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The Yasuní-ITT Initiative: Oil Development and Alternative Forms of Wealth Making in the Ecuadorian PDF Print E-mail
Abstract

The design of economic instruments for the protection of ecological wealth in Latin

American countries poor in financial capital, but rich in biological diversity poses

very specific challenges. This article examines some of the interests, claims,

discourses and values of a range of social actors (government officials, business

leaders, international development planners, intellectuals, indigenous representatives,

and activists) involved in defining the future economic use of the Yasuní National

Park, a Biosphere Reserve for Humanity located in the Amazonian Region of

Ecuador, a small oil-producing country in Latin America. Two alternative

development projects for this region are currently being debated by the government,

the oil industry and civil society. The first one involves the development of a large oil

and gas field in the Yasuní National Park, while the second proposes a financial

mechanism by which Ecuador would be compensated for not exploiting the vast

period by combining social anthropology, ecological economics and various political

and economic approaches to development policy, this case study illustrates the unique

problems posed by the incorporation of the natural capital of ecosystems in economic

decisions. Negotiations of trade-offs between development and conservation, it is

concluded, cannot be properly understood without reference to morally framed

notions such as work, productivity, ownership, exchange, reward and responsibility.

heavy crude lying underneath the park. Researched over a two-year

 

1- INTRODUCTION

A growing number of policy makers, economic agents, and social and political actors

in the Third World feel the need to consider ecosystem goods and services in their

economic decisions, especially in Latin American countries poor in financial capital,

but rich in biological diversity. The popularity of the Clean Development Mechanism

(CDM), which allows industrial countries with a greenhouse reduction commitment to

invest in emission reducing projects in developing countries and claim credit for the

reductions achieved, increased exponentially when the Kyoto Protocol came into

force in 2004 and the EU Emissions Trading Scheme came on line in 2005. The call

for a comprehensive approach to mitigate climate change issued at the Bali

Conference of the Parties in December 2007 mentions policy incentives relating to

reducing emissions from deforestation and forest degradation. This has given greater

visibility and political clout to a mechanism known as REDD (Reduced Emissions

from Deforestation and Degradation), which has been discussed and developed over

the last fifteen years by a wide range of conservation organizations anxious to

generate sufficient funding for nature protection in tropical areas (Parker et al 2008,

Funder 2009). Whether the generalization of 'carbon trading' (emissions trading and

trading in project-based credits) is a satisfactory solution to the problems of climate

change has become a hot issue in many developing countries (Lohman 2006, Lahsen

2009), including Ecuador (Oil Watch 2007, Vogel 2009, Martinez 2009), whose

national income heavily depends on oil revenues (Acosta 1986, 1991, 1997,

Kimerling 2006: 656). Although the reality of peak oil is still a matter of controversy,

there is no doubt that official concern for the twin problem of oil scarcity and carbon

dioxide atmospheric release is mounting. In the first half of 2008, oil prices

skyrocketed in a way unimaginable only a few months earlier. Oil prices today hover

around US$ 72 a barrel on the New York Mercantile Exchange, reflecting the impact

of the global economic crisis. However, prices are set to remain relatively high for the

years to come, especially if policy makers start internalizing marginal external costs.

      The design of economic instruments for the protection of ecological wealth,

however, poses very specific challenges: What are the most efficient and equitable

ways of converting natural capital into actual monetary flows? What measures are

needed to ensure that natural capital becomes a driving force in development

decisions? What are the social implications of new markets for environmental

services, such as carbon capture, in terms of gender inequalities, property rights,

access to natural resources, and poverty alleviation? To illustrate the complexity of

the dilemmas such questions raise in practice, I discuss two alternative development

proposals for the Yasuní National Park currently being considered by the government

of Ecuador, the smallest and least developed of Latin American oil-producing

countries (See Map 1). Data were collected through ethnographic methods over a long

period of time, as part of on-going work with the Huaorani nation, and more

systematically over various field trips conducted in Ecuador between 2005 and 2008,

when I was able, sometimes along with Huaorani friends and co-researchers, to

observe and participate in a number of meetings and workshops relating to natural

resource management and payments for environmental services. During these three

years, I conducted open-ended - and often informal - interviews with government

officials, Ecuadorian academics, NGO activists, PetroEcuador employees, priests,

military, and indigenous leaders. I also had conversations with: ordinary people of all

ages in the towns of Coca (Francisco de Orellana) and Puyo; Huaorani and Quichua

villagers; school teachers working in remote indigenous communities; and long-time

friends in Quito and other parts of Ecuador. This research was guided by an interest in

the cultural and moral values framing economic and political arguments around the

values of carbon and biodiversity. In these ethnographic encounters, I paid attention to

the ways in which the presence of indigenous people, particularly the Huaorani people

with whom I have worked for the past twenty years and their 'non-contacted' relatives

has shaped and reconfigured the development futures that are being imagined in

alternative proposals for the Yasuní. This open-ended, qualitative enquiry has obvious

limits, especially when applied to a fast evolving public debate. [1] However, it offers

unique insights, which may be used to guide new research questions.

     In continuation, I examine the new geopolitics of oil exploitation in Ecuador,

before offering a detailed account of the two alternative projects for the Yasuní, i.e.

developing the oil reserves, or developing a new economy based on the services

offered by nature. I then analyse the ways in which property rights and value issues

enter the debate. I end with an exploratory discussion of the potential and realised

values of carbon, which leads me to a more general reflection on the valuation of

'nature' in the context of climate change.

 

2- THE CHANGING RELATIONSHIP BETWEEN STATE AND OIL

Oil has been central to Ecuador's national development for more than forty years. In

2005, Ecuador's oil revenues totalled US$ 5.4 billion, representing about 40% of all

exports and financing about 43% of the budget. In 2008, oil represented 22% of the

GDP, 63% of total exports, and 46% of the government's general budget, while

providing 47% of the country's energy sources (Acosta 2009). For the 2010 budget,

income from oil has been calculated at US$ 3,213 million (US$ 65.9 per barrel),

representing 23% of the government budget

their production. Their aggregate output fell from 8 million barrels per month in 2007

to 7 million in June 2009 [4]. The Ecuadorian government invested US$ 700 million

in PetroEcuador in 2009 to boost the daily production to 510,000 barrels a day in

fields nationally owned, and make up for the decrease in production in fields

controlled by foreign companies [5]. CEPAL calculates that as PetroEcuador's 6,7%

increase in production cannot compensate for the 15% decrease in private production,

total oil production in Ecuador has fallen by 3.6% in 2009. Furthermore, a 6.9% rise

in unemployment, a 51.7% rate of sub-employment, and a 12% decrease of

remittances (due to the economic crisis affecting the USA and Spain, where many

Ecuadorian migrants live and work) have resulted in a 0.4% contraction of GDP [6].

