Will Ecuador's plan to raise money for not drilling oil succeed?

In a country where oil extraction has a long, bloody, and contentious past, President Rafael Correa put forth a novel idea, known as the Yasuni-ITT Initiative. He announced in 2007 that he would not touch the oil if the international community compensated Ecuador. He said that leaving the oil would help achieve three international objectives: protecting biodiversity, respecting the rights of indigenous people, and combating climate change, since it is estimated that extracting the oil would release 410 million metric tons of carbon.

The most difficult hurdle is how to get paid for leaving oil instead of selling it.
At first Ecuador, with an economy largely dependent on oil, asked international countries for compensation of around 350 million US dollars per year (about half of what could be expected from the oil). However, after several deadlines—and two years—passed without raising the funds, Ecuador has now turned to the burgeoning carbon market by offering ‘Yasuni Guarantee Certificates’. Yet as the Biotropica paper points out this means that the initiative would not result in a net less in carbon, since nations and companies would likely offset continuing pollution.

“The best way to minimize the risk associated with the carbon bonds is to encourage supporters to make direct donations,” said Remi Moncel of the World Resources Institute. “While less problematic from the point of view of environmental integrity, it is harder to raise money that way.”

Yasuni-ITT is an example of just how difficult such donations are. Germany has been the largest verbal supporter of Yasuni-ITT. Numbers have been tossed around, but the nation has yet to put forward any real money and recent reports suggest that Germany may be backing-off original promises. Other European nations have shown interest including Spain and France.

Despite the difficulties facing Yasuni-ITT—including making certain that countries compensating Ecuador won’t decide to drill for themselves in the future—the researchers believe that Yasuni-ITT will become a model both for oil and gas drilling in areas where it would lead to environmental degradation, biodiversity loss, or local conflict, that is, should it succeed. As well, the authors say, Yasuni-ITT should be looked at as a creative way to combat climate change.

Mongabay