Post on 17-Aug-2020
Ecuador: Environmental, Energy
and Sustainable Development
Update 2014
Presented by
Carlos Arregui
Xavier Flores
Andrey Gallegos
Environmental and Social Conflicts in
Ecuador
Presented by
Carlos Arregui
Ecuador’s Natural Resources
Marketed
– Soil quality
– Water - Hydropower
– Petroleum
– Minerals (gold, copper, silver,
molybdenum, iron, gypsum, zinc,
and lead)
– Gas
– Fisheries
– Timber
– Landscape
Non-Marketed
• Biodiversity
3
Ecuador’s Industries
• Petroleum
• Agriculture (e.g. Bananas, cacao, flowers, and coffee)
• Processed foods (e.g. fruit drinks and canned meats)
• Tourism
• Fishery
• Mining
• Car assembling
• Timber
• Construction – Cement
4
Environmental and Social Conflicts Related to the Natural
Resources Exploitation
• Examples of some environmental and social conflicts:
• Banana fields = Children’s labour
• Shrimp production = Mangrove depletion
• Oil production = Soil and water pollution
• Mining = Water pollution and soil desertification
• Timber = Soil desertification
• Fishery = Over fishing and ecological disruption
• Flower production = Overuse of chemicals
• Biodiversity loss is related to all the activities and industries
5
Sources of the Conflicts
• Illegal activities (timber industry in Esmeraldas, coastal shrimp farming,
shark fin fishing in Galapagos and mining activities)
• Lack of property rights (timber industry in Esmeraldas, mining industry)
• Market demand (overuse of chemicals in the high lands in the flower
industry)
• Administrative decisions to decrease the production costs (Texaco case)
• Diffuse legislation (mining sector before 2009)
• Lack of control (Banana/children’s labour)
• Inefficient bureaucracy
• Corruption
• Population growth and density pressure (The Anthropocene era)
6
Current Government Initiatives to Regulate
Extractives Activities 2006-2014
• Constitution of Ecuador 2008 – Nature is a subject
of rights
• The Wellbeing National Plan (Energy)
• Act 486 (Jul, 2007) – Shark fishing ban
• Act 1391 (Oct, 2008) - Shrimp farms
• Mining Law (Jan, 2009)
• Act 116 (Feb, 2013) – Ban of timber activities
7
Regulation Processes and Conflicts
• The regulation processes provides clear rules (the
boundaries were demarcated)
• The regulation processes generate conflicts between
stakeholders (winners and losers)
• Law enforcement and processes of command and
control demand the use of resources (money, fuel,
technicians, energy)
8
Mining Sector Example
Situation Previous 2009
• Extensive illegal activities
• Environmentally damaging
practices (mercury)
• Non-regulated activities (taxes)
• Worker exploitation
• Overuse of resources (water)
• Lack of property rights
• Small or medium scale mines
Current Situation
• Regulated activities
• Better environmental practices
• Better mining techniques
implementation
• Better situation of workers
rights
• Concession for Mega projects
– open pit mining
9
Should we decide what is the best option?1000 + of small – medium scale
projects5 or 10 mega projects
10
In certain areas there is a possibility to choose
a better option
11
Changing the energy production matrix
• In Ecuador, 96% of energy production, the equivalent of 90% of the total energy
supply, is concentrated in fossil fuels such as crude oil and natural gas, with
renewable sources of energy (such as hydroelectricity and biomass) barely
representing 4% of national energy production.
• In addition, more than 90% of energy imports – which amount to 10% of the total
energy supply – correspond to oil derivatives
• One of the strategies of the Wellbeing National Plan (WNP) seek to increase the
hydropower energy generation of the country through Mega projects such as Coca
Codo Sinclair.
12
Positive changes
• Changes that are considered as positive
(hydroelectric) also generate conflicts
• Every human intervention related to
natural resources creates conflict
• Institutionalism help to generate a better
environment for working and investment
13
Thanks
14
The Ecuadorian Energy Matrix :
Economic, social and political
analysis
-Improving the Ecuadorian Productive Matrix-
“There can be no sustainable development without
sustainable energy development” (Margot Wallstrom 2004)
Presented by
Andrey Gallegos
16
Outline
1. Context
– Economic, Politic and Social Situation
– The Well-being National Plan: Energy
Empirical
2. Energy Policy
– Energy Mix
– Energy Projects
3. Triple-bottom line analysis
05/12/2014
Ecuador: Context
• Population:
– 15,737,878.0
• 71.9% mestizo
• Currency:
– USD
• Urbanization
– 67.5%
• Upper middle-income
country:
– GDP per capita: $10 600
USD (growth 4.9%)
05/12/2014 17
Source: Google Maps (2014), The World Bank (2014).
Ecuador: Context
Share of main products of exportation in Ecuador by 2013
05/12/2014 18
Source: Modified from CEPAL (2014a).
Good Living National Plan: Energy
• 2007 – Rafael Correa
– “Citizen Revolution”
– National Plan of Development (NPD) Good
Living National Plan (GLNP)
– Constitution (2008)
• Productive matrix
• Social improvement, equity and equality.