     The fifth largest oil producer in Latin America, Ecuador has been severely

affected by neoliberal policies promoting export expansion and foreign indebtedness

(Kimerling 2006: 654). According to Larrea (2006), not only have these policies

resulted in underperformance in both per capita income and exports, but they have

also worsened the country's long-lasting economic stagnation. After the dollarization

of the economy in 2000, the Ecuadorian government decided to promote the further

expansion of oil exports through increased direct foreign investment. This policy led

to the exploitation of new reserves of heavy oil in the central Amazon region, the

construction of a new pipeline, and the exploration of new areas of pristine forest in

the Yasuní National Park (see Map 2). Rises in oil prices from US$ 9.2 per barrel in

1998 to US$ 41 in 2005 and the staggering US$ 160 in 2008 have not provided the

incentives needed to promote the diversification of the national economy, or to

develop an economic strategy based on the sustainable use of the country's rich

biological and cultural diversity. With a total foreign debt reaching US$ 16.5 billion

in 2003 (equivalent to 61% of GDP), and pipelines operating only slightly above 50%

of their capacity (Larrea 2006), the current government has found it difficult to resist

the short term incentive of continuing to expand oil production, and this despite its

full awareness of the very low quality of the oil being currently extracted, the proven

limits of existing reserves (Ecuador will cease to be an oil producer in the next three

decades), and the very serious ecological damage being caused by the expansion of

     The intensified exploitation of oil in a context of dwindling internal reserves

and relatively high international oil prices has therefore led to contradictory

government policies. Whereas some policies have been aimed at preserving national

sovereignty over natural resources, others have promoted privatization and direct

foreign investment. If the sharp rise in world oil prices has given the government new

incentives to develop even the most marginal oil fields, it has also led the country to

call for a renegotiation of benefit-sharing contracts with foreign oil companies. As

North American and European oil companies are being replaced with Brazilian,

Chinese, Argentine and Venezuelan state and non-state companies in the context of

new regional integration politics, the evolving relationship between state and oil

hydrocarbon industries is giving shape to changing economic development and

territorial configurations, especially in the oil producing areas of the Ecuadorian

Amazon. In 2007, less than a year after his election, President Correa expressed his

intention to secure firm national ownership over all extracted oil. He called all

foreign companies operating in Ecuador to renegotiate their contracts and accept the

new status of service provider, which entails a reduction in their share of oil wealth.

This new contract policy led Oxy (Occidental Petroleum Corporation) to leave

Ecuador in 2006 (Maldonado and Almeida 2006). PetroBras, Repsol-YPF, Perenco

and Andes Petroleum are all currently renegotiating their contracts.

     The two alternative proposals existing for the ITT (Ishpingo-TambocohcaTiputini) Block in the Yasuní National Park (see Map 2) is an excellent example of the dilemmas created by this new geopolitical situation. Should Ecuador develop this

major oil and gas field under firmer state control, or should it try to combat climate

change and preserve biodiversity by keeping the oil underground, and find alternative

ways of generating state revenues from the ecological wealth contained in the

protected area? The public debate is raging.

 

3- THE COST OF OIL EXTRACTION IN THE BUSINESS-AS-USUAL MODEL:

On the 4th of April 2007, Rafael Correa signed a memorandum of understanding with

the President of Brazil, Lula, regarding the participation of Petrobras in the

development of ITT, an oil and gas field estimated to contain 20% of Ecuador's

known oil reserves. It was thought at the time that three other state oil companies,

PetroEcuador, SIPC (China), and PDVSA (Venezuela) would cooperate in this

major development project. A few days later, however, the then Minister of Energy

and Mines, Alberto Acosta, led a counter-proposal for ITT, which would allow

Ecuador to generate needed state revenues by keeping the Yasuní oil in the ground, as

I describe in greater detail in the next section.

     Economic and political pressures to develop the ITT fields according to the

'business as usual' model are great (I was only able to document the intentions and

arguments of Petrobras and PetroEcuador staff members). I wish to argue, though,

that between 2005 and 2007 Petrobras' interest in developing ITT entirely depended

on its securing a firm control over Block 31, which it operated at the time; ITT on its

own was not perceived to bring sufficient economic rewards. 70% of Block 31 is

located in the Yasuní National Park, the remaining 30% falling within the boundaries

of the Huaorani territory (see Map 1). The block's reserves are estimated to be 230

million barrels of heavy crude (15 to 18 IPA grade). A licence to operate in Block

31 was first allocated to the Argentine company Pérez Companc in 1996 under a

benefit sharing contract (contrato de participación), and then to Petrobras, who

acquired Pérez Companc after it went bankrupt at the height of Argentina's economic

crisis (Maldonado and Almeida 2006: 92-105).

     The development of Block 31 was controversial from the start, as it was made

possible thanks to a highly contested presidential decree, which, de facto, annulled the

law exempting protected areas from oil development. Petrobras's acquisition of Block

31 precipitated the launch of the 'Save the Yasuní' campaign by a coalition of

concerned scientists, environmentalists and indigenous rights NGOs. Popular

mobilization was sparked by the granting to Petrobas of an environmental licence to

operate in Block 31 during Lula's visit to Ecuador in August 2004 (Fontaine 2007,

Andrade 2007). It climaxed the following summer, when the courts supported a

decision by the in-coming Minister for the Environment to de-authorize the licence

against the company's appeal (Maldonado and Almeida 2006: 92-104). Huaorani

people, who marched to Quito in July 2005 and organized various local and regional

protests against the Brazilian oil company, played a key role in this environmental

conflict (Andrade 2007). In a protest reminiscent of their action against Maxus (Rival

1998, 2000), they first forced Petrobras to double its funding for the 'Plan for Life'

(Plan de la Vida) and then demanded the company's expulsion from their territory, as

well as a full ban on oil development in the Yasuní. A range of organizations

campaigning against the government's ambiguous consultation procedures supported

the Huaorani mobilization. Despite mounting protests from civil society

organizations, Petrobras' environmental licence was not fully revoked, but suspended

on the grounds of irregularities. According to various oil engineers and

campaigners I interviewed, the main irregularity concerned the company's decision to

relocate its Central Processing Facility from the south bank of the Napo River to a

location within the park's boundaries without previous consultation of the park's

authorities.The Central Processing Facility is the plant where formation water is

first separated from gas and crude, and then sent to waste injection wells. The ITT

fields contain a high ratio of toxic water to oil. Some speak of 130 000 barrels of toxic

water for every 30 000 barrels of crude (Maldonado and Almeida 2006: 92-100).

     It is in the context of intense conflicts around the development of Block 31

that PetroEcuador gradually developed the ITT project with the backing of various

governments before Rafael Correa's election. The initial design, however, goes back

to the early 1990s, when Shell was tinkering with the idea of developing what it

already knew to be a major field (Weigerther and Maldonado 2006: 108, Rival

1994). Although it is difficult to get accurate figures, given PetroEcuador's

determined effort to get the green light to develop ITT, estimated oil reserves are

sizeable. A PetroEcuador engineer told me that the fields contain 900 million barrels

of proven reserves, and up to 1,500 million barrels in total. PetroEcuador has

estimated that oil production would stabilize at 108,000 barrels a day during the first

17 years of the project, before dropping to 58.000 barrels a day 29 years after the

development's start date (Boedt and Martinez 2007: 21). However, given its viscosity,

it is probable than only a fraction of the crude would actually be extractable (Boedt

and Martinez 2007: 20). With an IPA grade of 14, the crude contained in the various

fields (Ishpingo, Tambococha, Tiputini, Wullia and Yasuní) are the heaviest found in

Ecuador, and their extraction will demand the largest and most ambitious

infrastructure and technology ever implemented in the country, with an environmental

impact said to be comparable to that of Texaco in northeast Ecuador (Kimerling 2006,

2007). An invesment of more than US$ 3 billion will be necessary to develop the four

ITT fields, the pipelines, and the in situ electric plants and refineries that this project

requires. Although figures range from 850 million to one billion barrels of crude,

there seems to be a consensus on the 846 million figure, which is the one quoted in

the official Yasuní-ITT documents. There seems also to be a consensus on the actual

duration of the project, five years of preparation, followed by thirteen years of actual

extraction. There is a possibility that the government would split the project, so that

some fields would be exploited while other would not, trying to reach a compromise

between the two main options.

     Exploratory wells were perforated in the late 1990s by Pérez Companc, under

a contract with PetroEcuador that many saw as highly controversial, if not illegal

(Weigerther and Maldonado 2006: 108). According to Weigerther and Maldonado

(2006: 108), the Gutiérrez government (2003-2005) chose to ignore the exploration

work performed by Pérez Companc. The French company Beicip Franlab was

contracted to carry out a new exploration and draw a new feasibility study. It may

be that the Gutiérrez government sought another expert confirmation of the size and

nature of the ITT fields. Two additional feasibility studies were prepared by

PetroEcuador and Sinopec (Proyecto ITT – Opción 1 2007: 17-19), each calculating

different production profiles and revenue prospects for the government. However,

both feasibility studies support the conclusions of the French study regarding the

major technical challenge and the additional production costs that developing these

fields represents, as it would be necessary to build a thermo-electric plant to obtain a

crude light enough to be sent to, and transported through, a pipeline.

