakened and not be able to stop a future development of those fields."

Mr Tissot says he also expects the appeal for funds to fall short of its target, allowing Mr Correa to argue: "I've tried the environmental option, but it didn't work."

Mr Tissot told the BBC: "This was a good political strategy, to force the environmental groups to put their money where their mouth is.

"And if that doesn't happen, it'll force the indigenous communities to face reality and see that they need the oil money."

Mr Hofstede thinks the government must make its commitment to the preservation of the Yasuni park much clearer.

That way, he says, the detractors who see this as a political stunt will be silenced.

"Instead of a proposal that can be interpreted in many different ways, they should just take the decision and say 'We will not touch this area', and then start negotiating."

Whatever happens with this scheme, it will inevitably be seen as an original way of fighting global warming.

As things stand now, the chances of success are limited, and even Professor Larrea who helped draw up the project recognises that.

But for him, it also has a symbolic value. The principle of tackling global warming not by trading in greenhouse gases but by not producing them in the first place is genuinely innovative, he thinks.

"I see it as a challenge to the international community, which will probably create a precedent for a new mechanism to prevent global warming."



SEE ALSO
Ecuador: New hopes and challenges
16 Apr 07 |  Americas
Occidental offers Ecuador $1bn
20 Mar 06 |  Business
Country profile: Ecuador
21 Jun 06 |  Country profiles

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