Topic 3 - Yasuni-ITT Project

Challenges and Opportunities from Yasuni-ITT

Imagine you are a Program Officer at the Moore Foundation, working within the Andes-Amazon Initiative. The Moore Foundation is concerned that the Yasuni-ITT (Ishpingo-Tambococha-Tiputini oil field) experience demonstrates a global inability to raise enough funds to protect tropical forests. You have offered to prepare a report that outlines the lessons learned from Yasuni-ITT’s failure. Below are key questions to help guide your analysis and reporting. Refer to the provided article and podcast links for the context and insights.

• Planet Money, NPR, “Holding a Rainforest Hostage”
• The Guardian, “Yasuni National Park: We want to give it as a gift to humanity”
• Jayant Gandhi, “Holding trees hostage: Ecuador’s attempt to share costs of preserving the Amazon”

1. Challenges of Public Goods Provisioning in Yasuni-ITT

Why Was Yasuni-ITT Unable to Secure $3.6 Billion?

• Use collective action theory, as outlined in the article and podcast, to explain why Ecuador’s Yasuni-ITT project was unable to raise the requested $3.6 billion. Consider issues related to the nature of public goods, trust among international stakeholders, and collective action barriers.

Factors Contributing to the Funding Gap:

• Consider issues related to the characteristics of public goods, such as non-excludability and free-rider problems.
• Reflect on the role of international cooperation and whether the incentives aligned for major donor countries.
• Think about the perceived risks, uncertainties, and the challenges in convincing the global community, as described in the podcast, that influenced donor reluctance.

2. Economic Analysis of Yasuni-ITT’s Conservation Challenges

Marginal Cost and Marginal Benefit Analysis:

• Discuss how Ecuador’s decision to forgo oil extraction in Yasuni-ITT can be understood through the lens of marginal cost and marginal benefit. Consider the article and podcast’s mention of the significant oil reserves and the implications of this for a relatively poor country dependent on oil revenue.

Evaluating Conservation vs. Oil Extraction:

• How do the marginal costs of conservation compare to the potential benefits of oil extraction?
• Reflect on how the opportunity cost of forgoing oil revenues might impact conservation decisions, especially given the context of Ecuador’s need for basic infrastructure and services, as highlighted in the podcast.

3. International Perceptions of Yasuni-ITT Payments

Perceptions of Requested Payments:

• Reflect on whether the payments requested by the Ecuadorian government were viewed as rewards, incentives for positive action, or as ransom or extortion. How does the article and the podcast describe international reluctance to contribute, and how might the lack of trust and perceived risks have influenced willingness to support the initiative?

Impact of Perceptions on Willingness to Contribute:

• How might international perceptions influence donor countries’ willingness to contribute, considering the skepticism expressed by some countries in the podcast?

Broader Implications for Global Conservation Efforts:

• How could the success of the Yasuni-ITT initiative have affected other developing countries’ willingness to invest in their own conservation initiatives?

4. Lessons for Future Conservation Initiatives

Encouraging an Effective Conservation Model:

• What lessons can be learned from Yasuni-ITT to better design future conservation projects?
• How might international cooperation be improved to overcome the challenges of public goods provisioning in tropical forest conservation?
• Consider the insights from the podcast about the importance of creating trust, setting realistic expectations, and framing the initiative in a way that appeals to the international community.