Lessons from Ecuador

I am amazed at how a country with a per capita GDP of less than $8,000 is showing us, and the rest of the world, model after model for responsible governance. Actually, I take that back. I am amazed at how useless GDP is as a measurement of, well, anything. But that's not really where I am going with this post. Today, Ecuador made international headlines for, yet again, another progressive measure for addressing climate change and the preservation of its natural environment (it goes without saying that the two are interrelated).

You might recall that back in September the country voted to amend its constitution to include a bill of rights for nature. Effectually, this extended the same rights that the country's human citizens enjoy to rivers, streams, forests, animals, etc. This was an unprecedented legal framework, to say the least. You might also recall that Ecuador is host to a lawsuit that thousands of indigenous peoples and farmers have filed against Chevron (to the tune of $27B) for Texaco's failure to properly cleanup from its previous operations. Yes, Ecuador's involvement is somewhat coincidental, however, the public response from its president is not. Rafael Correa has been highly critical of the company's behavior. So much, in fact, that Chevron is contending that they cannot receive a fair trial.

Now, Ecuador is pursuing a plan that will incentivize foreign investment through the sale of carbon offsets. While this concept is not entirely new, the Ecuadorans have put a different spin on it, and one that has the potential to be much more lucrative from both a dollar and carbon mitigation perspective. The reason being that the offsets would not merely be tied to the preservation of the forests. Rather, they would be tied to the preservation of the oil reserves that reside beneath the tropical forests. This would prevent this oil from ever being tapped, extracted, refined, or combusted; thereby preventing an estimated 410M tons of CO2 emissions. What a deal!