Opportunity Cost: Saving Ecuador’s Rain Forest
Should the world pay Ecuador to preserve its rain forest?
Here are 2 answers from a Time journalist:
“The Yasuni plan would be a first for global environmental policy: recognition that the international community has a financial responsibility to help developing nations preserve nature.”
“Of course, from another perspective, the Yasuni initiative might look like environmental blackmail: Pay us or the forest gets it.”
Here is the story:
Ecuador’s Yasuni National Park has been called an “ecological bulls-eye.” Home to 150 frog species, 655 tree species, 200 mammal species–more species than anyone could imagine–the park covers almost 4000 square miles. The only species you could have trouble finding is people. Almost uninhabited, only 2 isolated tribes live there.
What to do, then, about the oil?
Huge reserves lay beneath the Park’s surface. A deforestation process would begin when roads and pipelines were bult. It would continue with the influx of people that a transportation infrastructure woud facilitate.
To preserve its rain forest, Ecuador has asked the world for half of the oil revenue it is willing to forgo. Totaling $360 billion, the money, if raised, would be used for green-related projects in Ecuador. But progress has been slow. As of last year, the fund had $200 million from assorted countries and individuals.
Ecuador might be having a tough time raising money because some people believe their approach establishes a bad precedent. Others look to Ecuadorian politics. From 1996-2006, they had 6 presidents and 2 constitutions. In 2008, Ecuador’s president said that the country’s national debt was illegitimate. Furthermore, when I visited the UN site that runs the fund, its revenue spreadsheet had no entries—just a note saying it would be updated during April 2014.
Is the world helping itself by enabling a developing country to preserve a resource? Or, is it contributing to a scheme doomed to failure and corruption?
We could analyse the dilemma with some opportunity cost logic. Just list the benefits of supporting the fund and the benefits of opposing it. Then, whichever you select, you sacrifice the other alternative and its benefits.
Please let us know what you think.
Sources and Resources: The most extensive descriptions of Yasuni were in this National Geographic article and the Time article from which I got my quote. It also was interesting to see the UN site for the fund, here, and to learn here, that financially struggling euro zone nations have been donors. And finally, a hat tip to NPR’s Planet Money.