Date: 16-Sep-10
Country: ECUADOR
Author: Hugh Bronstein

Ecuador is launching a one-of-a-kind initiative to protect a jungle reserve that contains not only a huge variety of plants and animals but 20 percent of the country's crude oil.

In exchange for not drilling for crude in a 200,000-hectare area of Yasuni national park, the government is asking rich nations, foundations and individuals to give it $3.6 billion.

That's about half of what President Rafael Correa says Ecuador would get from drilling in this part of Yasuni, where the Andes mountains intersect with the Amazon rain forest.

It is a new approach to conservation and officials recognize that they might not find enough support for the initiative. But if it works, Ecuador says 407 million tonnes of carbon dioxide would be kept from entering the atmosphere.

Ecuadorean officials are flying around the world this month -- including trips to Japan, Germany and the United Nations -- meeting with prospective contributors to drum up support.

Yasuni as a whole covers an area of 982,000 hectares and is home to a huge array of birds, monkeys and other wildlife including jaguars, giant armadillos and pink-colored dolphins.

The initiative applies to three oil fields called Ishpingo, Tambococha and Tiputini, and collectively known as the ITT section.

Other parts of the park are already being drilled for petroleum, but many residents support the government's push.

"We don't want more oil because of the contamination," said 19-year-old Fani Imene, who is from the local Waorani tribe and lives just outside the ITT section.

Many in her 2,500-member indigenous group are afraid to drink from rivers if oil wells have been drilled nearby.

A $27 billion environmental damages suit is being heard in a neighboring province, where residents say that U.S. oil giant Chevron is responsible for polluting the jungle with faulty drilling practices.

This and BP's recent Gulf of Mexico oil spill disaster could bolster Ecuador's pitch for the ITT initiative.

FIRST CONTRIBUTIONS

Ecuador will issue certificates to contributors promising their money back, without interest, should the country ever decide to exploit the oil.

Officials say the first wave of contributions is likely to come from countries such as Germany and Spain. Chile is expected to contribute $100,000 this week, making it the first official donor to the initiative.

Other prospective contributors are expected to pay close attention to the certificates' fine print given that Ecuador has a long history of political instability and defaulted on its international bonds in 1999 and 2008.

"You need a substantial legal framework that can give you the necessary assurances," said Peter Linder, Germany's ambassador in Quito. "We will start talking details this month. One of the main questions will be the guarantee that the project will be sustainable."

Ecuador, a member of OPEC, has given itself until the end of 2011 to raise $100 million in seed money that the government says is needed to make the initiative viable.

"If we don't have $100 million in the fund by the end of next year we go to Plan B, which would be to refund whatever money we have collected and proceed with exploiting the oil in the ITT section," said Tarsicio Granizo, a senior official at Ecuador's heritage ministry.

The fund is to be administered by the United Nations Development Program, which is encouraging oil-rich countries to refrain from drilling in environmentally-sensitive areas.

Ecuador wants to collect the full $3.6 billion by 2024.

MAGIC GARDEN

"There are more species of trees in Yasuni than in all of North America," said Pablo Jarrin, director of the Yasuni Research Station, which is part of Ecuador's Catholic University and monitors the region's biodiversity.

The park is located on the equator and enjoys consistent sunshine and rain while the region's complex network of rivers creates natural barriers that separate groups of plants and animals, encouraging them to break off into separate species.

The nearby Andean mountain chain makes for steep terrain that also promotes the differentiation of species.

"These three factors interact to give us a region that is probably the richest in biodiversity in the world," Jarrin said. "The park can be seen as a kind of magic garden that contains plants that cannot be found anywhere else."

The government says contributions to the ITT initiative would be used for conservation and reforestation efforts and to fund poverty reduction efforts in the Amazon, which is Ecuador's poorest region despite the area's vast oil wealth.

Money donated will also go toward fuel efficiency initiatives and developing alternative energy sources.

But these programs are not foremost in the mind of Imene, who says she just wants to bring up her six-month-old daughter the way she was, surrounded by the sounds and fresh air of the forest and with her Waorani culture intact.

"For us," she said, "that's what the initiative is about."

(Editing by Andrew Cawthorne and Kieran Murray)

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