“Gimme all your money or I’ll contribute to global warming”

Environmentalists were left disappointed Friday when Ecuadorian president Rafael Correa announced that Ecuador would be abandoning its ambitious plan to receive payments for oil it didn’t drill in the Yasuní National Park. The premise of the project was that Ecuador would abstain from exploiting the significant oil reserves within the Yasuní National Park located in the Amazon, in exchange for the international community compensating the state for the foregone revenues and carbon savings. Correa was hoping for payments in the range of $3.6 billion but the mechanisms created to raise the money only managed $13 million. Correa is now pursuing a bill to beginning exploration in a small section of the park.

In general, the problem with initiatives like what Correa was proposing in Yasuní is that, even when scaled up, they cannot deal with the root problems associated with climate change, while each initiative is highly unreliable in the medium term. Not exploiting the oil reserves in Yasuní serves a useful role at a mircro level; it prevents the possible future emissions of both burning the oil and the deforestation that drilling for it would create. However, it does not address the root causes of global warming in anything but an ancillary way. The reserves are significant, but drilling or not drilling for the oil would have virtually no discernable impact on gas prices, and by extension consumption and emissions. Similarly, it would do nothing to address other deforestation pressures such as agricultural expansion or illegal mining.

Even if enough of these initiatives could be patched together to start having macro-level impacts, there would not be a way to ensure that they would persist, even in the medium term. For example, in the Ecuadorian case, there was apprehension that Ecuador would take the money and then end up drilling for the oil anyway, either under the current government or a future opposition one. Ecuadorian promises to return all the money if it reneged on its obligations failed to assuage concerns, at least in part as a result of Correa’s previous decision to default on Ecuador’s foreign debt in 2008. These issues would not be limited to Ecuador, however. There is a limit to the amount of coercion the international community can exert on any given country, so there is always room for governments, especially oil producers, to get out of previous commitments without serious consequences. As a result, so long as the oil remained in the ground, there would always be the temptation for that country to exploit it and no amount of promises would ever make donor countries confident that would not happen.

Though initiatives like the Yasuní National Park one are very attractive in theory, they will likely never constitute more than a small portion of the effort to combat climate change. I think, much like with drugs or even illegal immigration, any attempts to limit the supply of emissions (in the form of products which produce emissions) will fail and that the only really tangible solution is to limit demand for emissions, likely through some sort of a carbon cap. Of course, those types of solutions require a level of international cooperation that is extremely difficult to muster, so more attempts like Yasuní to try to make impacts on the margin will surely be made.


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