NEWSLETTER 6 OCTOBER 2013

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SPECIAL ISSUE ON THE END OF THE YASUNÍ-ITT INITIATIVE

THE END OF A SAGA: THE YASUNÍ-ITT INITIATIVE

By Pablo Andrade

From the start of its activities, the ENGOV consortium believed it was important to follow the evolution of the Yasuní-ITT Initiative, promoted by the Ecuadorian government. In our opinion, the Initiative was an example of the modes of natural resource governance that in Latin America promised to innovate in the existing framework of global environmental governance.

The principle of “avoided emissions,” i.e., the prevention of the environmental damage caused by CO

2 released into the atmosphere by oil sourced from the ITT field –located in a major biodiversity

area in the Ecuadorian Amazon Rainforest – changed the prevailing paradigm of environmental management. Additionally, the mechanism proposed would have promoted the role of the United Nations as the key player in global environmental governance.

This was the path taken by the Ecuadorian government between 2007 and 2010: the creation of a trust fund fed by contributions from the international community, co-managed by the UNDP and the Ecuadorian State.

These possibilities were brought to an end on August 15, 2013 by the decision of the Ecuadorian administration to halt Initiative. The decision, in our opinion, should be understood from various perspectives. The same goes for the potential implications of this measure.

Photo: President Rafael Correa in a presentation on Yasuni-ITT

Source: www.democraciaecuador.ec

Map: ITT BlockSource: Publico.es

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The primary aim of ENGOV is to generate new knowledge on how environmental governance is shaped in Latin America and the Caribbean (LAC). The project focuses on new develop-ments and policies that enable or prevent the dual goal of ending poverty and protecting natural resources. Another important aim of ENGOV is to develop a more integrative ana-lytical framework on environmental govern-ance and natural resource use in LAC.

WEBSITEMore information on the partners, activities, results and publications of the project can be found at www.engov.eu

Project funded by the European Union through FP7

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THE POLICY THAT BROUGHT THE YASUNÍ-ITT INITIATIVE TO AN END

By Pablo Andrade

On August 15, 2013, President Rafael Correa announced his decision to put an end to the Yasuní-ITT Initiative. Though there are structural grounds for the governmental decision, the immediate cause is quite simple. The administration that adopted the initiative in 2007 ceased to exist in 2013 and gave way to a new government.

My claim is counter-intuitive, as the President and the governing party (Alianza País) are only one. However, behind the scenes there has been a change in the coalition of the players in control of the state. In 2007, the administration was made up by a heterogeneous coalition with the major influence of decision-makers from the ecologist movement. This presence enabled, both in the development policies adopted at the time and in the Constitution passed in 2009, to rehearse the right to nature and to make several attempts at “going green” with the Ecuadorian economy, an Initiative that gathered significant momentum.

The gradual loss of influence of the green movement in government became evident in 2009 and reached a climax with the February 2013 elections, in which the President was reelected for an overwhelming majority of 57% of the ballot. The President’s election base came from the consolidation of the election machinery of Alianza País, with which the most radical and visible branch of the old green allies of the government had broken up. Thus, the decision made in August leads us to believe that the Initiative failed to take shape as a state policy because the “green activists” within government were unable to reach an agreement with another block of decision-makers, who in 2009 started looking forward to a re-edition of a development model based on natural resource yields. This group is now in control of the State.

Photo: Demonstrations for the continuity of the Yasuni-ITT Initiative.

Source: Campaña Amazonía por la vida

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EXTRACTIVISM IN ECUADOR

By Carlos Larrea Maldonado

Four decades after Ecuador started to export oil, everything points to the conclusion that oil has made hardly any contribution to the equitable and sustainable development of the country, in spite of the economic and social transformation it involved. Economic growth has remained elusive and unsteady, at an average annual growth rate of 1.38 % of GDP. Despite major so-cial achievements since 2006, the social, ethnic and regional disparities that have historically stricken the country have persisted, with 35% of the population living under the poverty line in 2011, and sub-employment levels reaching 56% of the urban workforce. Social inequity has barely declined, while the Gini index has remained at 0.46 in 2011.

Ecuador is ranked 89 among the 187 countries in the UN Human Development Index. In Latin America, it is evidently one of the less developed nations, with a per-capita income below the average for the region. The economic diversification of Ecuador is still low, and according to CE-PAL, in 2011 staple products still represent 92% of exports. Oil represents 55% of total exports between 2000 and 2012, and oil revenues have an average share of 29% in the government’s revenues during the same period.

The environmental impacts of oil production have been serious, particularly with regard to de-forestation, loss of biodiversity, pollution and risks for human health. More worrying still, the estimates of proven reserves range from 3.65 (Ecuadorian government estimate) to 6.5 (accord-ing to the Energy Information Administration, 2011) to 8.2 million barrels (OPEC estimate, 2012), which will by no means allow for more than 30 years of continued net exports, including extrac-tion from the ITT block. Indeed, net crude exports have already decreased by 21 % since 2004.

Therefore, a shift to alternative development strategies does not stand as a necessity but as an obligation. Significant literature has pointed out that extractive economies in developing countries have suffered from meager economic results, scarce diversification, structural unemployment, limited institutional development, and strong environmental impacts. Ecuador is no exception. In this regard, the government’s decision to strengthen the oil model in the country calls for an urgent evaluation of the long-term results of this activity and the real prospects of overcoming extractivism in Ecuador.