     While in Ecuador, I heard rumours about pressures exercised by giant state oil

companies (Petrobras from Brazil, Sinopec and CNPC from China, PDVSA from

Venezuela, Lukoil from Russia, Elf from France, and others) anxious to be selected

for this major project. The reasons why ITT never became a block to be concessioned

under a risk and participation contract similar to those signed throughout the

Ecuadorian Amazon remain to be fully explored. However, one can speculate that the

sheer size of the fields awakens nationalist feelings on the one hand, and that, on the

other, the very poor quality of the crude calls for an entirely different model of foreign

participation. One can also safely conclude that one of the main factors blocking the

development of the ITT fields is the lack of agreement within the Ecuadorian

government as to what kind of contract should be signed, and with whom. In any case,

no one doubts that developing the ITT fields for oil and gas will put an end to the

integrity of the Yasuní National Park. As Weigerther and Maldonado (2006: 111)

correctly note, one cannot perforate 133 wells, build several hundred kms of pipelines

and roads, and a major electric plant (42 MW), and still call the production area a

'protected natural area.' Moreover, as the Napo River is not navigable, there have also

been talks of building a road from Manaus (in Brazil) to Rocafuerte, a sleepy town at

the edge of the Yasuní National Park, right at the border between Ecuador and Peru.

This road project is typical of the development model promoted by IIRSA

(Integración de la Infraestructura Regional Suramericana), which Bebbington (2009)

analyses as "a continent-wide push to open up frontiers for extracting hydrocarbons,

mining, producing biofuels, harvesting timber and investing in agroindustry."

 

4- THE SHARED BENEFIT OF KEEPING THE OIL UNDERGROUND:

When President Correa announced on 5 June 2007 that the government's favoured

proposal for the ITT fields was to keep the oil underground, he received the full

backing of Ecuadorian and North American environmental NGOS campaigning for

the preservation of the Yasuní National Park. This proposal had been formulated ten

years earlier by civil society organizations such as Acción Ecológica and Oil Watch

(Boedt and Martinez 2007: 65). The counter-proposal, now renamed Option One, was

soon to be endorsed by most former Environment Ministers of Ecuador, the United

Nations, and various universities around the world, as well as by the Paris Club and

multilateral lending bodies, such as the Inter-American Development Bank. The

alternative plan was officially presented to the General Assembly of the United

Nations on 24 September 2007. 'ITT Option One,' as it was then called, proposed to

leave permanently underground the country's largest untapped oil reserve and to

design a compensatory financial mechanism covering 50% of government foregone

revenue with the participation of the international community. In his speech to the

UN, President Correa declared that "the Ecuadorian proposal seeks to transform old

conceptions of the economy and the concept of value," adding that "Ecuador is open

to great sacrifices and ready to act with creativity and a sense of justice to counteract

the effects of Climate Change on our planet."

    Alberto Acosta, who singlehandedly brought the ITT project to official circles

while serving as Minister of Mines and Energy, and who subsequently continued to

support it while President of the Constitutional Assembly, explained in a recent

interview how difficult it had been to convince the Ecuadorian government of the

project's merit and validity. On the one hand, very few officials understood the

rationality of his decision: "For many of my colleagues, it was inconceivable that the

very minister in charge of developing oil would campaign for its non-exploitation."

On the other hand, the president of the state oil company, PetroEcuador, was doing all

in his power to speed a decision for the extractive development of ITT, negotiating

agreements with a range of foreign state companies, such as Enap, Sinopec, Petrobras,

and PDVSA (Acosta 2009: 2-3). I similarly found during field research that the option

of keeping the ITT oil in the ground was hampered by power imbalances between the

Ministry for the Environment and the Ministry of Mines and Energy and by the fact

that PetroEcuador was not willing to provide key information to the team in charge of

developing Option One. Moreover, the latter was severely understaffed and

     However, the growing enthusiasm with which the counter-proposal (or Option

One) was received internationally, and endorsed by many prominent figures and

bodies, especially during the Conference of the Parties in Bali in December 2007,

moved the Ecuadorian government to postpone several times its decision on the ITT

development. The alternative ITT project gained so much political legitimacy during

2008 and 2009 that the 'big idea from a small country' is being promoted by the

Ecuadorian government today as 'one of its most important foreign policy

initiatives.' Several European governments have offered their backing and

technical aid, in particular Spain. Germany, following a decision voted in the

Bundestag in June 2008, was reported to have pledged an annual sum of US$ 50

million for thirteen years conditioned by the legal creation of the ITT Trust Fund.

European political support and Germany's promise of hard cash are good indicators of

the relevance of the Yasuní-ITT Initiative in the context of international climate

change negotiations. The initiative is seen by many as providing a creative solution to

the threats to the Yasuní National Park, its people and its biodiversity, while

contributing to reducing climate change inducing carbon dioxide emissions by

keeping oil in the ground and reducing deforestation.

     Rather than analysing these latest developments, or attempting to predict the

future trajectory of the Yasuní Initiative, my purpose here is to examine in detail the

initial proposal, as well as some of the reasons why Ecuadorians have found it

difficult to accept the alternative ITT project as sound government policy. There are

two main documents on the Yasuní Initiative, the initial 'ITT Project Option 1'

document prepared by Oil Watch, and the 'Yasuní-ITT Initiative: A Big Idea from a

Small Country' document currently available on the official Yasuní-ITT government

website (see footnote 24). My research mainly concerns the former.

The document prepared by Oilwatch's technical team comprises four sections,

of which only the last one deals explicitly with the financing mechanism (Oilwatch

2007). It starts by reviewing the scientific facts supporting the idea that the Yasuní is

a reserve of great biological, ecological, and cultural wealth, and then moves on to

examine the hidden costs of extracting heavy crude in a region of high biodiversity

home to indigenous peoples, including groups living in voluntary isolation. The most

critical issue from an environmental perspective is the relation of formation water to

oil (according to some, 90 barrels of water for every 10 of crude, compared to an

average of 80 to 20 in the rest of the Amazon region), and the high content of sulphur

in the ITT fields. Formation waters contained in Blocks 31 and ITT are said to reach

1.375.052.616 cubic meters (p. 24 of the document). This poses extraordinary

technological challenges, given that PetroEcuador cannot currently comply with its

own re-injection directives (Boedt and Martinez 2007: 23). It follows that

contamination of the water system and ensuing ecological destruction will be

unavoidable. The document also mentions the unavoidable impact of the electric

plant, refinery and related infrastructural developments. Waste disposal will represent

another major environmental problem. In its feasibility study, PetroEcuador proposes

to export the waste north of the Napo River to Shushufindi, but this is one of the most

populated regions of the Ecuadorian Amazon. Such a 'solution' is particularly

objectionable, given recent epidemiological studies showing the higher incidence of

cancer in Ecuador's oil producing areas, and the increasing incidence of litigation and

compensation cases (Kimerling 2006). Other negative human, social and cultural

impacts are mentioned, to which it is added that the 'business-as-usual' oil

development option would do nothing to prepare the country for the inevitable postoil era.

