Entries in oil (2)

Monday
Nov302015

Burn Down For What? The End of the Coal and Oil Era

Fossil fuel powered energy has been one of the most detrimental factors in environmental deterioration over the last century, but thankfully the age of coal and oil looks like it could finally be coming to an end. So, with the end an era drawing closer, where will the future take us?

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Thursday
Sep012011

Yasuní and the True Value of the Environment

Attaching a financial value to the environment has long been talked of as a potential solution to our destructive exploitation of the Earth’s natural resources. The outcome of the Yasuní situation will be an excellent indicator as to the ability of this economic approach to make a significant difference to conservation.

Image @Geoff Gallice

Many will claim that it is impossible to attach a monetary value to the natural world. But the Ecuadorian government has done just that. When an enormous oil field worth approximately $7-10bn was discovered beneath the Yasuní National Park, an area considered by many scientists to be the most bio-diverse region on the planet, the country faced a dilemma; cash in on the oil reserve and let an area of unparalleled environmental significance be destroyed, or resist the cash incentives offered by the oil companies and conserve the area.

Ecuador is a country facing poverty on a large scale, with approximately 33% of the population below the national poverty line; an issue that could potentially be addressed with the correct usage of profits from the Yasuní oil extraction. With this issue to consider, at no point has this been a simple choice between money and morals for the government to make. However, the tough decision was made, with neither of these options being taken. Former oil minister Alberto Acosta, a European-trained economist heavily involved in government policy at the time, was placed in charge of the future of Yasuní. His well-documented decision was to challenge the rest of the world to donate half of the value of the oil ($3.6bn) over 13 years, or they would give the go-ahead for oil companies to begin extraction. Acosta said: "We will leave the oil in the ground and save the forest and the people if you, the world, make a financial contribution.”

This remarkable ultimatum has been backed by 78% of Ecuador’s population, an amazing percentage considering the fact that a significant number of them are suffering the effects of poverty. As well as the support of the public, the plan has been declared a ‘safe environmental investment’ by the UN, which has also agreed to administer the Ishpingo Tambococha Tiputini (ITT) Fund, established in August 2010. The plan is intended to avoid what has been dubbed the “oil curse”, a phenomenon that has seen oil rich, developing countries remain poor after having proceeded with the extraction of their oil reserves. The global community has until December 2011 to come up with $100m as a downpayment on the deal. On 14 August, The Observer claimed that $40m had been raised so far, with Chile, Peru, Spain, and Italy having made significant contributions.

The financial valuation of the environment is clearly a difficult thing to do. A recent attempt in the UK by The National Ecosystem Assessment (NEA) aimed to put a price on Britain’s natural environment. Professor Ian Bateman, of the University of East Anglia, and one of the study's lead authors, said: "Why would we want to put economic values on environmental goods and services? It's very simple – it's to ensure their incorporation on equal footing with the market-priced goods which currently dominate decision-making." Clearly this is very different from the situation in Ecuador. But the principle is similar; Oil has a clearly defined value on the world market, whereas a value has never been attached to the land ruined by the extraction of this valuable commodity. Therefore, like in the case of the British countryside, this land has never been on equal footing with the market-priced oil, and has therefore never stood a chance of competing with it.

The situation in Ecuador has forced the government to put a price tag on this land. It is interesting that the price they chose is half that of the oil beneath it: a good illustration of what we consider most important and valuable. However, this price need not necessarily be an accurate valuation of the land (how do you value unique and pristine rainforest with more species per hectare than in any other place?) Rather, the important thing is that the Ecuadorian government receives adequate compensation, and more important still, that the area is protected.

You can donate and follow the latest news regarding the Yasuní situation online.

By Alex Prior