The Pre-Columbian Amazon – A Pristine Rainforest Or Intensive Settlement?

For our last agricultural history lecture, we were fortunate to receive a guest speaker from the department who is involved in a mammoth project of mapping the world’s food systems across time. What an interesting pastime, but what a challenge! This is what I referred to in my last post – one of the off-hand … Continue reading The Pre-Columbian Amazon – A Pristine Rainforest Or Intensive Settlement?

Drilling in the Rainforest – Is it Worth It? Our Yasuni CBA

Well, after another couple of hours of editing (why does the final version always take so long to get consistent? And why did we nearly forget to include our most important source in the bibliography? Questions…) I finally sent off our Cost Benefit Analysis project to our teacher and thought that since my friend and I had put so much work into it, it’d be cool to share our results in a little more public way – for example, here!

For this project, the story begins around 2007 when Ecuador found its second-largest unexploited oilfield with estimated reserves of around 920 million barrel. The catch? It is sitting right under the region’s largest untouched rainforest, the Yasuni National Park, which is unrivalled in biodiversity – in one single hectare of the park, you’ll find more tree species than in all of Canada and the US combined; it harbors around one-third of the Amazon’s reptile and amphibian species in only 0.15% of its territory, and is home to several mammals on the brink of extinction.

Long story short, as I wrote before, the Ecuadorian government decided to give up on its novel project called the Yasuni-ITT Initiative, where it offered to leave the Yasuni untouched if the world community were willing to pay it part of its opportunity cost (the global community did not step up to the challenge) and announced in October that it would start drilling.

Our research question was whether this decision to commence drilling for oil in the Yasuni National Park is economically justified or not, if you take into account all the costs to society involved. To cut to the chase – it depends (economists’ favorite answer, ever). And cost benefit analysis (CBA) is complicated.

In order to do a proper CBA, you need to first estimate all impacts resulting from the project under consideration, then place a dollar value on each and every impact, and finally discount your results over time (we’ll come to that in a minute). If you’ve done everything correctly, in the end you will have a net present value of the entire project that is either positive or negative – depending on whether it would result in a net benefit or loss – and are all the wiser as to whether the project should be implemented or not.

What’s this view worth? And sorry, ‘invaluable’ is not an option in cost-benefit analyses.
Image by Flickr user sara_y_tsunki, via Flickr CC.

Continue reading “Drilling in the Rainforest – Is it Worth It? Our Yasuni CBA”

What’s the Value of Not Drilling? The Sad Truth from the Yasuni Experiment: Not Enough.

Before I even had this blog, I was writing about an awesome idea that could have redefined how we approach sustainability trade-offs. The story is about the Yasuni National Park in Ecuador, a vast space of virtually untouched rain forest under which large oil reserves had been found.

The Yasuni is one of the last truly virgin forests; to get to the area where the oil can be found, you have to take a plane, then a motorboat, then a canoe.
Image by Geoff Galice, via Flickr CC.

The Ecuadorian government being the Ecuadorian government (the same one that added the right to food and animal rights to its constitution), it treated this discovery in a novel way, turned to the international community and said this: “We don’t want to destroy this pristine piece of rain forest that helps absorb carbon, regulate atmospheric temperature and serves as an ecosystem to millions of species. We are ready to give up half of the expected net worth of the resource if you supplement the other half so that we can combat poverty in our country.” This, to an economist, sounds like a really fair deal because we are used to thinking about “opportunity costs”, i.e. the costs of not doing something as compared to doing it. In not drilling, the Ecuadorian government is giving up the income it could have gotten from the oil, so asking for half of that amount back makes economic sense.

Unfortunately, the world didn’t think so (I particularly like the title of the article too: “Ecuador to World: Pay Up to Save the Rain Forest. World to Ecuador: Meh.”).

Continue reading “What’s the Value of Not Drilling? The Sad Truth from the Yasuni Experiment: Not Enough.”

Our Green Planet

We live in a world with a wealth of information at our fingertips, and more and more frequently even extraordinary ways in which this information can be presented. Case in point is this video: it showcases data gathered by satellites on the “greenness” of our planet from 2012 to 2013. Check it out and see … Continue reading Our Green Planet

Can A Bamboo Revolution Increase Food Security in Ethiopia?

Whenever we think about food security, we think about grain crops, yields, and whatever ends up on your plate. However, as I already discussed in this post about efficient cooking stoves, we tend to forget that most food (specifically grains) has to be cooked before it can be consumed, so that cooking fuel becomes part of the central equation of households: if you don’t have access to firewood, you will have to buy it; the more people cut down trees, the more expensive firewood (or charcoal) will become; and the more money you spend on your fuel, the less you can spend on your actual food – increasing your household’s food insecurity.

Bamboo has already been part of Ethiopian reforestation projects, but is moving into greater focus with its potential for quick growth and its link to industry projects.
Image by IPP State, via Flickr CC.

Continue reading “Can A Bamboo Revolution Increase Food Security in Ethiopia?”