     The financial mechanism envisaged to compensate part of the foregone

revenue is barely sketched in the 2007 version. The general idea is to leave oil

underground and ask a 50% compensation of what the state would gain, if it were to

exploit the oil. The document mentions annual losses of US$ 720 million a year, and a

yearly sum of US$ 350 million over ten consecutive years as an acceptable

compensation. Two years on, the figures of US$ 3 to 4 billion are common

inofficial documents. The procedure would involve the emission of bonds for the

underground oil, underwritten by the double commitment of never extracting it and

ensuring the effective protection of the Yasuní National Park (Boedt and Martinez

2007: 6). Every 'shareholder' would receive a certificate or bond from the

government for the crude oil left underground, stipulating the double guaranty that

this crude will never be extracted, and that the Yasuní National Park will be

effectively protected (Boedt and Martinez 2007: 7). Any world citizen or entity

(government, non-governmental agency, private enterprise, etc) may contribute to

financing this project, either through direct donations via the internet, or a range of

other types of donation, including multi- and bilateral governmental agreements, aid

and cooperation agreements, or external debt cancellation. There would also be a

complementary proposal, i.e. the creation of a permanent capitalization fund of

between US$ 800 – 1000 million at 2007 value, in order to produce a permanent

income aimed at setting Ecuador on a post-oil economic path. The resources

generated by this compensation fund would be managed for the long-term, in an

account under international management.

    The motion presented to and approved by the German Bundestag on 25 June

2008 (Krauder et al 2008) offers further thinking on how the Yasuní National Park,

biological diversity and climate could all be protected through compensation

payments for foregone oil revenues. The motion's authors specify that "Ecuador's

proposal offers significant opportunities to preserve a globally unique biosphere

reserve and protect indigenous peoples who live there," while making "a vital

contribution to the necessary debate" about the role of developing countries in global

climate protection. They explain that, as a precondition for implementing the ITT

project, Ecuador asks the international community to contribute 50 % of the projected

oil revenues (i.e. US$ 350 million per year for thirteen years) into a fund. This would

partly compensate the country for the forgone annual oil revenues, projected at around

US$ 700 million. The authors of the motion also mention other options currently

under discussion, such as the capitalization of a fund of US$ 4 billion, which could

potentially generate an ongoing income equivalent to the annual figure requested by

Ecuador. The motion ends with a call for an agreed methodology to determine the

precise size of ITT oil reserves and to calculate the potential revenue from extraction,

as well as a brief description of the issues that have yet to be clarified. These include

the question of who would administer the fund, and what binding rules could be

designed for the long-term protection of biodiversity in both the ITT Block and the

Yasuní National Park as a whole.

 

5- PROPERTY AND USE RIGHTS IN THE YASUNÍ BIOSPHERE RESERVE:

From an economic point of view, the greatest difference between ITT Option One

(Yasuní-ITT Initiative) and Two (business-as-usual development of the ITT oil fields)

is that whereas the latter proposes to give value to a subsoil resource (oil) by

extracting it, the former proposes to give value to its non-extraction, which in itself

would be generative of a whole range of other values, lumped together as ecosystem

services. However, there is a fundamental issue underlying both proposals, an issue

never talked about as such: who owns the land, forest and subsoil, and who controls

the use of these natural resources. The carbon values evoked here (carbon as oil

extracted, separated from water, liquefied and transported, or spilled and causing

harm; carbon stored in the ground, released in the atmosphere, or traded; carbon

stored in trees and forests, which become along with other parts of protected nature

providers of ecological services) can only be realized where property and use rights

have been defined and can be enforced. As anthropologists have long argued (Hann

1998), property and ownership are social relations between human actors. They are

bundles of rights, duties, obligations and responsibilities, rather than exclusive links

between things and their owners. So who owns the Yasuní? This is a matter of great

debate in Ecuador at the moment, as experts and activists are trying to take stock of

the layers of overlapping and often contradictory legislation that articulate, covertly

more often than overtly, the rights, duties, obligations and responsibilities of a number

of social actors on the oil frontier.

     On the basis of my own work (Rival 1993, 1996, 1998, ms) and various recent

sources (Boedt and Martinez 2007, Fontaine and Narváez 2007, Narváez 2009), I

reconstruct below the dynamic and fast evolving status of the Yasuní as a protected

area. The picture obtained is staggeringly reminiscent of the 'shyzophrenia' described

by Frederique Apffel-Marglin (2005), who argues that the current impasse and

contradictory practice of conserving here to destroy there is a direct consequence of

modern alienation from nature through economics. The land right and land use

situation in the Yasuní is a perfect example of the 'shyzophrenic' push she identifies

in many countries of the world today, by which many land areas are being subjected

to environmentally destructive economic activities, while others are being

transformed into biodiversity preserves. According to Apffel-Marglin, not only do

governments apply protective measures unevenly, and, one may fear, only

temporarily, but they do so for the wrong reasons. Conservation areas are created as

enclaves protected from economic predation today, so that their potential economic

wealth can be exploited tomorrow - in future markets. Therefore, the same utilitarian

logic underlies biodiversity conservation and economic exploitation. This is

reinforced by the fact that peak-oil is forcing exploration and extraction at the

'commodity frontiers.' As the renowned economist Joan Martinez-Alier pointed to me

in a personal exchange, the extractive occupation of the Yasuní is driven by the

growing energy and material metabolism of the world economy. As energy cannot be

recycled, even a non-growing world economy would require fresh supplies of fossil

fuels. It follows that areas such as the Yasuní are always under threat of becoming

future frontiers of extraction, even when the intention to protect nature is initially

     Before Shell's explorations in the early part of the 20th century and the 1941

war with Peru, there was no strong nationalist attachment to the Yasuní - or to any

part of the Oriente (Ecuador's Amazon region) for that matter. And before the oil

frontier moved south of the Napo River, the Yasuní was no more than one of these

tierras baldías (empty lands) belonging to the state and awaiting for someone to

purchase it or to lease it, and turn it into some form of profitable development.

Shyzophrenia between oil development and biodiversity conservation on the one

hand, and collaboration with and resistance to the oil industry on the other, started

straight after PetroEcuador's allocation of Block 16 (see Map 1) to Conoco in 1985,

which signalled the southern expansion of the oil frontier (Kimerling 1990, Rival

1993, 1996). Block 16 was located at the heart of what was then considered to be 'the

Yasuní,' already recognised as 'Huaorani land,' but not yet a 'biodiversity hotspot.'

The battle for the preservation of the Yasuní started when the boundaries of the

Yasuní National Park (created between the Napo and the Curaray rivers by the

Ecuadorian government in 1979, and with a surface of 1,476.000 hectares) were

altered in 1990, due to pressures from the oil industry. The park's surface was reduced

to 982,000 hectares, with the remainder of the land devolved to the newly titled

'Huaorani Territory.' The two main reasons behind this boundary redrawing were that

(1) the law authorizes oil exploitation in indigenous territories (the state being the

owner of the subsoil), but not in national parks; (2) the anomaly of Huaorani

communities located within the park needed to be corrected, as conservation thinking

at the time implied that national parks were to be without people. In the mean time, in

1989, the Yasuní National Park - with its original 1979 boundaries - was granted the

title of 'biosphere reserve for humanity' under its programme 'Man and the Biosphere

Programme by UNESCO, which secured its international recognition as an area of

unique beauty and worth. This honorific title binds neither the Ecuadorian

international community, but creates symbolic value, awareness and a sense of moral

obligation, without defining rights, responsibilities or obligations.

    The formation and ever-evolving fate of the Huaorani Territory is even more

complex than that of the Yasuní National Park, and inseparable from it. In 1969, the

Ecuadorian government granted 16,000 hectares of land to the Huaorani communities

that had been 'pacified' and sedentarized by the Summer Institute of Linguistics

(SIL). In 1983, the Institute of Agrarian Reform (IERAC) enlarged the 'protectorate'

to form a new ethnic territory of 66,570 hectares. On 10 April 1990, the Huaorani

nation was legally granted the largest Indigenous territory in Ecuador (960 000

hectares over three provinces, Napo, Orellana and Pastaza), which comprised, in

addition to the 1983 ethnic reserve, the 650,000 hectares devolved from the Yasuní

National Park. This new land title was revised and modified in 2001, with some

additional adjudications that are yet to be fully registered or legalised. Several

conservation NGOs have claimed during interviews that the Huaorani Territory now

comprises 809,339 hectares, and I am still trying to understand recent changes to the

boundaries of this ethnic territory (Rival ms).

