A few weeks ago I wrote a post about the Yasuní-ITT initiative as an attempt to attach a value to ecosystems. The initiative’s goal is to set up a fund assisting the development of Ecuador in return for the country’s government not exploiting the oil reserves lying under the Yasuní-ITT rainforest. Owing mainly to the refusal of the German development minister Dirk Niebel, the fund has not been set up so far. Thus it was interesting to read his commentary on that subject in a newspaper the day before yesterday. In the following I would like to present his arguments and comment on them.
Dirk Niebel is opposing the instrument of the proposed Yasuní-ITT fund, although he claims to be sharing the Ecuadorian government’s goals of protecting biodiversity, the climate and the rights of Indigenous People living in the forest. In the commentary mentioned above I found the following arguments against the initiative:
- Mr Niebel is opposing the idea to pay Ecuador for not destroying the forest on the basis of foregone oil revenues. Instead he would prefer a mechanism similar to that co-financed by Germany in Brazil (as a part of REDD) where the Brazilian side is paid for reducing the deforestation rate as compared to a reference scenario.
- In the German minister’s opinion, the Yasuní-ITT proposal provides no political incentives, since it is (allegedly) not active forest protection that is to be rewarded, but forborne oil extraction.
- The structure of the Yasuní-ITT initiative is supposed to provide lower social and ecological standards than the REDD mechanism, and civil society groups have not been involved in the planning of the initiative.
- Mr Niebel is suggesting that there are no potential donors to be found in the international community – despite all the promotion efforts.
- He doesn’t want to create a precedence and emphasizes that point by writing that he also wouldn’t pay Somalia for Somalian pirates not to rob food shipments.
Let us now analyse these points, one after another. Here are my answers:
- I would like to know where the price per ha of protected forest under REDD comes from. Since forests generally have no market prices, these must be created in a somewhat ad-hoc way if someone is to be paid for not destroying the forests in question. From the economic point of view, opportunity costs (destroying the forests and extracting the oil is clearly the alternative to protecting it) are no worse than anything else. And surely no more arbitrary. Furthermore, while it is not really that relevant how the specific price is arrived at, it is important what the effect of the initiative would be – and this is the protection of the Yasuní-ITT forest which shall not be touched as long as the initiative remains in place.From this point of view, Yasuní-ITT is even more effective than the REDD mechanism, since it is about deforestation seizure, not about marginal changes in deforestation rates.
- In fact, forborne forest destruction = forest protection. Thus the distinction emphasized by Niebel is rootless.With regard to the “political” incentives: the idea is to set up a fund, not to give a “blank cheque” to the Ecuadorian government. Donors shall be represented in the executive board, thus being able to provide further incentives and to set conditions and standards for spending the money.
- As of the standards – see above. With respect to the involvement of the civil society – the fact is that the vast majority (more than two-thirds) of the Ecuadorian population does welcome the initiative. That the Indigenous People living in the forest itself welcome it, shall be obvious – under the initiative, their livelihoods will be preserved.
- For the time being, about the half of the $100 million needed until the end of 2011 have been warranted ($52.3 million as for today). Many potential donors are said to wait for Germany’s involvement, since this country was the first to embrace the initiative (before Dirk Niebel took office).
- It is clear that Mr Niebel doesn’t want to create a precedence, since he apparently does not find the initiative good. If he would, he would be likely to be eager to create a precedence. Thus this is not an argument actually. The comparison of the initiative to paying Somalia for Somalian pirates not to rob food transports is not only silly – it is offending, since the minister is thus implicitly setting pirates (i.e., criminals) “working” in their own interests equal to a government whose primary goal is (supposed to be) the well-being of its nation.
All in all I had the impression that Mr Niebel sees development assistance primarily as a tool to ensure his own country’s interests. Furthermore he seems not to be able to grasp the innovativeness of the Yasuní-ITT initiative and its great potential for effectively protecting biodiversity, the climate and the rights of Indigenous People. And, last but not least, he has shown in his commentary that he does not understand the way economic valuation of ecosystems functions – viz., that using opportunity costs as a proxy is no less reasonable than using some arbitrary prices.
It remains to hope that Mr Niebel will be forced by the German parliament and/or government to abandon his parochial position.