Forestry Investment Blog

The Cannes Film Festival takes place this month and that is where a company in Ecuador is planning to take its innovative forest carbon financing initiative in the hope of showcasing the project to prospective investors. It might just be me but surely a film festival is an odd place to present a forest carbon initiative but they might find a potential investor in the ‘Avatar’ director James Cameron who was in Brazil recently campaigning against the Belo Monte dam.

To preserve tracts of the Ecuadorian Amazon rainforest that hold lucrative oil resources ripe for exploitation carbon bonds will be created by the Yasuni-ITT Initiative. These carbon bonds will be issued by the government with a guarantee that oil won’t be extracted from the Yasuni National Park, with the forest, its biodiversity and way of life untouched for indigenous groups preserved.

However this is contingent on the bond sales raising enough to replace at least half of the $7 billion that the government will lose out on in oil licence royalties. The success of this initiative would deliver 407 million tonnes of emission reduction savings, which would mainly come from the avoided extraction and burning of 846 million barrels of oil under the reserve.

Interpress reports, which would be set up to issue the carbon bonds in the terms of an international trust fund were approved earlier this month by Ecuadorian President Rafael Correa. In the meantime government officials and environmental groups are investigating reports that oil interests are defying a ban on extraction activities in the southern ‘untouchable zone’ of the Yasuni National Park. This does beg the question then that if the Yasuni-ITT Initiative is successful in raising the funds what is to stop other oil companies defying more government bans? According to Accion Ecologica, a local environmental group the construction of an oil pipe line into the park from existing oilfields outside the park has already begun.

So far Germany and Spain have already indicated support for the Yasuni preservation fund and some funding commitments have been made. Of the Western world’s rich and famous those said to be supporters are: Mikhail Gorbachev, Daniela Mitterrand, Prince Charles, Leonardo di Caprio and Desmund Tutu.

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