ENVIRONMENTAL + ECONOMIC IMPACT

ANALYSIS: ECUADOR AND THE GALAPAGOS ISLANDS

Thomas R. Luebke

What is Ecuador?

■ The Republic of Ecuador is a small state on the north-western coast of South America; includes mainland and Galapagos Islands

■ 51% of Ecuador is Amazonian (La Costa, La Sierra, La Amazonia, La Region Insular)

■ Biological hotspot (Yasuni, ITT)

Where the Oil At?

■ Petroleum fields were discovered in the mostly-Amazonian region of the country in 1967, followed in suit by crew belonging to Texaco and then Chevron. In the ten years following major drilling operations in 1970

■ Ecuador’s GDP shot up from $475.12 USD to $2260.78 USD.■ Since the early 1970’s about 30% of the Ecuadorian Amazon has been

deforested and/or polluted and entire indigenous cultures,■ The Yatsuni-ITT Initiative

Exciting Math!

■ President Rafael Correa said on Tuesday that the South American nation is receiving as little as $30 a barrel for its crude, while production costs average about $39

■ In 2012, Ecuador was averaging 503.6 barrels of petroleum product per day. With this, we can see that, per barrel, PetroEcuador averaged about $204.94 per barrel. Ecuador also averaged a rate of 183.56 hectares of forest degradation per day, 71.23 hectares of which as Amazonian.

■ In 2012, the value of Ecuador’s oil export was at 13,750 ($M)

So, here it is all together■ 503.6 (b/d) / 183.56 (ha) 2.7435 barrels of oil equal the sacrifice of 1 hectare.■ 2.7435 * 204.94 1 hectare is worth $562.256 in production value.

Why This Affects the Rainforest

■ The production level was set noting that for every hectare that is destroyed, Ecuador will have a petroleum production value of $562.256

■ Amazonian lands destroyed to support the oil industry has increased drastically since 2012 due to the ending of the Yatsuni-ITT Initiative.

■ If making around $562.256 to sacrifice a hectare makes the bare minimum of sense, then it makes even less fiscal, ecological, and political sense to lose $9 per barrel in order to sacrifice a larger amount of hectares.

President Correa

■ Elected in 2007■ Auctioned of Amazonian oil fields to pay Chinese debt■ Ended Yasuni-ITT initiative, increased Galapagos tourism/trade routes■ Banned shark-finning, reformed hydrocarbon production■ Perfect example– cares about the environment until it is not

economically feasible

What are the Galapagos?

■ Archipelago, west of Ecuador. We’ve been there you should know this■ Home to thousands of endemic species, currently the chain is an

ecological reserve■ Tourism began in the 1960s, allowing a certain amount of people on

the islands every year■ Current permanent population stands at about 26,000■ Keystone species: Marine Iguana, Sea Turtle, Galapagos Penguin,

Bottlenose Dolphin, Giant Tortoise, Blue + Red Footed Booby

Tourists

■ At present, Galapagos tourism generates $418M annually, of which an estimated $63M enters the local economy (equal to 51% of the Galapagos economy

■ 190,000 allowed visitors a year (Eco-tourism, research, photographers, etc)

■ More visitors sneak in■ People = trash, increase in municipal services, increase in industrial

activities■ Isabela Island is most affected by touists

More on Tourists and All That Jazz

■ Based on the most recent data available, each tourist (out of the given 190,000) generates about $2200 in revenue, of which about $331.58 enters the economy. Correa has desired to increase the limit to 200,000 annually, yet some speculation has the new quota at about 230,000. This could generate an additional average from about $3,315,800 to $13,263,200 revenue per year pumped directly into the local economy

Correlation between visitors and population

Repercussions of Tourists

■ The lack of sufficient and reliable funds hampered the capacity of institutions in charge of managing and administering the marine reserve. The Galapagos National Park Service had unreliable income and, in 1996, could only allot 5% of its total budget to the administration of the Marine Reserve Institutions lacked infrastructure, personnel and equipment. For example, the National Park Service had only one patrol boat to cover the large area of the Marine Reserve, and planes were rarely available for aerial patrols because their primary use was as charter planes.

■ Presence of fecal coliform, mercury, and TPH was detected in this water source. TPH levels were 600 times above the norm set by INEN. The amount of mercury was above the established limit due to improper practices for managing paints and fuels in the workshops. Levels of aluminum, copper, and mercury at the Embarcadero were above established limits, due to ship maintenance activities

Conclusions

■ Current policy does not take into account long term cost-benefits■ Disequilibrium ■ Correa’s policy looks at short term economic gain that is damaging to

environmental resources: the resources sacrificed are not replaceable ■ With environmental issues, it all comes back to the economics.

Works Cited

■ 1) Blas, Javier, and Nathan Gill. "Ecuador Reveals Pain Inside OPEC: It's Pumping Oil at a Loss." Bloomberg.com. Bloomberg, n.d. Web. 14 Mar. 2016.

■ 2) Cadwaller, Carole. "Galapágos Menaced by Tourist Invasion." The Guardian. Guardian News and Media, 09 June 2012. Web. 14 Mar. 2016.

■ 3) "ChevronToxico | Affected Communities Fight for Justice." ChevronToxico.org. Ed. Courtney Buarette. Chevron Toxico, n.d. Web. 14 Mar. 2016.

■ 4) Cincotta, Richard, Jennifer Wisenewski, and Robert Engelman. "Human Population in the Biodiversity Hotspots." International Jounral. Nature.com, n.d. Web.

■ 5) "Ecuador." OPEC :. Organization of Petroleum Exporting Countries, n.d. Web. 14 Mar. 2016.

■ 6) "Ecuador to Limit Number of Visitors to Galapagos Islands." Travelweekly.co.uk. Ed. Travel Weekly. TravelWeekly, n.d. Web. 14 Mar. 2016.

■ 6) "Ecuador to Limit Number of Visitors to Galapagos Islands." Travelweekly.co.uk. Ed. Travel Weekly. TravelWeekly, n.d. Web. 14 Mar. 2016.

■ 7) "Galapagos Conservancy Blog." Galapagos Conservancy. Galapagos.org, n.d. Web. 14 Mar. 2016.

■ 8) Gonzalez, Jose A., Carlos Montes, Jose Rodriguez, and Washington Tapia. "Rethinking the Galapagos Islands as a Complex Social-Ecological System: Implications for Conservation and Management."Http://dlc.dlib.indiana.edu/. Indiana Unversity, n.d. Web.

■ 9) Kenchington, Richard A. "Tourism in the Galápagos Islands: The Dilemma of Conservation." Envir. Conserv. Environmental Conservation 16.03 (1989): 227. Researchgate.net. Web.

■ 10) Novy, Julia W. "INCENTIVE MEASURES FOR CONSERVATION OF BIODIVERSITY AND SUSTAINABILITY: A CASE STUDY OF THE GALAPAGOS ISLANDS." (n.d.): n. pag. Cb.int. UNEP. Web.

■ 11) Organization Of The Petroleum Exporting Countrie, OPEC, comp. "OPEC Annual Statistical Bulletin." (n.d.): n. pag. Opec.org. Organization of Petroleum Exporting COutries, 01 Feb. 2014. Web. 11 Mar. 2016.

■ 12) Yardley, Jim. "Pope Francis, in Ecuador, Calls for More Protection of Rain Forest and Its People." The New York Times. The New York Times, 07 July 2015. Web. 14 Mar. 2016.