Ecuador suggests wealthy countries
use IMF fund for aid the environment
BC Rich Nations All But Stall on Key $100 Billion Climate Fund Goal, Jessica Shankleman
- President Lasso came up with the idea during a sleepless night
- Ecuador hopes to preserve the Amazon and Galapagos Islands
By Stephan Kueffner/Bloomberg News
Petroleumworld 09 27 2021
Ecuador President Guillermo Lasso says the U.S. and other wealthy countries should use their share of $650 billion of funds recently distributed by the International Monetary Fund for environmental causes.
Lasso said he proposed the idea to John Kerry, the U.S. special envoy on climate change, at a meeting this week. The former secretary of state “liked the idea, he hadn’t heard it before,” Lasso added. It was not an in-depth discussion, according to a person familiar with the matter.
Lasso has said he wants to make the economy more environmentally friendly, seeking to protect natural treasures from the Amazon rain forest to the Galapagos Islands, and is looking for ways to lessen the economic losses that sometimes go hand in hand with conservation. He sees an opportunity with the distribution of so-called special drawing rights from the IMF, saying that while poor countries are likely to spend their allotments on pressing needs, it would be a mistake for wealthier nations to sit on the funds when they could be used to make the world a better place.
“What if we exchange a greater conservation of nature for those resources,” Lasso said in an interview at Bloomberg’s headquarters in New York. “What if the world uses this gift from Santa Claus of special drawing rights given to it by the International Monetary Fund?”
He said the money could be used to pay mining companies to leave gold in the ground, or incentivize cuts in oil production, for example.
Lasso, who entered politics a decade ago after working as executive president at Banco Guayaquil, said he came up with the idea during a sleepless night. Environmental organizations have endorsed similar proposals, and IMF Managing Director Kristalina Georgieva has suggested allocating some SDRs to a new “Resilience and Sustainability Trust.”
Ecuador is the fourth-biggest oil producer in South America, extracting most of its output from Amazonian lowlands, including its Yasuni National Park. In 2007, former President Rafael Correa began to promote a plan to keep the oil industry out of the park’s eastern areas where its largest untapped oil fields had been discovered.
The idea flopped as potential funders balked at Correa’s insistence that he control the money amid a lack of trust in his guarantee the oilfields would never be developed. With donations a fraction of the several billion dollars he had sought, Correa instead ordered state oil company Petroecuador to begin pumping.