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Conservation in Ecuador: Trees or oil | The Economist
Conservation in Ecuador
Trees or oil
An ambitious scheme to save pristine forest starts to take shape
Jul 2nd 2009 | Quito | From the print edition
THOUGH half of Ecuador lies in the Amazon basin, its rainforest is shrinking faster than in neighbouring countries (by 1.67% a year). It has been ravaged by logging, poachers and oil extraction. Settlers have streamed in to carve out a precarious life. Over the past decade they have been joined by thousands of refugees fleeing violence in Colombia, as well as guerrillas and drug traffickers who inflict it. Native tribes have been uprooted, forced deeper into the forest or have disappeared. The government of President Rafael Correa now wants help to keep pristine one of Ecuador's most important remaining jungle areas, in the Y asuní national park. In a corner of the park known as ITT (after the Ishpingo, Tambococha and Tiputini rivers) lies an oilfield which preliminary seismic studies show holds almost 846m barrels of oil, or around 20% of Ecuador's reserves. The ITT area is unusually biodiverse. It is thought to be home to several hundred tribesmen who shun the modern world and whose way of life is protected under a new constitution promoted by Mr Correa. Oil companies, including Spain's Repsol and Chinese-owned Andes Petroleum, are already extracting about 59,000 barrels a day elsewhere in the Y asuní park. Repsol tightly controls access to its field, keeping out would-be colonists. Further east, Petroecuador, the state oil company and the country's worst polluter, is developing a block adjacent to ITT. In 2007 when Mr Correa first mooted the idea that the world should pay Ecuador not to exploit the ITT oil this was widely dismissed as half-baked. Under the influence of a group of politicians from across the spectrum and environmentalists the idea is gaining flesh and credibility.
These would be worth up to $5. From the print edition: The Americas www. The money would be lodged in a trust fund managed by international bodies such as the Inter-American Development Bank. The scheme will go ahead once the first $350m is raised.economist. If a future government in Ecuador opted to exploit the oil. a former mayor of Quito who is promoting it. a former foreign minister who is another of the promoters. as it is called. and last month reiterated its support. it would have to repay the bondholders with interest. Bondholders would have a say in how the money is spent. and spent on alternative-energy projects in Ecuador. In December the government defaulted on $3. Last year Germany agreed to give €300. He accepts that the main obstacle is Ecuador's poor reputation. As a result of Mr Correa's expansionist fiscal policy. Ecuador risks running out of foreign-exchange reserves. The hope is that most of this money will come from European governments.000 ($425. says Francisco Carrión.com/node/13956307/print 2/2 .000) for feasibility studies.2 billion in bonds—the third default in as many decades. says Roque Sevilla. is now worth a closer look.9/9/13 Conservation in Ecuador: Trees or oil | The Economist It now centres on issuing bonds for the value of the carbon emissions avoided by not burning the oil and by preserving the forest.2 billion at the current carbon price in the European emissions' market. the Y asuní-ITT initiative. increasing the temptation to tap the oil. Nevertheless.