     As the oil frontier continues to advance and new operational blocks are

allocated both in the Huaorani Territory and in the Yasuní National Park - the latest

being Block 31 and ITT - each land area gets more fragmented, as well as more

interconnected. The recent creation of ITTZ (Intangible Tagaeri Taromenane Zone)

by the current government to offer minimal spatial protection to isolated indigenous

people has rendered this interconnection even more intricate. ITTZ originated from

two different events, one pertaining to Huaorani history, the other to Ecuadorian legal

history. Both help explain the changing nature and quasi-legal status of this peculiar

land. Highly mobile and traditionally structured by warfare (Rival 2002), Huaorani

society has adjusted to the changes brought about by the expanding oil frontier and its

social actors (missionaries, oil companies, NGOs, and so forth) in diverse ways. For

reasons that cannot be explored here (but see Rival 2002 and 2009), Tagae's group

refused to be relocated in the protectorate created by the Summer Institute of

Linguistics (SIL), choosing to continue to raid oil camps in the Tiputiní and Yasuní

areas. In July 1987, the Tagaeri killed Archbishop Labaca in Block 17 (see Map 1),

which had been adjudicated to the French oil company Elf Aquitaine (with the

participation of BrasPetro) the previous year. After this tragic event, the area was

declared a sanctuary closed off to economic development. During the ensuing twelve

years of moratorium (until 1999), it became home to new groups in voluntary

isolation, such as the Taromenane and possibly other groups fleeing away from Peru's

oil frontier. However, the advance of the oil frontier in Ecuador could not be detained

for very long. Two government decrees were passed in 1999, one changing the status

of the sanctuary from protective no-man's-land to that of zona intangible (intangible

or untouchable zone), the other reversing the law preventing oil development in the

National System of Protected Areas (SNAP), to which the Yasuní National Park

belongs. These two decrees resulted in the de facto reform of the Yasuní National

Park, without any further change to its boundaries, as it had been the case in 1990. If

71% of the park is now declared zona intangible, this leaves 29% of the park opened

to extractive development, which is carried out by five oil companies (Repsol,

EnCana, Petrobras, Occidental and PetroEcuador). By overturning constitutional law

on the ground of superior national interests, this second government decree created a

dangerous precedent, and weakened environmental policy and regulation in Ecuador.

It took no less than seven years to pass the first decree. Whereas

environmental and human rights activists campaigned for natural boundaries such as

rivers, the oil companies whose blocks partly overlap with the zona intangible did

everything in their power to ensure minimal encroachment to their allocated blocks.

The boundaries of the zona intangible were finally agreed upon in January 2007.

Although celebrated as a positive outcome signalling Ecuador's moral commitment to

the protection of the rights of 'non-contacted' Indians, ITTZ offers, in practice, only

minimal protection. ITTZ prevents neither the unfolding of tribal history, nor

incursions by loggers and other illegal economic actors. A group of 'civilized'

Huaorani men motivated by a mix of traditional grievances and external influences

entered the zona intangible in May 2003 and killed a dozen or more 'Tagaeri' and

'Taromenane' (Rival 2009). It took the IACHR (Inter-American Court of Human

Rights) three years to react to this raid and issue a precautionary order for the

protection of the human rights of groups in voluntary isolation, in May 2006. The

IACHR order moved the Ecuadorian government to finalize the official demarcation

of ITTZ's 780,000 hectares the following year, in 2007.

     Rather than being entirely new, the concept of 'intangible land' re-articulates

the principle of absolute protection and non-intervention that initially characterised

the whole of the Yasuní National Park, when it was still imagined in all its integrity as

the non-intervened, off-limits nucleus of a region surrounded by oil development. In

the late seventies and throughout the eighties, the Yasuní National Park was the

sacred and untouchable biosphere reserve, while the Huaorani Territory was a buffer

zone, where some oil activities were allowed. It is ironical that the ITTZ status of

absolute protection and conservation has been obtained on the ground of cultural

diversity (to protect "the last free humans on earth" as one informant put it), rather

than biological diversity per se. Another irony is that there are at least three 'civilized'

Huaorani settlements in ITTZ, which, under the new legislation, should be relocated

outside ITTZ boundaries. Some human rights campaigners are advocating that the

'civilized' and 'contacted' Huaorani be allowed to remain in the park and recognised

as the 'guardians' and 'protectors' of their 'non-contacted' brethrens. In the

meantime, conservation NGOs advising the government are re-imagining the

'biosphere reserve' in terms of three concentric circles: (1) ITTZ, the untouchable

core; (2) the Huaorani Territory, a buffer zone with limited and traditional use of

natural resources; and (3) the Yasuní National Park, an economic activity zone, where

sustainable development is to be encouraged. As for Huaorani people, they claim use

rights to the whole of the Yasuní, while trying to convey their own view of

territoriality and good life in a changing world where cash income has become a

necessity (Rival ms, Surrallés and Garcia Hierro 2005).

     Despite fifteen years of biodiversity research and conservation activity, as well

as the drafting of at least a dozen management plans, the problem remains that none

of the areas making up the Yasuní Biosphere Reserve receives sufficient funding to

give reality to its nominal official status of 'state property for the conservation of

biodiversity for present and future generations of Ecuadorians.' Worse still, in

response to chronic underfunding and understaffing, some researchers advocate

'market reform,''governance devolution' and the 'direct participation' of the oil

industry in the management of the biosphere (Southgate 1998, Fontaine 2007: 76).

Such authors argue that once liberated from state control, the Yasuní Biosphere

Reserve can start becoming an economic space where environmental services, carbon

trading, and many new and old ways of realizing carbon values can happily co-exist.

Indigenous peoples who have lived with the oil industry for the last thirty years are

very clear and pragmatic about its costs and benefits, as well as the delusions of clean,

sustainable oil development (Rival ms). Such attempts to reconcile oil industry and

biodiversity conservation as fully compatible land use activities were tried many

times throughout the 1990s, and found deeply flawed (Rival 1997, 2005, Escobar

     The incompatibility of oil development and biodiversity conservation recalls

Eric Wolf's (1972) seminal article on ownership and political ecology, in which he

showed that ownership conflicts arise at the intersection of narrow interests and

broader ones, that is, when short-term, productive decisions are opposed to collective

decisions aimed at securing social reproduction in the long-term. Under capitalism,

common property cannot exist along private property as a form of property of a

different nature. What seems to be happening in the Yasuní today is the end of a

highly unstable system of land use and ownership, in which a ghostly state claims

exclusive ownership rights to the subsoil (which it leases to private, even foreign,

companies) and more ambiguous rights to the uniquely biodiverse forested surface.

An absentee owner of the 'national park,' the state has devolved land rights to

indigenous communities, but only as long as the latter use their rights collectively;

carry on a traditional way of life; and do nothing to obstruct oil development, which,

although using an underground resource, occurs on the surface, and impacts its

diversity. Fontaine's (2007) proposal for the Yasuní National Park illustrates how

protected areas and communal land tenure regimes can be re-interpreted in terms of

efficiency and transaction costs, and ideologically transformed into corporate

ownership rights systems, the 'shyzophrenic logic' that Frederique Apffel-Marglin

(2005) sees lurking behind the massive land privatisation movement occurring in the world today.

 

6- OLD AND NEW CARBON VALUES:

I have examined here two alternative land use proposals for the ITT fields, as well as

the wishful policy recommendation that biodiversity conservation be made

compatible with oil development in the Yasuní National Park, and shown that

development decisions in Latin American countries poor in financial capital but rich

in biological diversity increasingly involve attempts to make the values of nature an

integral part of decision-making. Not only is the Ecuadorian Amazon endowed with

high levels of ecological wealth, but it also contains most of the country's oil reserves.

