The Yasuni-ITT Initiative. Assessment of CDM and REDD in Ecuador

Kyoto Protocol Mechanisms Understanding the cost of climate change in economic terms has been a main feature of integrating the science of climate change with recommendations for action. Examples: The Stern Review (2007) frames climate change as the greatest market failure – climate change will impede economic growth and the benefits of strong early action outweigh the costs. Economics of Ecosystems and Biodiversity (TEEB) study. It relates the global economic benefits of biodiversity, highlighting the costs of biodiversity loss and ecosystem degradation. The study aims to make the invisibility of the value of biodiversity to the economy tangible by predicting the cost of biodiversity and ecosystem damage at 18% of global economic output by 2050.

Clean Development Mechanism (CDM) in Ecuador. CDM - carbon trading avoids the most effective and obvious solution: to leave fossil fuels in the ground. UK companies account for 26.7% of all CERs earned through CDM. Involvement in 1183 projects worldwide, means that they are at the centre of the global carbon market UK funds seven out of the 16 CDM Projects in Ecuador Contradicted by increased emission production at home: expansion of Heathrow Airport (expected to produce an extra 180 million tonnes of CO2 per year, equal to 3.1% of the UKs over all carbon emissions)

REDD and REDD+ Reducing Emissions from Deforestation and Forest Degradation REDD is a set of proposals designed to use market incentives to reduce GHG emissions from deforestation and forest degradation, creating a financial value for the carbon stored in these forests. REDD+. This goes beyond deforestation and forest degradation, and includes the role of conservation, sustainable management of forests and the enhancement of forest carbon stocks REDD is relevant to the Yasuní-ITT Initiative because the Amazon accounts for one tenth of the total carbon stored in land eco- systems and because it is a mechanism being considered for a post- Kyoto Protocol climate regime that addresses the prevention of potential carbon emissions, the protection of biodiversity and has huge implications for forest dwelling peoples.

Criticisms of REDD GHG emissions need to be reduced as well as stopping deforestation REDD is vulnerable to corruption: 1.Setting baseline levels 2.Double counting, and 3.There are strong financial motives for corruption

REDD Crit. cont… REDD also fails to address the main drivers of deforestation Monoculture plantations Introduce non-native plants Provide enormous subsidies to the timber industry, while not contributing to GHG emission reduction

REDD in Ecuador: Impact on forest dwelling peoples UNFCCC REDD policy is limited in its ability to affect equitable and just outcomes for indigenous people. Fails to recognise that forests are central to numerous human and biological processes Market based approaches produce unequal power relations between actors, as they are founded in a system of governance that does not give an official voice to non-state actors.

REDD and Ecuador REDD creates pressures to centralise forest governance, undermining the social, ecological and carbon benefits of traditional forest management and the traditional livelihoods of forest-dwelling people. Indigenous peoples in a weaker negotiating position Undermines local autonomy and leads to increased corporate governance of forests.

REDD and Indigenous groups in Ecuador 2008, the Ministry of the Environment of Ecuador started implementing the Socio Bosque project as part of REDD. One of the obligations is to refrain from activities that are fundamental to traditional subsistence livelihoods and food sovereignty

Opposition to REDD from Indigenous groups within Ecuador ECUARUNARI*: The ecosystems of the Andean and Amazonian forests are a source of life and home to their communities. REDD transfers the responsibilities of countries whose economic models have caused climate change to the people who have traditionally cared for them. REDD would mean a new colonialism in the North and the South, linking to new financial mechanisms, more debt, land grabbing and loss of rights of peoples and communities in the South, while the consumption of fossil fuels by capitalism will continue to increase, with responsibility for climate disasters *ECUARUNARI: The Confederation of Peoples of Kichwa Nationality. Spanish: Confederación de Pueblos de la Nacionalidad Kichwa del Ecuador) is the organization of indigenous peoples of Kichwa nationality in the Ecuadorian central mountain region. Twelve ethnic groups of the region - Natabuela, Otavalos, Karanki (Caranqui), Kayampi (Cayambi), Kitu Kara (Quitu), Panzaleo, Salasaca, Chibuleo, Puruhá, Guranga, Kañari and Saraguros

Opposition to REDD from Indigenous groups within Ecuador CONFENIAE* highlights the misrepresentation and the non-inclusion of indigenous groups with regard to REDD and refuse to be represented by any NGO without authorisation. They demand to be consulted directly and will not negotiate without the consent of their grassroots base, which is comprised of indigenous centres, communities, associations, federations, organisations and nationalities. We reject the negotiations on our forests, such as REDD projects, because they try to take away our freedom to manage our resources and also because they are not a real solution to climate change, on the contrary, they only make it worse *CONFENIAE: The Confederation of Indigenous Nationalities of the Ecuadorian Amazon. Spanish: La Confederación de las Nacionalidades Indígenas de la Amazonia Ecuatoriana. Representing nine indigenous peoples present in the region - Quichua, Shuar, Achuar, Huaorani, Siona, Secoya, Shiwiar, Záparo, and Cofán.