• Energy Driver of the economy
• Local development
05/12/2014 19
Good Living National Plan: Energy
• Aims:
– Energy sovereignty
– Clean technologies
• Energy efficiency practices
• Renewable energies
“Energy is the lifeblood of the production system, so it is essential to
increase the share of energy obtained from renewable sources,
reinforcing the national non-renewable energy stock and adequately
managing energy demand, in order to achieve long-term sustainability
and minimize risk in the energy supply” (GNLP, 2013)
05/12/2014 20
GDP Growth (%)
• %
05/12/2014 21
4.15%
3.31%
GDP (Current USD) & GDP per capita
05/12/2014 22
2013: $5720.2
Dollarization
2000: $1462
x 2.44
x 1.6
Well-being indicators (Education & Health)
05/12/2014 23
2013: 737,207
2007: 1,509,161
50%
2000: 1.1%
2013: 2.9%
x2.63
Ecuador: Energy Mix
05/12/2014 24
0.00
50000.00
100000.00
150000.00
200000.00
250000.00
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Tho
usa
nd
s o
f b
arre
ls o
f o
il e
qu
ival
en
t
Oil Natural Gas Hydropower Firewood Sugar Cane Biomass
Primary energy production in Ecuador
Source: CEPAL (2014).
West Texas Intermediate $/bbl.
05/12/2014 25
$85.83USD
$39.66USD
Source: EIA Database (2014)
Ecuador: Energy Mix
05/12/2014 26
0
10000
20000
30000
40000
50000
60000
70000
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Tho
usa
nd
s o
f b
arre
ls o
f o
il e
qu
ival
en
t
Electricity Liquified Petroleum Gas Gasoline/Alcohol Kerosene Diesel Oil Fuel Oil
Secondary energy production in Ecuador
Source: CEPAL (2014).
Total final consumption of energy in
Ecuador
05/12/2014 27
Industry Transport ResidentialCommercial andPublic Services
Agriculture/Forestry
Non-specified Non-energy use
Geothermal/Solar 2
Electricity 707 1 484 355 121
Biofuels & Waste 227 4 224
Oil Products 1422 5407 1045 16 117 131 503
0
1000
2000
3000
4000
5000
6000
Th
ou
san
ds
of
ba
rre
ls o
f o
il e
qu
iva
len
t
Source: IEA (2014).
Energy subsidies in Ecuador 2012
05/12/2014 28
6,603 million USD every year
Energy Subsidies: 58.5% Total Subsidies (Cash Transfer Programs: BDH)
12.7% of the Current Expenditure
3.19% GDP Ecuador (2.9% Education) Source: Bonilla (2013).
Energy Projects
• Objectives:
– Increase up to a 60% of the installed capacity
of renewable energies.
– Reach 76% of secondary energy sufficiency.
– Expanding the electric capacity to 8 741 MW
by 2017.
05/12/2014 29
Renewable conventional
energy projects
Alternative energy projects
Energy efficiency programs
Energy Projects
05/12/2014 30
Source: MEER (2014d), CONELEC (2014a@), McCaskie (2013), ERGAL (2014), CELEC (2014).
Electrification Master Plan 2013-2014
Energy Efficiency Projects
05/12/2014 31
Electric Policies
• “Renova Plan”
• substitute energy inefficient appliances
• “Inductive Stoves Program”
• Education
• 80 kWh/month 2018 (3.29USD)
• 36 months financing
ISO 50001
• Industrial & Public Sector
• Efficient Energy Practices
• 200 Companies
• 75 experts in EE Systems
• Potential:
• 5964 MWh (31%)
• 6501 tCO2
Source: EcuadorCambia (2014), MEER (2014), MIPRO (2014)
Ecuadorian Energy Policy: Triple-
bottom line analysis
• Economy
– Philosophy of saving and preserving scarce
economic resources
• Transition: NRE Renewable Energies
– Challenges:
• Financing
– Chinese loans oil-exchange contracts
– Reduce consistency of EE Policy.
05/12/2014 32
Ecuadorian Energy Policy: Triple-
bottom line analysis
• Environment
– Extraction of petroleum
• Pay loans Yasuni-ITT
– Payment for environmental services failure
– CO2 emissions equivalent to a billion barrels
– Hydropower plants
• Environmental pressures (downstream)
– Extractivist behavior:
• Infringe collective rights
05/12/2014 33
Ecuadorian Energy Policy: Triple-
bottom line analysis
• Social
– Constitution of 2008
• Rights indigenous, multi-nationalities and all
types of cultures
– Avoid:
• Complex impacts on minority groups
– Chevron-Texaco case in the Ecuadorian Amazon
• Conventional models of governance
– Deplete natural resources in the short-run
05/12/2014 34
Conclusions• Figures evidence an initial change of the energy mix of the country
– Coupled with the welfare improvements.
• Main energy programs:
– Hydropower generation and energy efficiency
• Economic investments
– Infrastructure, institutionalization and poverty reduction
– positioning human capital above financial capital
• Future scenarios – Energy Mix
– Reasonably promising since investing in long-life productive assets
represents a lever for development.
