How to maintain fossil fuel reserves unexploited? The international legacy of Yasuní-ITT Initiative

As nations prepare for binding agreements on Climate Change at the end of this year in Paris, one of the foremost thoughts in their leaders’ minds should be how to respond to the politically sensitive and socially transformational fact that in order to avoid catastrophic climate change, humanity should not extract more than about a third of proven fossil fuel reserves. According to scientific evidence, to keep global warming within the estimated safe boundary of a 2º C rise in global temperature by 2100, the larger proportion of reserves of oil, natural gas, and mineral carbon must be left unexploited.

 [1]

This means that the nations of the world must face two critically important decisions regarding the allocation of rights over the greenhouse gases emission:

1. Which reserves are to be extracted and which are to be left underground, 2. How much emissions are allowed and in which countries

The world has some experience managing the second point. No experience with the first. Yet it is not true that we should start from zero.

In 2007, Ecuador’s President Rafael Correa made the commitment at United Nations (UN) to leave the oil deposits under the Ishpingo, Tambococha, and Tiputini (ITT) fields [2] of Yasuni National Park, if the international community would contribute half of the oil revenues that the country would have obtained from the extraction of those reserves. Unfortunately, in 2013, after six years of negotiations with the international community, the Ecuadorian government decided to abandon the initiative and proceeded with the exploitation of the oil fields. Nevertheless, years of commitment by those involved resulted in the creation of an innovative financial and institutional mechanism, aimed at leaving the oil underground, that the world could adopt today.

The proposed mechanism consisted on the creation of a trust fund managed by UN, run by a multi-stakeholder committee including representatives from the Ecuadorian government, civil society, and international contributors. The Fund’s capital was to come from both private and public voluntary contributions from the international community.

The Fund was to be an instrument to promote genuine sustainable development, safeguarding environmental and social values, including the protection of rights and cultures of the Yasuni Park local communities. The Fund capital would be invested exclusively in renewable energy projects in Ecuador, and the interests would be directed towards sustainable activities, such as: conserving and preventing deforestation in protected areas and participatory management of natural areas belonging to local communities, conserving the Park in such a way as to allow the Tagaeri and Taromenane peoples to remain in voluntary isolation, reforestation and sustainable management of forests own by small landholders, increasing energy conservation and efficiency nationwide, and promoting social development and sustainable activities in the Amazon basin, including health, education, training, technical assistance and job creation in sustainable activities, such as ecotourism, agriculture, and agro-forestry [3].

Ultimately, the goal of the Yasuni-ITT Fund was to promote the transition from the current economic model based on petroleum extraction, which has failed at reducing poverty and social inequality, towards a new development strategy based on equity and sustainability [4].

Maybe Yasuni-ITT was ahead of its time. Although scientists have warned for years that all known reserves could not be burnt if we wanted to avoid a planetary climatic catastrophe, the world was not listening. Nowadays, as many of the world’s leaders appear to firmly be adopting the need to take action in tackling climate change and it is accepted that all nations—rich and poor—should participate in the solution, the opportunity to resume the legacy of the Initiative: a great contribution to humanity from a country that accounts for only 0.12% of the world GDP, but certainly a much larger incidence in terms of climate smartness and courage to act.

We can now start leaving oil under the ground. We know we must, we have the tools (including the mechanism designed for Yasuni-ITT). And we are accountable to future generations in our commitment to face our shared though differentiated responsibilities according to our respective capacities (UN Framework Convention on Climate Change). That was the essence of the Yasuni-ITT Initiative.

If the world were to forgo the extraction of a considerable part of its known oil reserves, priority should be given to preserve those deposits which extraction would imply higher environmental and social costs in terms of biodiversity, indigenous communities, and world heritage. Moreover, it would also be advisable to privilege the preservation of those places whose global benefits would be optimum in terms of climate change adaptation and mitigation. In sum, those fossil fuel deposits that lie under areas of high biological and cultural value located in developing countries.

Fortunately—or unfortunately—it is not hard to find candidates. Half way around the world from Ecuador, in similar latitudes, another biodiversity-rich country, Africa’s Democratic Republic of Congo (DRC), is grappling with the pressure to exploit oil deposits that have been found in Virunga National Park. The similarities between Virunga and Yasuni are enough to say with confidence that the Yasuni framework would fit Virunga, and to venture the effort.