Oil production between 1972 and 2016, including the ITT contribution.

Source: Ministry of Energy and Mines

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Photo: Chevron’s toxic legacy in Ecuador’s Amazon

Source: Rainforest Action Network (CC)

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AN INTERNATIONAL PERSPECTIVE

By Benedicte Bull

The decision to put an end to the Yasuní-ITT Initiative has had international reverberations. There are two major perspectives: on the one hand, some emphasize the responsibility of the international community for the failure of the initiative, and on other, the Ecuadorian gov-ernment is criticized for failure to create sufficient trust in the project at international scale.

Leaving these positions aside, the important questions now are: What is the impact of this decision on the potential success of future Ecuadorian efforts to attract international cooperation for environmental projects? What are the implications of this decision for the attempts to create alternatives to the currently prevailing framework of global environ-mental governance?

The answer to the first question is, almost ironically, that this decision does not necessarily mean that international cooperation will be harder to reach in the future. As it seems, the negative response from the international community had not so much to do with financial constraints – though they also played a role—but rather with the lack of consensus on the principle that gives an economic compensation in exchange for refraining from the exploita-tion of oil resources. It was feared that support for the Yasuni-ITT initiative would trigger a series of claims from poor countries --and even from richer countries like Saudi Arabia—in what some called “environmental blackmail”. A second reason for concern has been a lack of will in donor countries to endorse the same principles of Yasuní-ITT in their own environ-mental policies at home. Such is the case of Norway, one of the countries from which Ecua-dor expected to receive support. The reason for its refusal has been partly its own domestic debate on oil exploitation in three very vulnerable areas of the North: Lofoten, Vesterålen and Senja. Some members of the previous administration were in favor of oil exploitation there and would rather not pursue a different line abroad. However, the outgoing Minister for the Environment of Norway announced a cooperation plan with Ecuador that involves the transfer of USD 50 million for the protection of the rainforest. The Minister claimed, “The will of the Ecuadorian government is now sufficiently strong for us to consider success realistic in that area...”

The answer to the second question is less optimistic: the closing of the Yasuní-ITT Initia-tive has shown that it takes a long time to obtain international acceptance for break-through solutions that are designed to address the very essence of the climate change problem rather than just “restoring” damage. The problem is that the planet does not have time to spare in these lengthy processes. The news of the Yasuní-ITT termination is really sad news, not only for Ecuador but for the world.

The outgoing Minister of Cooperation of Norway, Heikki Holmås (left) and Minister for the Environment, Bård Vegard Solhjell (right), in the Amazon Rainforest, June 2012.

Source: Det kongelige norske utenriksdepartementet.

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IMPORTANCE OF THE YASUNI ITT INITIATIVE TO PROTECT THE RIGHTS OF THE TAROMENANE AND TAGAERI PEOPLE

By Doreen Montag

It was an inspiring initiative in negotiations for climate change mitigation as far as the human component is concerned. In a nutshell, this policy protected the right of self-determination of the Tagaeri and Taromenane, two indigenous communities living in voluntary isolation in the Intan-gible Zone, a protected area within the Yasuní National Park. This area would be endangered, if not immediately, in the medium term, because it includes the Ishpingo block, representing 50% (~460 million barrels) of the total crude reserves in ITT.

The Ecuadorian Constitution explicitly mandates the Ecuadorian State to respect the diversity of nationalities existing under Ecuadorian sovereignty. The Initiative, as a public policy of the Correa administration, was aimed to honor this commitment to the semi-nomad Tagaeri and Taromenane societies. The Initiative met their need to move about freely in an extensive area, enabling them to preserve their life style.

Thus, the recent decision by the Ecuadorian government could intensify the threats that the Tagaeri and Taromenane already face, as the expansion of extractive activities already compro-mises almost half the Park. Indeed, since 2003, conflicts have intensified between the isolated peoples and other indigenous populations, and between the isolated peoples and mixed-race and even intra-ethnic settlers. The latest bloody conflict was reported in March 2013. Historically, we know of the impact that the oil industry has had on the lives and health of the Huaorani –an ethnic group that has a direct kinship with the isolated communities- who probably have the highest rate of maternal mortality and infant malnutrition in the country. What the Huaorani experience today is very likely to become the fate of the Taromenani and Tagaeri.

Map of the intangible zone of the Tagaeri/Taromenane community

Source: Courtesy of Clinton Jenkins, North Carolina State University, 2013.

ENGOV RECENT RESULTS:

Virtual Library on Society, Policy and Nature. Sociedad, Política y Naturaleza is a collection of publications on the opportunities and obstacles on the way to sustainability, social justice and local development in Latin America and the Caribbean. It an ongoing project prepared by the members of the ENGOV Project. http://www.engov.eu/biblioteca_es.html or http://www.biblioteca.clacso.edu.ar/colecciones/saladelectura/

Inventory of databases on environmental justice conflicts in Latin America and the Caribbean. The inventory is a collection of the various efforts to record environmental conflicts and trends in Latin America and the Caribbean. It is freely accessible for social movements, activists, researchers and policy-makers. The database is currently in progress http://www.engov.eu/bd_justicia_ambiental_es.php