The dilemma between relying on a known world commodity such as oil or taking the

risk of developing a new economy based on the values of biodiversity is particularly

salient in the Yasuní, where the tensions and conflicts embroiled in reflecting the

values of nature in real economic transactions are still unfolding. What I find most

anthropologically fascinating about this case is the fact that the values of oil and of

biodiversity are intrinsically linked in the decision making process. It is the projected

value of a barrel of oil which determines the value of the compensation fund (i.e. ITT

Trust Fund). And it is because of the emergence of international carbon markets

alongside oil markets that the Yasuní Guarantee Certificates have been declared

ineligible for the REDD strategy discussed at the fifteen Conference of the Parties in

Copenhagen in December 2009. As a market consultant curiously remarked: "not

pumping up the crude oil does not in itself constitute an activity that reduces

greenhouse gases (Silvestrum 2009: 5)." The consultancy firm contracted by the

German aid agency GTZ to explore the compatibility of the ITT project with REDD

trading regimes has concluded that pursuing this project in view of obtaining funds

for avoided emissions from avoided oil extraction (a financial mechanism not based

on market principles) is unlikely to generate "the entire magnitude of investment that

has been calculated to be required to not exploit the oil field (Silvestrum 2009: 78)."

The catch twenty-two is that if Ecuador pursues the Yasuní-ITT Initiative as a REDD

programme, a course of action recommended by the consultancy firm, it will still not

generate sufficient funds to make up even 50% of the foregone oil revenue. Despite

all the hype around REDD, oil from remote tropical forests seems to continue to win

economically over ecosystem services.

     The notion of a country receiving payments for offsetting part of its foregone

oil revenues and using these payments pro-actively to protect biodiversity is not easily

thinkable under the current climate negotiation regime. A climate change specialist

told me 'this is not a technical, but a political issue," which is pretty much what

President Correa also said in his London speech on 27 October 2009. The two

proposals under study (developing the oil fields or keeping the oil in the ground) thus

illustrate both the politics of negotiating trade-offs between conservation and

economic development, and the great difficulties met by actors arguing for the

economic recognition of the value of cultural and biological diversity. If the latter's

difficulties are partly due to a lack of accepted economic tools to carry out the

calculations that such values call for, they are also due, I wish to argue, to a lack of

moral acceptation, although this may be changing with the Yasuní-ITT Initiative's

greater official endorsement and international recognition.

    When examining comparatively the interests, claims, discourses and values of

government officials, business leaders, international development planners,

intellectuals, indigenous representatives, and activists involved in defining the

Yasuní's future economic use I was able to talk to, I was struck by how important

ideas of fairness, right and good was to them. Their support for the conservation of

the Yasuní (Option One) or the development of the ITT oil and gas fields (Option

Two) was morally framed. And although the government was already officially

backing Option One at the time of my field inquiry, a majority of informants who

backed Option One where really unsure about its legitimacy. Why, I began to wonder,

is extracting oil seen by many as more legitimate (or realistic) than keeping it in the

    The dream of a transition from an economic model based on extraction ('oil is

not produced, it is extracted,' as an informant put it) to one based on conservation and

eco-logical use (as opposed to 'il-logical'use, as activists pointed out) is seen by many

as just this: a dream. Few people I talked to between 2005 and 2007, even enthusiastic

supporters of Option One, actually believed that such a dream could become reality in

Ecuador or elsewhere, for that matter. People were aware of a change of

consciousness in the world, and of the fact that what was seen as a hippy craze just a

few years before was now receiving official endorsement. But official endorsement

and public support was often perceived to be lukewarm, hesitant, or partial. When I

distributed copies of the New Internationalist issue dedicated to the Yasuní in Quito,

Coca and Puyo in July 2008, there was some amazement that a small corner of the

Ecuadorian Amazon would make international news. Although more research is

needed, ethnographic work began to reveal gaps between the diverse constructions of

the Yasuní's worth in the various places where I collected data.

    The level of cynicism I encountered both in Ecuador and in the UK surprised

me. A significant number of people I spoke with thought that Correa had nothing to

loose in promoting ITT Option One, while continuing talks and negotiations with

Petrobras and other oil companies. "When he will finally decide for Option Two," I

was told, "it is not the government of Ecuador who will be blamed, but the

international community, who will have failed to back up financially the

government's favoured proposal." Scepticism was also widespread among the

international Climate Change activists and CDM promoters I interviewed. Some told

me that the Ecuadorian state is too corrupt, weak and unreliable to support such a

long-term proposition. Others saw it as debt cancellation in disguise - which they

disapproved of. As Eckersley (2004) points out, environmentalists often express a

profound mistrust of governments. Several informants also pointed out that the

Yasuní proposal cannot reduce the overall global CO2 emissions, as demand is not

affected by where CO2 originates from. The need to burn oil will not go away, and

CO2 not produced by Ecuadorian oil will be produced by alternative sources.

Unfortunately, I did not have the time to discuss with them the global need to reduce

emissions. International development experts I interviewed found the proposal

morally dubious on other grounds: money captured by Ecuador in this way will not be

used for needed development efforts elsewhere.

     Not every one agreed that to leave Yasuní oil in the ground is, as an

interviewee told me, "an act that shows not only dignity, but, above all, solidarity."

Some informants saw it as morally legitimate to develop by producing oil. The term

'sacrifice' was used in contested ways. Whereas some spoke of not sacrificing the

ecological wealth pertaining to future generations, others mentioned the sacrifices

needed to produce the revenues that will grant health and education for the benefit of

poor, sacrificed citizens. "Dignity," I was told, "means that one should live from

one's honest productive work. To leave oil in the ground and beg for subsidies is the

same as choosing to remain unemployed and seek unemployment benefit." "Yasuní

oil belongs to all the citizens of Ecuador; it is national wealth, the most precious good

of the nation. Every one is aware of its role in the country's modernization and

economic survival in the globalized world."

     Seen as an essential good rather than a commodity, oil is priced politically as

much as economically. Oil prices do not simply translate in money terms a value

purely set by the workings of the market; they express political choices. For instance,

if up to now Ecuadorians have tolerated rises in the price of petrol for cars (but violent

protests have been organized by truck and bus drivers), they vehemently oppose the

end of subsidies for liquefied bottled cooking gas, and the government had to back off

on that particularly unpopular measure. The dominant moral frame seems to assert

that oil extraction is real work, and tangible production. As long as oil is controlled by

the state and not 'stolen' by private foreign companies, as it occurred in the past with

Texaco and Oxy, then oil is an economic activity that creates the nation's wealth. I

found among my Ecuadorian interviewees a renewed nationalist sentiment calling for

extractive economic activities to be controlled by the state. This moral discourse was

also present among indigenous leaders exploring models of co-management and coparticipation for the oil extracted within their territories. There is no place here to

discuss Huaorani understandings of the old and new carbon values or their responses

to outsiders' projects. However, they too illustrate the continued force of indigenous

cultural creativity and will to identity, and as such, constitute a central element of the

region's development futures (Rival ms).

     Opinions in Ecuador were also influenced by the fact that, despite its official

backing, ITT Option One was still perceived to be a utopian project promoted, not by

a broad civil society alliance, but by a radical NGO, Acción Ecológica. Nevertheless,

its popularity seemed to be greater than any other campaigns launched by the

environmental movement. In 2007 and 2008, a rich and evolving debate within

activist circles was feeding positive moral arguments to the Option One team. The

fact that Ecuador's external debt is five times the size of the capitalization fund being

envisaged was widely discussed. Renegotiating only 30% of the external public debt

compared with the Ecuadorian plight. An informant remarked: "Norway did not have

an external debt," and another added: "We would be a different country if we had

done what Norway did way back in the early 1970s."

