GLOBAL WARMING:THE CHALLENGE FOR SURVIVAL OF HUMANITY

• Global Warming is a Global Issue and each

country adds to the problem in its own way.

• Developed and emerging economy countries

are responsible for massive Greenhouse Gas

(GHG) emissions.

• Developing countries contribute to the

problem through the destruction of their

renewable natural resources.

ECUADOR TOWARDS A NEW SUSTAINABLE ECONOMIC MODEL

Ecuador is taking the initial steps to move from an oil based economy to a new energy model based on renewable natural resources and to a sustainable management of its biodiversity.

THE ECUADORIAN PROPOSAL:COMITMENT

• Ecuador is committed to leave underground 20% of it’s proven oil reserves (850 million barrels), located on the ITT oil fields, within the Yasuní National Park.

• This will prevent the emission of 410 million metric tons of CO2 into the planets atmosphere.

STRATEGIC OBJECTIVE

Create a financial instrument to support Ecuador’s long term sustainability goals

By providing an economic value to its biodiversity and other natural resources, Ecuador proposes an innovative model to address its development challenges

• The interests of funds obtained through this

mechanism, will be used in pre-determined

projects of the National Sustainable

Development Agenda.

• An international Trust Fund, created for this

purpose, will manage the financial resources

generated by the Initiative

• Major contributors will be represented in the

Trust Fund Board.

INVESTMENT AND CONTROL MECHANISMS

EMISSION OF CGYs

• Ecuador will issue Yasuní Guarantee Certificates ( in Spanish CGYs), which will be considered as equivalent to carbon bonds by the Annex I countries of the Kyoto Protocol (KP) willing to support the Initiative.

• Private companies of KP Annex I countries will be able to buy the CGYs under the European Trading System (ETS) mechanism.

• These certificates will be used as GHG emissions allowances.

USE OF THE CGYs

OTHER SOURCES OF FUNDING

• Donations and debt swaps from countries that

support the Initiative.

• Private sector donations and individual

contributions of global citizens.

NUMBERS THAT MAKE THE YASUNI INITIATIVE FEASIBLE

(October 08)• 850 million barrels will be left underground,

which, valued at the referential West Texas Intermediate (WTI) price of US$ 75, gives a Net Present Value (NPV) of US$11,600 million.

• The non combustion of the ITT oil reduces potential emissions of 410 million metric tons of CO2 which at US$29.00 per ton (current price

ETS/UE), equals US$11,900 million.

• Thus, the amount saved in CO2 emissions has

an equivalent value to that of the oil reserves’ NPV.

NUMBERS THAT MAKE THE YASUNI INITIATIVE FEASIBLE

(December 08)• 850 million barrels will be left underground,

which, valued at the referential West Texas Intermediate (WTI) price of US$ 49,00 gives a Net Present Value (NPV) of US$3,300 million.

• The non combustion of the ITT oil reduces potential emissions of 410 million metric tons of CO2 which at US$19,50 per ton (current price

ETS/UE), equals US$ 8,000 million.

• Thus, the value for the amount saved in CO2

emissions more than doubles the oil reserve value.

CARBON BONDS PRICE VARIATION

STAGES OF THE YASUNI INITIATIVE

• CGYs will be sold in a 10 year timeframe.

• CGYs’ value will be that of the carbon market.

• Total CGYs emissions will be subject to NPV of the oil left underground in the ITT field.

PROJECTS OF THE SUSTAINABLE DEVELOPMENT AGENDA

The effective protection of 40 Natural Areas (12 million acres) that hold the largest biological diversity in the world, the last two indigenous peoples groups in voluntary isolation and 13 million acres of Indian and Afro-Ecuadorian communities. (Totaling: 38% of Ecuadorian territory).

1.

Natural recovery, reforestation and aforestation of 6 million acres of forest, preventing vast areas of monocrops, respecting the lands owned by communities and farmers, ensuring that they become the major beneficiaries of this project.

PROJECTS OF THE SUSTAINABLE DEVELOPMENT AGENDA

2.

Changing Ecuador's energy supply matrix: reduction of fossil fuels for electric generation, replacing them with renewable energy production: hydro, geothermal, wind, tidal power and solar.

PROJECTS OF THE SUSTAINABLE DEVELOPMENT AGENDA

3.

Change in the energy demand matrix, offering subsidies for home and industry sustainable energy technology.

PROJECTS OF THE SUTAINABLE DEVELOPMENT AGENDA

4.

Financing initiatives for sustainable development

through alternative use of renewable resources, ensuring integrated management of ecosystems, reinforcing education and capacity building.

PROJECTS OF THE SUSTAINABLE

DEVELOPMENT AGENDA

5.

This is a proposal for the world to follow, that will allow developing countries to substitute non-renewable natural resources in favor of the conservation of invaluable biological assets.

The revenues of the trust fund will be invested in in long term social and environmental objectives.

1.

2.

ADVANTAGES OF THE YASUNI INITIATIVE

Protection of 25 million acres of the most diverse forests of the world, that represents world conservation record.

It offers platform for other countries of similar economic and environmental conditions to reduce their GHG emissions and to actively participate in common efforts to avoid global warming.

3.

4.

ADVANTAGES OF THE YASUNI INITIATIVE

It prevents, in the long term, an emission of 410 million metric tons of carbon to the Planet’s atmosphere.

It supports the will of two communities to live in voluntary isolation within the Yasuní National Park: the Tagaeri and the Taromenane.

ADVANTAGES OF THE YASUNI INITIATIVE

5.

6.

Guarantees access to clean technology and financial resources to a developing country, setting an example for other countries not yet subject to Annex I.

Provides a new mechanism for post Bali negotiations.

7.

8.

ADVANTAGES OF THE YASUNI INITIATIVE

Creates incentives for collaboration

between industrialized and developing

countries where Certificates of Reduction

of Emission (CREs) and Reduction of

Emissions due to Deforestation and

Degradation (REDDs) can be combined.

ADVANTAGES OF THE YASUNI INITIATIVE

9.

WHAT DOES THE INITIATIVE REQUIRE?

The decision of a pioneer group of Annex I countries to support this creative Initiative, so that the CGYs can be introduced in the carbon market.

PRESIDENT’S COMMISSION FOR YASUNI-ITT INITIATIVE

CONTACTS

ROQUE SEVILLA (CHAIR)

MINISTER OF FOREIGN AFFAIRS

FRANCISCO CARRION

YOLANDA KAKABADSE

SECRETARIAT – GALO ARMAS

For more information contact:

itt@mmrree.gov.ec