Evaluation Difficulties of applying a market value system onto ecological processes. Fails to address the causes of deforestation A universal shift in the consumption of fossil fuels needs to happen. Attempts to address indigenous rights, biodiversity protection, and GHG emission reductions in climate change mechanisms have been inadequate The economic incentives in trading CERs demotes ethical and socially just objectives, leaving programmes vulnerable to distortion. There is a lack of inclusion and participation with parties and interests outside these financial arrangements. cheating and corruption attractive to polluting agents. What is needed is a model of economic development that moves away from tradable GHG emission reductions and toward a cessation of GHG emission production.

Yasuní-ITT Initiative It addresses THREE issues simultaneously: 1.It is an innovative option for combating global warming, by avoiding the production of fossil fuels. 2.Protecting the biodiversity of Ecuador and supporting the voluntary isolation of indigenous cultures living within the Yasuní National Park. 3.A move away from an oil dependent economy and toward the use of renewable energy sources, as part of a strategy aimed at consolidating a new model of sustainable human development in the country. Proposal: Not to drill 846 million barrels of crude oil under the Yasuní National Park - 20% of Ecuadors reserves. Preserving it underground. In exchange for: Compensation of 50% of the projected revenue from the international community.

Yasuní-ITT Initiative

Outline of Yasuní-ITT Initiative The Multi-Donor Trust Fund Office The Yasuní-ITT Trust Fund will have two windows: The Capital Fund Window funds renewable energy projects (hydro, geothermal, solar, wind and biomass). The Revenue Fund will fund conservation, reforestation, energy efficiency, agro-forest management, social programmes, and research. The minimum capital compensation needs to be equal to half the sum Ecuador would otherwise receive through the extraction of oil in the ITT block The contributions to the Yasuní Fund must reach a minimum threshold of US$ 100 million by the end of 2011.

Outline Cont… Ecuadorian Government will issue Yasuní Guarantee Certificates (CGYs). Funds generated by the sale of CGYs will be invested into renewable energy projects. They will fund Ecuadors National Development Plan. a) Preserving and preventing deforestation in 44 protected areas b) Research in science and technology c) Investment in social development programmes

Alternative Development Model Preferable development model over Ecuadors previous oil dependent economic model - reverses the trend of oil as a resource curse It incorporates the objectives of CDM projects and REDD, with clear objectives for social outcomes It avoids the devastating consequences of oil pollution Embodies a different relationship with natural recourses Can bring about a non-oil dependent economy. According to President Rafael Correa, it is a new development model that embodies a value shift, [The project] would not only reduce global warming, which benefits the whole planet, but also introduce a new economic logic for the 21 st century, which assigns value to things other than merchandise (Correa, 2007).

Issues and Contradictions Still hooked to the Carbon Market CGYs to have the same function as CERs and allow GHG emissions to be offset elsewhere. As we have seen from CDM and REDD this is not an adequate solution for global GHG emissions reduction Correa accused of hypocrisy – expansion of extractive industries elsewhere in Ecuador Accused of holding the world to ransom – threatening to drill if money is not received

Initiative led from the South Yasuní-ITT Initiative has signified a shift in international norms Civil society led initiative The initial development was driven from below with considerable representation from indigenous groups in the area. However, Ecuadorian government has been the channel through which the Initiative has been enacted. Therefore the further it has developed, the more distant from the local people it has become.

CONCLUSIONS -UNFCCC - limited vision for the possibilities for climate change mitigation -Failing to recognise the complexity of forest eco-systems and the simplicity of forest protection (to leave them alone!) -Yasuni-ITT Initiative is an innovative, far- reaching and holistic model -Initiative needs support and constant pressure to re-iterate the objectives

Questions raised about the role of UN and international action If the Initiative is not included in the Carbon Market what are the incentives for governments and Corporations to donate? Germany has withdrawn its pledged $700 million, citing: a lack of a comprehensive rationale, a clear structure of goals and concrete statements on which guarantees will be given Could it be funded by civil society, NGOs, Campaigns? Role of UNFCCC?

Money pledged so far through UN Multi Donor Trust Fund

Contributions

Civil Society Contributions