Failing Yasuni

The Yasuni initiative has failed. In August, Ecuador’s President Correa announced plans to open parts of Yasuni National Park to oil exploration as global donations to cover the opportunity cost of leaving the oil in the ground (the cornerstone of his original plan) never materialized. Ecuador’s initial drilling plan calls for limited drilling in the northern areas of the park and leaves the larger reserves, in the most sensitive areas of the park, untouched for the time being. Based on this limited approach, Correa is claiming that less than 1% of the park’s total area will be affected by the drilling. Looking at the history of drilling in Ecuador, a number of international observers are skeptical of this claim. Regardless of the impact of the drilling, it is indisputable that the failure of the initiative means that one of the most biodiverse places on the planet will now be opened to industrial activity.

Following the failure of the initiative, recriminations have come fast and hard from both sides. For his part, President Correa blames the failure of the international community to ante up and pay for the biodiversity and carbon benefits that it claims to desire. The failure of international donations — both paid and promised — to even approach what he considers fair value of the oil left in the ground left him with no choice, in his mind, but to open the park for drilling. In some sense his claim is a fair one: it is unreasonable for the world to expect a developing nation to pass up billions of dollars in oil revenue. There are, however, equally fair arguments from conservationists for why Correa is to blame for the failure of the initiative. Prime among these is that Correa was essentially blackmailing the rest of the world: pay up or I’ll drill and release thousands of tons of CO2 into the atmosphere as I destroy globally valuable biodiversity in the process. Further, his failure to aggressively stop oil and gas development on the northern edges of the park during the fundraising period of the initiative did little to convince the world that he could be trusted to keep his word, even if paid what he asked.

So now that the initiative has failed, what could have made it work? Several armchair commentators have suggested ways that each side could have contributed to a better outcome. One, the world could have paid the money Correa requested. That suggestion ignores what are legitimate concerns over Correa’s credibility. He has a history of disregarding international institutions when it suits him, and his socialist government is widely mistrusted in the West. Additionally, his administration never satisfactorily guaranteed his commitment to the initiative. How would Ecuador guarantee the protection paid for today was truly perpetual in the face of democratically changing governments?

Two, Ecuador could have placed Yasuni under permanent protection, regardless of the size of the donations, and then hoped this act of good faith inspired the world to provide additional donations. This places the blame for the initiative’s failure squarely with Ecuador, rather than with the rest of the world. While this solves the problem of blackmail, it throws Ecuador fully at the mercy of international community while simultaneously removing the international community’s impetus to donate. More importantly, it ignores the crucial aspect of the Yasuni initiative: its status as a precedent setting exercise in how to protect the environment within the framework of a market-based system. It was an ecosystem services project writ large, and it is this aspect that makes its failure most disheartening.

The Yasuni initiative was a creative and innovative combination of payments for ecosystem services (PES) and land trust models of conservation. Ecuador gave the world a choice between paying for ecosystem services that it was currently receiving for free, or gaining access to additional oil resources. The world, for many reasons (some very good), chose oil. In other words, payments for ecosystem services went head-to-head with the traditional oil market and unequivocally lost. The failure of the PES model on such a large scale has led to doubts about the future of other PES projects. While it is well known that PES schemes have limits, and Yasuni had many extenuating issues, its failure suggests that those limits may be more constraining than expected. Conserving areas like Yasuni, in the face of opportunities for lucrative exploitation, may instead call for “values-based” conservation — a return to the arguments that nature is too precious to put a dollar value on and an explicit rejection of PES. Unfortunately, Yasuni serves as an excellent illustration of the limitations of this approach as well. Aside from its pioneer status in the pantheon of PES projects, Yasuni is also one of the most biodiverse places on the planet. If there was anywhere tailor-made for a values-based approach to conservation this was it. Yet, despite calls for protection in the name of this unique biodiversity, the potential revenue from oil exploration still won out.

Does that leave the conservation movement entirely without options? Perhaps not. The future of Yasuni is, even now, not yet settled. A number of Ecuadorian politicians have promised to place the fate of Yasuni in the hands of the Ecuadorian people by putting the issue to a referendum vote. This vote would permanently ban oil exploration in the park, bypassing Correa entirely. Such a ban enjoys wide public support in Ecuador — as much as 90% by some counts — and so may come to pass.

Ironically, this would represent a victory for the command and control style environmentalism that the American environmental movement began with in the 1950s and 60s that has since gone out of vogue. In its place are the more modern, market-based solutions like PES. But, perhaps in the case of a park that is home to uncontacted indigenous tribes, the old ways are best.
Image Credit: Geoff Gallice (, via Wikimedia Commons


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