• Challenges – Energy Policy
– Financing, equity, cultural, climate change and conservation.
• Decisions and wills
– Required to promote a transformation in energy production and consumption
05/12/2014 35
3605/12/2014
37
References• Ministerio de Electricidad y Energías Renovables http://www.energia.gob.ec/
• Secretaría del Agua http://www.agua.gob.ec/
• Plan Nacional para el Buen Vivir http://plan.senplades.gob.ec/estrategia7
• Larrea, C 2013, ‘Extractivism, economic diversification and prospects for sustainable development in Ecuador’, Universidad
Andina Simón Bolívar, viewed 16 October 2014,
• <http://repositorio.uasb.edu.ec/handle/10644/3376>.
• La Presidencia http://www.presidencia.gob.ec/la-presidencia/
• The World Bank http://databank.worldbank.org/data/home.aspx
• International Energy Agency http://www.iea.org/
• U.S. Energy Information Administration http://www.eia.gov/
• Asamblea Constituyente 2008, ‘Constitución del Ecuador’, Documentos, Asamblea Nacional del Ecuador, viewed 17 October
2014, <http://www.asambleanacional.gov.ec/documentos/constitucion_de_bolsillo.pdf>.
• Banco Central del Ecuador 2014, ‘Estadisticas macroeconomicas: Sector coyuntural (Macroeconomic statistics: Conyuntural
sector’, Direccion Nacional de Sintesis Macroeconomicas, BCE, viewed 21 October 2014,
<http://www.bce.fin.ec/index.php/nuevas-publicaciones1>.
• Bonilla, MN 2013, ‘Sistemas de proteccion social en America Latina y el Caribe: Ecuador (Social protection systems in Latin
America and the Caribbean: Ecuador)’, CEPAL, viewed 22 October 2014,
<http://repositorio.cepal.org/bitstream/handle/11362/4097/S2013558_es.pdf?sequence=1>.
• Comision Economica para America Latina y El Caribe 2014b, ‘Produccion de Energia (Energy Production)’, CEPALSTAT-Base de
Datos, CEPAL, viewed 20 October 2014, <http://interwp.cepal.org/sisgen/ConsultaIntegrada.asp?idIndicador=2040&idioma=e>.
• Consejo Nacional de Electricidad 2014a, ‘Catálogo de proyectos Hidroeléctricos (Catalogue of hydroelectric projects’, CONELEC,
viewed 19 October 2014, <http://www.conelec.gob.ec/contenido.php?cd=1446&l=1>.
• Consejo Nacional de Electricidad 2013c, ‘Electrification master plan 2013-2022: Executive summary’, CONELEC, viewed 19
October 2014, <http://www.conelec.gob.ec/contenido.php?cd=10329&l=1>.
• Eras, AA 2012, ‘Estudio energético del sistema eléctrico en Ecuador. Impulso a la energía solar fotovoltaica (Energy study of the
electrical system in Ecuador. Boosting Solar PV)’, Master Thesis, Universidad Politecnica de Madrid.
05/12/2014
The exploitation of natural
resources: a way forward?
Presented by
Xavier Flores
• This analysis aims to examine the possible
effects of the exploitation of natural
resources in the light of the Ecuadorian
constitutional framework and the structural
conditions of the country.
05/12/2014 39
• Ecuador adopted a new Constitution in
2008. It establishes two key concepts: the
Well-Being (“el Buen Vivir”) and the
protection of the “rights of nature”.
05/12/2014 40
• What does the “Buen Vivir” implies? What
does the “rights of nature” implies? Is
there only one alternative to achieve those
goals? The discussion between
sustainable development and no
exploitation of natural resources.
05/12/2014 41
• The curse of the resources: is it
necessary, or is it subject to conditions?
Exceptions around the world: Botswana in
Africa, Bhutan in Asia, Norway in Europe,
Chile in America, and Australia in
Oceania.
05/12/2014 42
In order to the curse of the resources to exist,
some conditions should be met:
1. The misallocation of revenue deriving from
the exploitation of natural resources.
2. The increase in rent-seeking behaviour.
3. The level of investment in human capital.
4. The level of institutional quality.
5. The initial level of Human Development
dimensions.
05/12/2014 43
• The allocation of revenue deriving from the
exploitation of natural resources: where
does the money goes?
05/12/2014 44
• The increase in rent-seeking behaviour:
who benefits?
05/12/2014 45
• The level of investment in human capital:
the expenditure on education.
05/12/2014 46
• The level of institutional quality: constraint
on government powers, absence of
corruption, open government, fundamental
rights, order and security, regulatory
enforcement, civil justice, criminal justice.
05/12/2014 47
• The initial level of Human development
dimensions: how do we fare?
05/12/2014 48
• The case of the exploitation of the Yasuni:
the National Assembly resolution.
05/12/2014 49
Conclusion
• With adequate institutional arrangements,
the exploitation of natural resources may
be a way forward.
05/12/2014 50