     All these discussions and reformulations illustrate the creativity sparked by

ITT Option One, as people are re-imagining money owed by the country, possible

earnings, and forgone income in a whirl of rethought economic models and forms of

exchange (ecological debt, debt cancellation, debt swap, bonds, eco-taxes, loans,

mortgages, capital, interest, payments for services, and so forth). Through these

reworkings, activists and experts are careful to stress the fact that an international

fund to keep oil underground is a novel mechanism, which should not be confused

with the sale of reserves, or the sale of environmental services. It is a compensation

payment for what Ecuador ceases to receive as a result of its commitment to a politics

of global responsibility. Discussions around the term 'compensation' reveal diverging

moral frames. As mentioned earlier, the motion voted by the German Bundestag states

that Ecuador asks the international community to make compensation payments "in

exchange for protecting the ITT and leaving the oil in the ground – with permanent

safeguards to be enshrined in binding international agreements," thus implying that

these payments are compensating a service of protection. In their interventions,

Alberto Acosta and Rafael Correa reframe compensation as a contribution linked to

the concept of international co-responsibility. This is very different from the

perception that Ecuador is trying to rid itself from its external debt, or from the idea

put to me by a British journalist that "the international community would pay Ecuador

an annual fee (my emphasis) equal to about half of the total cash it would generate

     For those who support the ITT Project, preserving the Yasuní National Park

from destruction is clearly in the national interest, but the proposal is nevertheless

'internationalist.' The international trust fund attached to the Yasuní Initiative would

express international solidarity in combating climate change and protecting the earth's

biodiversity (see Larrea and Warnars 2009). The internationalist intentions of the

Yasuní proposal are reflected in the following quotes from Ecuadorian informants:

- 'We are creating a new public good for the world.'

- 'This is a south proposal, it has nothing to do with CDM.'

- 'We are not playing the market, this is prevention.'

The following remarks collected during interviews and meetings further illustrate the

influence of 'global leaders' and 'global events' on people's views of

internationalism, debt and co-responsibility:

- 'We could never have proposed this and be taken seriously before Al Gore's

intervention, before he changed people's consciousness.'

- 'He (Nick Stern) made us see how serious Climate Change is, we need to go beyond

Kyoto because the economic cost of climate change is serious; the crisis is as serious

as what happened during the two world wars or the great depression.'

- 'We want Ecuador to be a leader in combating Climate Change, not to be – yet again

- at the receiving end of mitigation aid.'

- ' We refuse the paternalism of international aid agencies and their "mitigation

- ' The World Bank has three funds amounting to US$ 3 billion to mitigate global

warming; other aid donors are following. What change will this money create?'

- 'What makes our proposal serious is the political will behind, the will to change our

development model, to look for an alternative mode of developing a small southern

economy, and base our future on sustainable resource use.'

- 'Our model is replicable in other south countries, they can adopt it.'

 

7- CONCLUSION:

The Yasuní-ITT proposal is still being developed, and the battle in Ecuador between

Option One and Option Two acute. I offer these ethnographic reflections as a modest

contribution to the complex reflection on wealth, capital, property and value that

necessarily underpins the public debate. An anthropological study of ecosystems

services in the Ecuadorian Amazon - and elsewhere - enriches political economy

analyses, as we are dealing with values, and not mere technical solutions (Rival ms).

     A first lesson to be gained from the Yasuní-ITT proposal, as I hope to have

shown, is that the protection of ecological wealth brings economics and politics even

closer than setting oil prices does. In the Yasuní, the expanding world of carbon

and biodiversity commerce is speedily transforming local and national values. Public

perception of the relative value of oil and biological and cultural diversity are

changing. If oil as a strategic non-renewable natural resource is morally valued partly

as a good and partly as a commodity, this is also true of biological diversity, although

this form of wealth is seen as having a much more intangible value. Moreover,

ecological value is made to exist in contrast to oil or other commodity values, for

instance timber. In short, although both are perceived to be of a very different, indeed,

contradictory nature, they are nevertheless equally treated in practice as part-goods/

part-commodities. By granting too much value to oil as a commodity, the true value

of natural wealth, it is feared, will not be fully realised. By recognising natural wealth

at its just value, it is hoped, the real cost of oil, which is not reflected in its market

price, will be made visible. If oil, as a commodity, can be measured in terms of

standard economics (supply and demand in world markets that have evolved over the

last 150 years or so), what is the just value of biodiversity? It is much more uncertain,

and needs to be measured in terms of a new kind of economics. Ecotourism is often

mentioned as a major 'environmental service' by the proponents of ITT Option One

(Larrea 2006). However, ecotourism may be one of the ways in which the expanding

world of commerce continues to transform the value of the Yasuní National Park. For

indigenous leaders, defending the park and its biodiversity is inseparable from

defending the good life (Sumac Kawsai, as recognized in Ecuador's new

Constitution), that is, a form of development in which economic value is fully

encompassed by social value.

     If price setting for an essential commodity such as oil is highly political, price

setting for biodiversity, which has not yet - and perhaps can never - be commoditized,

is even more value-laden, hence political. Social actors involved in developing the

Yasuní-ITT initiative challenge the validity of treating all living things as

exchangeable. For many of those involved in promoting the conservation of the

Yasuní, the relationship between humankind and nature should not be reduced to

narrow self-interest or cost-benefit calculations. Placing a monetary value on

biodiversity in order to ensure its protection through the production and trading of

ecosystem services is problematic. These actors prefer to view the environment as a

collective good that requires political democratic decisions. Some actors argue that

using environmental standards is the most effective way of protecting the

environment, while others stress that economic methods of regulation need to be

supplemented with administrative and legal methods of control. For all actors

involved, however, in the current environmental crisis, conscious collective choices

must be made, which cannot be left to the dictates of the market.

     Although numerous theoretical issues have yet to be solved, social actors

involved in the Yasuní-ITT initiative are actively applying new analyses of value

formation and developing new methods for environmental valuation, which clearly

demonstrate that reducing the emission of greenhouse gases - particularly carbon -

and protecting and conserving the diversity of biological life in tropical rain forest

areas is no more utopian than extracting heavy crude from protected areas. If making

the values of nature an integral part of collective choice and decision-making and

attempting to reflect them in real economic transactions are today part and parcel of

development decisions in a developing country such as Ecuador, what makes such a

decision-making process conflictive is that value can only be realized where property

and use rights are clearly defined and enforceable. Many Ecuadorian researchers,

analysts and commentators (Narváez 2009) point to the ambiguous role played by the

state - some mention its powerlessness - as the real cause behind the indecision

between relying on a known world commodity such as oil, or taking the risk of

developing a new economy based on the value of biodiversity. As I hope to have

shown here, broader shared moral values play an important role in shaping decisionmaking and trade-off politics.

     Studies in economic and political anthropology have shown that the mapping

of functions onto institutions occurs through complex historical processes structured

by social values (Gudeman1990, 2001, 2008, 2009, Gregory 1982, 1997, Graeber

2001). One of the most important insights resulting from these studies is the

realization that short-term and long-term exchanges are of an entirely different nature.

While short-term exchanges bear much resemblance with what we know as market

transactions between unrelated individuals, long-term exchanges are embedded in

norms, institutions and value systems that ensure the reproduction and continuity of

society as a whole over time. In our society, these norms, institutions and values are

distributed across a range of legal, political and religious entities, and particularly

identified with the state. For those who see the environment as a collective good that

requires democratic decisions, economic methods of regulation must be supplemented

with administrative and legal methods of control. Social anthropology, based as it is

on the ethnographic reporting of the minutiae of everyday life experiences and

ordinary understandings of the world points to the inseparability of politics and

economics, even in a complex, divided, and specialised modern societies. An

anthropological outlook makes comprehensible the fact that the innovative models

and calculations created by economists concerned with market failures and their

negative impact on both the natural world and the welfare of societies not only need

to win their place in the science of planning and policy, but also in the hearts of the

 

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[1] Between March 2005 and July 2008, public opinion on the idea of keeping the Yasuní oil in the

ground evolved noticeably, as the idea became gradually more acceptable and less utopian. I also noted

during my short visits to Coca over the same period of time a growing scepticism among the population

about the benefits of oil, which struck me as a real departure from the pro-oil enthusiasm I had known

in the late 1980s and early 1990s. One limitation of this research is that I was not able to follow

systematically the evolution of thinking about the Yasuní Initiative among the people I interviewed and

spoke to during my ethnographic research, which took place at the very beginning of its endorsement

[2] Infolatam 11/11/09, available at http://www.infolatam.com/entrada_impresion.jsp?id=17197,

accessed on 14/11/09. Several interviewees told me that the economy of Ecuador suffers real setbacks

when the price of a barrel of oil falls under US$ 100 a barrel, and that, ideally, a barrel of oil should

http://www.eluniverso.com/2008/09/09/0001/9/745478B006D4476EB1968AFE316274BD.html

[4] Infolatam (AFP)12/07/08, 14/10/09.

