Many will have heard about the Yasuní-ITT Initiative. It is a proposal made by the Ecuadorian government – it offered not to drill for oil in the Ishpingo-Tiputini-Tambococha (a part of the Yasuní National Park) if the international community were to compensate Ecuador for at least half of the foregone revenues. This initiative could become a milestone towards the attaching of value to ecosystems and biodiversity. Furthermore, although not every Western politician seems able to recognize this fact, saving Yasuní by paying Ecuador would be a win-win situation.
Many ecologists and environmentalists don’t really like the economist’s approach to ecology – viz. that economists try to express a value of ecosystem services (monetary values are preferred). This is partly understandable, since mainstream economics tends to carry monetary valuation of health, environmental and similar aspects to excess. However, few environmental economists are claiming that one could monetize everything. Nevertheless, it seems important to somehow express the value behind rain forests, a stable climate, biodiversity etc. This need not to be done in monetary terms (!). Furthermore, it is important to keep in mind that values calculated using economic valuation methods are incomplete. They mostly give the lower bound of the real value of ecosystems. Nonetheless, these values can be useful in democratic processes and public discussion, since most people (at least in the “West”) are used to monetary (or at least quantitative) expressions of values.
The Yasuní-ITT Initiative – if Western policy makers could agree to build up the trust fund postulated by the Ecuadorian government – could become an important precedence. It would send a sign that ecosystems, biodiversity, climate stability and rights of indigenous populations have a value. (Unfortunately, for the time being, the initiative is blocked by the German minister of development, Dirk Niebel.) Of course, the amount of money called for by Ecuador (half of the assessed worth of the oil lying under Yasuní, or about $3,5 billion) couldn’t and shouldn’t be understood as the exact value of the rain forest. But it would be an approximation. And Yasuní could survive.
Why I have called this a win-win-situation? The fact is that Ecuador is one of the poorer countries in Latin America, with a per capita income (in PPP, purchasing power parity) of about $8,000 (in contrast, it is some $11,000 for Brazil and $15,000 for Argentina). One third of the population lives in poverty. Thus, the large oil fields under Yasuní are a chance for the country – if properly managed, the revenues could help to alleviate the widespread poverty. From this perspective it is understandable that Ecuador would like to get some compensation if it is not to exploit the oil.
But the “West” has something to gain as well. First, by saving Yasuní we would save a lot of Nature’s beauty – overblown as it may sound, people value beauty. And they gain from it when they visit sites considered as “beautiful” (tourism). Second, every rain forest is a huge genetic pool, providing what economists call “option value” – with a non-negligible probability we may some day find substances with, e.g., pharmaceutical properties in Yasuní. Furthermore, the more biodiversity there is, the more resilient tend ecosystems to be – since Yasuní provides the livelihood for many people (especially indigenous communities), this is an important point as well. Third, maybe most importantly – Yasuní is an important carbon sink. Both it is capturing carbon dioxide from the atmosphere, thus slowing anthropogenic climate change, and its logging would release what has been stored for years, thus accelerating climate change. From this perspective, saving the rain forest clearly is in the “West’s” interest.
Unfortunately, so far it seems that politicians in Western countries are too short-sighted, too parochial or too ignorant to recognize that it is worth to compensate Ecuador for not destroying Yasuní, and that its government, as the representative of the Ecuadorian people, has the right to demand compensation.
The Sceptical Economist 