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Scott Jagow Oct 27, 2009

Ecuador has an idea for keeping millions of tons of carbon dioxide out of the atmosphere — pay us $3 billion, and we won’t drill for oil in a certain area of the Amazon.

Today, Ecuador’s president Rafael Correa said Germany has pledged $50 million a year for the next decade or so to stop Ecuador from tapping certain oil fields in the Yasuni region. From the Wall Street Journal:

Foreign Affairs Minister Fander Falconi said Ecuador is also in talks with France and Spain about financing the project, saying it had received a “great response” from them.

President Correa said the project will keep 850 million barrels – or 20% of Ecuador’s proven oil reserves – under the ground. It will save 407 million metric tons of carbon dioxyde from being released into the atmosphere by avoiding deforestation, he added.

Germany hasn’t publicly committed to the dollar figure or the time period, but it and other European countries have expressed serious interest in the deal. Environmentalists like it because it not only lowers CO2, but it also lowers the cost for a poorer nation like Ecuador to be more environmentally-friendly.

More from Businessweek:

Correa’s proposal would block drilling in three oil fields in Yasuni, but it does not explicitly prohibit development in the rest of the park. It was declared a biosphere reserve by the United Nations and is home to Amazon Indian tribes living in voluntary isolation.

Ecuador is an OPEC member that depends on oil for a third of its national budget.

The $3 billion represents about half the revenues Ecuador would make over 10-12 years of drilling. Ecuador also plans to ask the US to join in. Should we?

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