In the August 20 plebiscite, the majority of Ecuador’s population made the historic decision to bar new oil exploration in an Amazon region responsible for about 12% of the country’s fossil fuel production.
The object of the popular consultation was the fate of Block 43, a group of oil extraction fields located in Yasuni National Park. 59% of the participants voted to end exploration.
The move is in the same direction as Colombia, whose current government seeks to bar new drilling in its territory. However, in other parts of South America, exploration continues to advance, and there is a strong defense that such resources are fundamental for growth and wealth generation.
The issue has generated a split between the Amazonian countries, especially on the part of Colombia, culminating in a conclusion seen as vague during the last Amazon Summit, held in early August. At that meeting, the government of President Gustavo Petro sought an agreement for the prohibition of new oil exploration in the Amazon, which was especially rejected by Brazil.
Latin American Oil Champion
The government of President Luiz Inácio Lula da Silva even aims to expand production in the Equatorial Margin in the Amazon, which has generated controversy with some of the current management and experts in the area.
On August 22, the Attorney General’s Office (AGU) published an opinion concluding that the preparation of an assessment does not prevent President Obama from granting an environmental license to explore for oil and gas at the mouth of the Amazon River.
Since 2017, Brazil has been the largest oil producer in Latin America and reported a record 4.324 million barrels extracted per day.
In 2022, hydrocarbons were the second-largest source of Brazilian export revenue, behind only soybeans, with 42.5 billion dollars, or 12.5% of the total exported.
Another member of the Amazon Council that is betting on oil exploration is Guyana, which found vast hydrocarbon reserves in 2015. In 2022, according to the International Monetary Fund (IMF), the country had the highest growth in the world; the 57.8% increase in its gross domestic product (GDP) was largely supported by oil.
Argentina recently chose to advance in the exploration of Vaca Muerta, one of the largest reserves of natural gas and oil in the world.
The project is controversial, including because it involves the technique of hydraulic fracturing, which is considered a high risk to the environment.
In the 2023 presidential election campaign, none of the leading candidates suggested measures that would affect such exploitation.
Rich worry?
A frequent argument against advances in combating climate change in less developed countries is that this should be the responsibility of richer nations, since historically they have emitted the most pollutants.
The director of the Brazilian Center for Infrastructure (CBIE), Adriano Pires, believes that measures such as those in Ecuador and Colombia can reduce the supply of energy, especially in a scenario of high demand and increasing inflation, which would hit the poorest hardest.
In 2019, a fuel price hike following the end of subsidies was the catalyst for a series of protests that gripped Ecuador for weeks. Pires argues that socioeconomic development demands energy and that growth is key to greater equality. Therefore, in his conception, the movement against exploitation would tend to increase poverty.
According to Rystad Energy researcher Aditya Ravi, the Ecuadorian economy depends significantly on exports, of which crude oil accounts for more than 30 percent. The losses from the recent decision could represent almost 1.2% of the country’s GDP, according to their estimates. In addition, he estimates that the decision will have an impact on consumer prices.
The director of 350.org in Latin America, Ilan Zugman, evaluates the plebiscite of August 20, 2023, in Ecuador as an excellent example of popular concern about climate change, since effects such as droughts, floods, or landslides usually affect a large majority of precisely this portion of the population.
“Citizens are demanding greater adaptation initiatives on the part of local governments to contain all these impacts a little.” “It is something that has been changing and is no longer restricted only to the upper and middle classes,” according to Zugman.
The project coordinator of the ClimaInfo Institute, Carolina Marçal, recognizes that the countries of the so-called “Global South,” including Colombia and Ecuador, are among the lowest carbon emitters. However, “the burden and consequences of the climate crisis are unfairly shared by all inhabitants of the planet.” So, whether we like it or not, we all have a duty to take action.
compensation of the developed
To reduce the inequalities caused by the different levels of emissions between developed and poorer countries, it has often been suggested that the former transfer resources to others as compensation.
In 2008, Ecuador’s then-president, Rafael Correa, made a proposal to richer countries not to exploit the Yasuni National Park reserves in exchange for funds. The project did not go ahead, as did some other initiatives, one of which provided for the annual transfer of $100 billion from the richest to the least developed countries to combat climate change.
Marçal hopes that Ecuador’s example can inspire other democracies, especially in rich countries, to deliver on their promises. In his view, a reform of the global financial structure is needed to enable a low-carbon development model in the Global South.
Pires agrees with the view that if “there is an interest in preserving the environment, there must be financing” by richer countries. However, he is skeptical that these funds alone will be able to generate development in poorer nations.
Possible pressures
With a government that values the external image of environmental protection, environmentalists assess that there may be frustration with Brazil in this sphere, especially in the face of recent measures by its neighbors.
To ensure leadership in this position, Zugman assesses that the country “needs to do more; it is not enough just to zero deforestation”: “Brazil needs to make a firm decision and seek to really reduce oil and gas exploration.” He does not see the possibility of using the influence that the country has to lead an initiative of dialogue with the most developed countries and create a pact for the reduction of the burning of fossil fuels.
At some point, President Lula is going to have to really expose himself and choose which side he’s on, whether he’s on the side of the Amazon, the indigenous peoples, the environment, or whether he’s going to stay connected with this
