From Kyoto to Quito: Reassessing oil moratorium as an effective climate change policy from a property-based approach

Abstract

Leaving oil reserves unexploited has been recently put forward as an innovative climate change policy. President Rafael Correa has announced Ecuador’s decision not to exploit one of its largest oil fields located in the Amazon in exchange for economic compensation from the international community for at least half of the revenue that would have otherwise come from extracting the oil (namely, $3.6 billion). This proposal has been praised for establishing the foundations of the “new economics of planet Earth” and for having the potential to become “a new paradigm for global conservation programs”. This paper criticizes the Yasuni-ITT Initiative by stressing that a property-based approach would have reduced the likelihood that a post-Correa government would decide to disregard the oil moratorium in the future. Instead, I propose three alternatives to Correa’s model, namely selling the oil reserves; paying for the ecosystem services; and establishing a conse rvation easement over the national park. I conclude that the last option is the most effective option.