[5] OPEP has assigned a quota of 520,000 barrels a day for Ecuador. El Universo, 09.09.08.

http://www.eluniverso.com/2008/09/09/0001/9/745478B006D4476EB1968AFE316274BD.html

[6] Infolatam, 11/12/2009, accessed at http://www.infolatam.com/entrada_impresion.jsp?id=17821, on

[7] OCP, built between 2001 and 2003 and operated by a private consortium.

[8] Primary products represent 90% of exports, mostly composed of oil, bananas, shrimps, coffee,

cacao and flowers (Larrea 2006).

[9] In 2008, 60% of the 508,000 barrels produced every day in Ecuador were owned by PretoEcuador,

who also owns 2.055 million out of the estimated four billion barrels of crude oil reserves. El Universo

[10] Petrobras had already won the right to exploit the neighbouring Block 31 (see Map 2), although its

environmental licence had yet to be approved. This agreement was said to be worth at least US$ 1

[11] It is said that Correa's administration has opted for political reasons to partner with state oil

companies, rather than private sector companies. See

http://www.gasandoil.com/goc/news/ntl73090.htm accessed on 7 July 2008.

[12] By comparison, the light oil extracted by Texaco in Lago Agrio in the 1970s was of 28 IPA grade

(C. Larrea, Personnal Communication, 17 April 2008).

[13] Created in 1953, the Brazilian state company Petrobras is today the third most important Latin

American industrial company. It also operates Block 18, and is part of the consortium operating the

[14] See http://www.saveamericasforests.org/ http://www.sosyasuni.org/en/index.php and

http://www.amazonwatch.org/amazon/EC/yasuni/ accessed on 7 July 2008.

[15] This agreement was signed between Petrobras and ONHAE (Organization of the Huaorani

nationality of Amazonian Ecuador) in 2005. The fund went from 300,000 US$ to 600,000 US$.

[16] On Ecuadorian and international legislation regarding EIAs, the right to information and

participation in projects occurring in one's land, and the right of free, prior and informed consent for

indigenous peoples, see Kimerling (2002: 542-544, 588-596) and Rival (1997). The 2002 Reglamento

de Consulta y Participación para la Realización de Actividades Hidrocarburiferas establishes a

mandatory consultation process before the signing of new leases and before the approval of

Environmental Impact Assessments (EIAs), but the problem with this regulation is that it does not

make consent mandatory. A lack of consensus does not translate into the suspension of the consultation

process, and there is no right of veto.

[17] See http://www.saveamericasforests.org/Yasuni/Petrobras/index.html accessed on 7 July 2008. An

environmental licence was finally granted to Petrobras for Block 31 in October 2007. Finer et al (2009:

12) report that Block 31 is now operated by PetroAmazonas, a subsidiary of PetroEcuador.

[18] For studies of oil field formation waters and their toxic levels, see Kimerling (2002: 538, 596). For

a different version of the conflict between Petrobras and the park's authorities, see Fontaine (2007) and

[19] Shell actually perforated the first ITT well in the late 1930s (C. Larrea, Personnal Communication,

[20] The fact that two fields are located in the area inhabited by indigenous people in voluntary

isolation (see below) is another reason why it will not be possible to exploit the reserves to their full

capacity (Finer et al 2009: 11).

[21] Carlos Larrea, Personal Communication, 17 April 2008. For a slightly different calculation of

projected costs and benefits, see the summary given by Julio Cardenas from PetroEcuador during the

workshop held in Quito on 21-23 November 2007, available at

http://www.eartheconomics.org/yasuni2007/index.html, accessed on 10/11/09.

[22] Weigerther and Maldonado (2006: 108) conjecture that Gutiérrez's intention was to circumvent

PetroEcuador (who claimed a 30% participation in the project), and present ITT as a new concession

fully opened to direct foreign investment. PetroEcuador would thus be forced to create a block to be

leased to multinational and foreign energy companies.

[23] See also Alberto Acosta's interview by Yásser Gómez, in which he declares that IRRSA

corresponds to the logic of 'development' offered by the extractivist model of transnational capitalist

accumulation. These new transcontinental channels of communication and transport "do not try to

integrate our societies, but, instead, seek to integrate our economies to the world market." The

interview, published on 10/09/09, is availaible at http://www.ecoportal.net/content/view/full/88404,

[24] The list can be found at http://www.yasuni-itt.gov.ec/.

[25] http://www.yasuni-itt.gov.ec/imprimir_contenido.asp?id_page=77

[26] I was told that in late 2009 UNDP was helping the Ecuadorian government to set up the Trust

Fund. See http://www.elciudadano.gov.ec , accessed on 14/10/2009, and

http://www.dw-world.com/popups/popup_printcontent/0,,4431992,00.html accessed on 14/10/2009.

[27] According to Larrea (2006), carbon dioxide emissions went up by 55% between 1980 and 1999 in

Latin America. He estimates that ITT reserves will emit 375 million tons of carbon dioxide, a figure

that does not include the CO2 released through deforestation, which, when added, would bring the total

to at least 500 million tons (these figures were given during a seminar in Oxford on 24/4/07). In his

speech on 27 October 2009 at Chatham House, London, President Correa mentioned the figure of 410

[28] These calculations are based on a marginal cost of extraction for each barrel of crude (US$ 2-7

according to BP) and of cost of one ton of CO2 of US$ 20 (using the World Bank's figure), which

gives an estimated value of US$ 5 for each barrel left in the ground.

[29] The Yasuní National Park was also declared a world centre for plant diversity and endemism

under the Joint IUCN-WWF Plants Conservation Programme and the IUCN Threatened Plants Unit,

and classed scientifically as a Pleistocene refuge (Rival 1993).

[30] See http://www.unesco.org/mab/mabProg.shtml accessed on 7 July 2008.

[31] Finer et al (2009: 12) similarly note that "the new Ecuadorian Constitution, approved by voters in

September 2008, initiated a prohibition on oil extraction in protected areas such as Yasuní National

Park. An exception was built-in, however, that would allow such drilling to proceed if petitioned for by

the President and declared of national interest by Congress."

[32] Or CGY. One CGY has been calculated to equal 1 metric ton of carbon dyoxide.

[33] The seemingly unavoidable link between carbon and biodiversity values is also illustrated by the

fact that Norway is able to finance major conservation activities thanks to its Petroleum Fund, such as,

for instance, its International Climate and Forest Initiative, which benefits from an annual budget of

close to US$ 3 billion. Oil royalties have also allowed Norway to take the initiative of funding UNREDD's first three years of activity single-handedly. See

http://www.regjeringen.no/en/dep/md/Selected-topics/climate/the-government-of-norwaysinternational-.html?id=548491, accessed on 10/12/09.

[34] New Internationalist 413, July 2008.

[35] An opinion survey conducted in Guayaquil and Quito showed that 58% of respondents were

favourable to ITT Option One, thus reflecting a large popular consensus in Ecuador. Carlos Larrea,

Personnal Communication, 17 April 2008.

[36] In 2008, the Ecuadorian government launched an inquiry in the legality of the bonos Global and of

loans contracted with the Brazilian development bank BNDES. The external debt was reduced to less

than 20% of the GDP. See Alberto Acosta's interview by Yásser Gómez published on 10/09/09 at

http://www.ecoportal.net/content/view/full/88404, accessed on 23/09/09.