Both Virunga and Yasuni are tropical rainforest habitats, lying on top of oil reserves, in developing countries (in the case of DRC, it is one of the poorest countries in the world) [5], and both are National Parks. UNESCO has declared the first a World Heritage Site and the second a World Biosphere Reserve. Both are “important bird and biodiversity areas” according to Birdlife International, IUCN Category II protected areas, and both belong to regions considered Priority Places for Conservation by the World Wildlife Fund (the Congo Basin and Amazon respectively). Virunga has also been declared a wetland of international importance under the Ramsar Convention and is home to 200 of the remaining 700 seriously endangered Mountain Gorillas [6] . Yasuni Park is the most important biological reserve in the Amazon basin and possibly the most biological diverse hotspot in the Western Hemisphere [7].Yasuni is also home to two indigenous groups in voluntary isolation; that is, they have chosen to avoid contact with Western culture and to continue living their traditional lifestyle based on gathering, hunting, and semi-nomadic agriculture. In addition, Yasuni is home to about 3,000 contacted indigenous people from the Huaorani and Kichwa nationalities. While in Virunga, approximately 50,000 people economically depend on fishing and its commercialization.

Four years ago, London-based SOCO began oil exploration in the southern part of the Virunga Park. In June 2014, a campaign led by the WWF resulted in the announcement by SOCO that it was ceasing its seismic operations in the area, yet the extent of the commitment to withdraw from Virunga remains unclear. SOCO has labeled it as a “parenthesis” and agreed not to proceed without UNESCO and Congolese approval. There is concern that Park boundaries may be redrawn or other means found to allow for the continuation of their operation.

Virunga National Park is an opportunity for sustainable development involving local people and nature conservation, and, in addition, benefitting the world with a potential means to start committing oil reserves, as we must, to remain in the ground. Yet Virunga is still struggling to maintain its integrity.

Faced with the pressing challenge of finding new and creative solutions to climate change, it is worth to invoke existent tools, not just innovative but also pointed accurately at addressing the causes of climate change (the extraction and use of fossil fuel); tools that were tailor-made to global priority areas and framed within the international commitment to protect the climate system on the basis of equity and in accordance with common but differentiated responsibilities and respective capabilities.

The mechanisms created for Yasuni-ITT could not only be applied to the Virunga case, but should also become a more extend mechanism within the UN Framework Convention on Climate Change: a fund to which developing nations with biodiversity and culturally rich areas lying over oil deposits could apply. This facility could be endowed with enough start-up funds to initiate the process of project preparation and fundraising, with a central team in charge of project coordination, evaluation, monitoring and control. Multilateral institutions, such as regional development banks, IRBD/World Bank, UNDP, UNEP, and so on, could act as implementation agencies as well as provide technical support.

Today, as scientific research provides further evidence that a great proportion of the known fossil fuel reserves must remain unused in order to meet the 2ºC target, the adequacy and importance of such mechanism as a tool to respond to rising global temperatures cannot be overstated. According to the McGlade and Ekins [8] study assessing the geographic distribution of unburnable fossil fuels by type, 42% of Central and South America’s (CSA) oil reserves must remain in the ground, as well as 26% of Africa’s. Similarly, they estimate that 56% and 34% of gas reserves and 73% and 90% of coal reserves should be unburnable in CSA and Africa respectively [9].

The world does not need to wait until a permanent framework under the Convention is available. The application of a Yasuni-ITT Trust Fund based mechanism to that case of Virunga National Park could serve as the first demonstrative project for that future framework.

The Yasuni Initiative may have been so cutting edge and so hard for the Ecuadorian government to sustain without the materialization of the support and commitment of the international community, that it had to be put temporarily on hold. Now the time has finally arrived.


A short version of this article was published in The Guardian, February 9, 2015

Footnotes

[1] – Meinshausen, Malte, Meinshausen, Nicolai, Hare, William, Raper, Katja, Knutti, Reto, Frame, David and Allen, Myles (2009). “Greenhouse-gas emission targets for limiting global warming to 2 ° C”. Nature Vol 458/30 Abril 2009 doi:10.1038/nature 08017. McGlade, Christophe and Ekins, Paul. “The geographical distribution of fossil fuels unused when limiting global warming to 2 °C”. Nature 517, 187–190 (08 January 2015), doi:10.1038/nature14016.

[2] 846 million barrels of petroleum reserves.

[3] Larrea, Carlos and L. Warnars. 2009. Ecuador’s Yasuni-ITT Initiative: Avoiding emissions by keeping petroleum underground. Energy for Sustainable Development Journal.

[4] Ibid.

[5] http://data.worldbank.org/indicator/NY.GDP.MKTP.CD.

[6] www.unesco.org; www.birdlife.org; www.worldwildlife.org;www.ramsar.org;www.virunga.org.

[7] Bass, Margot, Finer, Matt, Jenkins, Clinton, et al. (2010), Global Conservation Significance of Ecuador’s Yasuní National Park, PloS ONE, Volume 5, Issue 1, January 2010

[8] McGlade, Christophe and Paul Etkins. The geographical distribution of fossil fuels unused when limiting global warming to 2°C. Nature 517, 187–190 (08 January 2015)

[9] With Carbon Capture and Storage the figure for unburnable reserves change to: for Africa, oil 21%, gas 33%, and coal 85%; and CSA, oil 39%, gas 53%, and coal 73%.

Leave a comment