Business Insight Zone

This item from Foreign Policy’s Passport blog describes how “Ecuador’s government is asking developed nations to pay $350 million for them NOT to drill for oil in a major field in the heart of the Amazon.”

I do take slight issue with FP’s comment that this qualifies as “a unique environmental scheme,” since it appears to be similar to the financial deals that Indonesia has been working out with Australia and other countries.

The general idea behind these moves is the same. The richest countries have something — money — that developing countries need (or want, depending on your viewpoint), and many developing countries have something — environmental goods — that the rich countries need (or want). Sounds like yet another context for supply and demand, of both money and environmental goods, to take over.

It will be interesting to see just how much Indonesia, Ecuador, and their rain-forest-possessing peers will push on this front in years to come, and how much the most developed nations will be willing to pay.

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More context from the FT (via MSNBC):

Forest nations press for carbon credits to help cut greenhouse gas

and (the Australian variety of) ABC:

Indonesia says more money needed to stop deforestation.

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Category: Globalization, Green & Clean