President Rafael Correa says he has abandoned a unique and ambitious plan to persuade rich countries to pay Ecuador not to drill for oil in a pristine Amazon rainforest preserve.
Environmentalist had hailed the initiative when Correa first proposed it in 2007, saying he was setting a precedent in the fight against global warming by lowering the high cost to poor countries of preserving the environment.
Correa had sought US$3.6 billion in contributions to maintain a moratorium on drilling in the remote Yasuni National Park, which was declared a biosphere reserve by the United Nations in 1989 and is home to two Indian tribes living in voluntary isolation.
But he said last Thursday evening, on August 15, that Ecuador had raised just US$13 million in actual donations in pledges and that he had an obligation to his people, particularly the poor, to move ahead with drilling. The United Nations and private donors had put up the cash.
Correa said he was proposing to the National Assembly, which his supporters control, oil exploration in Yasuni amounting to less than one per cent of its 3,800 square miles.
His no-drilling plan had envisioned rich countries paying Ecuador half the US$7.2 billion in revenues expected to be generated over 10 years from the 846 million barrels of heavy crude estimated to be in Yasuni.
Correa's proposal generated interest but few takers, in part because he insisted that Ecuador alone would decide how the donations would be spent. European countries expressed the most interest but still balked.
Ecuador is an OPEC member that depends on oil for a third of its national budget. The three oil fields in Yasuni represent 20 per cent of its oil reserves.
Indigenous and environmental groups in Ecuador, a nation of 14 million people, have said that any decision on the fate of Yasuni should be made in a national referendum.
Yasuni is not the only oil drilling that Correa's government plans in the rainforest. He is also seeking to auction oil concessions in 13 blocks of 770 square miles each south of Yasuni, closer to the border with Peru.
Oil is Ecuador's chief source of foreign earnings. The country produces 538,000 barrels of crude a day, delivering nearly half its production to the United States.