A Tragedy of the Commons in Bolivia

Bolivia’s history is unavoidably related to their mineral wealth. The first important settlements in Bolivia were raised near mineral reservoirs, and our cities grew around the mining. Potosi was built next to an immense silver reservoir known as the Cerro Rico (Rich Mountain), and grew and flourished around its exploitation. According to census from 1573 Potosi had back then 120.000 inhabitants (more than Seville, the biggest Spanish city at the time), and by 1625 had 160.000 inhabitants.

The silver exploitation in the Cerro Rico is even older than the Spanish occupation, and could go as back as year 1.000 A.D., and it continues today. The business model has changed over the time. During the colonial period the mining was made by slaves and the silver was sent to Europe. After the foundation of the Republic the things continue pretty much the same, with the reservoir owned by some wealthy families and the exploitation being made by semi-slave workers. In the middle of the 20th century the mine was expropriated by the State and the exploitation continued until the collapse on the silver market in 1980 when the mine got practically abandoned.

It was after the year 2000, and with the prices going up again, that the miners returned to Potosi, but this time the business model is different. The exploitation isn’t being made by any private or public company, but for many small companies or cooperatives. There aren’t clearly delimited concessions, so the veins are exploited by the first to come. Inside some cooperatives, the workers pay a fee for the right to enter the mine, but there is no limit of how much mineral they can come out with. So, for all purposes, a Tragedy of the Commons scenario has been formed. The mineral and the mountain itself has become a common as there are no clear property rights over it. And because there is no owner, the miners share this reservoir and exploit it as extensively and quickly as possible.

The tragedy is not just the depletion of the mineral (there is no sustainable way to exploit a mineral) but also the side effects of its exploitation. The cooperatives operate without any plan or impact evaluation, and because of their operations now the mountain itself is about to collapse. The mountain has an historical and symbolic value that surpluses the value of all its silver. The Cerro Rico is mentioned in the Spanish Literature masterpiece Don Quijote de la Mancha; along with the city of Potosi has been declared cultural heritage of humanity by the UNESCO, and it’s so important for Bolivian history that even appears in the national pennon. This symbolic and historic value of the Cerro Rico is also a common (or, more properly, a public good), although isn’t a depletable one, and it’s this common that is at risk.

The only way to save the Cerro Rico is to reallocate the miners that work there, and take technical measures to preserve its integrity. This is quite a challenge because the miners are numerous (about 15.000), are highly (politically) organized, and are reluctant to be reallocated. The State has no power or will to enforce a reallocation against such a powerful stakeholder. The only way out appears to be a negotiation, but the miners refuse to stop their activities during the negotiation. So the mountain keeps suffering, and every day we are closer and closer to a complete Tragedy.

Yasuní. Just a brave first step.

Given that some of the richest mineral and oil deposits are placed in important biodiversity reserves, the countries that posses the deposits faces the difficult decision of to exploit it or not.   The complexity of the decision is increased in poor, undeveloped countries. Despite there is always some discussion, the answer tends to be the same. The money is more important. Even the most progressive governments sacrifice their nature in order to get fresh incomes. There was a very honorable exception to this rule: Ecuador.

The initiative.

Since 2004 Ecuador faced an increasing pressure to exploit the oil deposits in the Yasuní. The Yasuní, a natural reserve with extraordinary biodiversity is also home of the Tagaeri and the Taromenan, two indigenous groups that live in voluntary isolation. In 2007 the Ecuadorian government came out with an innovative alternative. The Yasuní–ITT.

Ecuador was willing to keep the oil (about 846 million barrels) underground, with this proposal the territory itself would be preserved and the emission of about 407 millions of tons of CO2 would be prevented; in exchange, Ecuador was asking to the World, but, most of all to the rich countries, to pay 3.600 million dollars, approximately half the value of the oil they would not exploit. A trust fund was created to collect the money, and its administration was assumed by the United Nations1.

There were, of course, encountered points of view around the project. Still, this innovative idea was a whole new vision of the conservation and incorporated concepts such as shared responsibility and climate justice. It was more ambitious that any other environmental protection measure taken so far, and it was the first national scale project built in the spirit of a post-oil economy.

The response.

The initial response to the initiative was generally positive. People in countries facing dilemmas similar to the Yasuní-ITT proposed this project as an alternative to the exploitation, and some developed countries like Germany and Italy expressed his support. Unfortunately the project concurred with the most important economical crisis that the World faced in 80 years, so this was a serious barrier for the fundraising. It’s also important to note that the initiative had a much more shy response among the countries that are responsible for the bigger part of the CO2 emissions.

Without a question the crisis harmed the negotiations and made more difficult for the potential contributors to take action, but the crisis isn’t a valid excuse for the rich countries apathy.

The errors.

Despite its positive aspects there had been mistakes in every step of the project. The first and most important was the B plan. Correa announced that the initiative was the A plan, and that in the possibility that the goals of fundraising were not fulfilled they would proceed with a B plan, consistent in the full exploitation of the oil deposits. This B plan makes some people think that Correa was not serious about the project. Just a few weeks after the Yasuní-ITT presentation, Ecuador took the first steps to the creation of the so called Pacific Refinery. A 2009 intern document from Petroecuador (Ecuador’s state oil company) showed that this refinery would be the destination of the Yasuní’s crude2 . The B plan was the most important obstacle to the fundraising and is the most important cause of the Yasuní-ITT failure.

The B plan and other mistakes eventually provoked that some key characters –like Roque Sevilla former ITT commissioner or Alberto Acosta important sponsor of the initiative- took distance from the project and Correa’s administration. The succession of deadlines that were set by the government (each deadline involving an evaluation of the continuity of the project) made the initiative looked much like a blackmail. This lack of coherence provoked a series of advances and retreats among the countries interested in collaborate with the project, and eventually fully eroded Ecuador’s credibility in this matter.

When he was announcing the end of the Yasuní-ITT, President Correa blamed the World for the failure. In my opinion the accumulation of mistakes by his administration is the main cause of this outcome. In short terms Ecuador failed in the task to sell the Yasuní-ITT to a World that was, as always, reluctant to big changes.

The future.

One task that Ecuador’s government made pristinely well was to sell the Yasuní-ITT initiative to its own countrymen. The response that Correa’s decision had raised shows this success. There are millions of Ecuadorians that think that the Yasuní should be preserved even if the fundraising goals hadn’t been fulfilled, there are thousands that are willing to resist the government’s decision. There is still some hope for the Yasuní.

Hopefully, some decades from now, we will remember the Yasuní-ITT as the first step in the difficult but indispensable road to a post-oil economy.

1 Yasuní-ITT official website (http://www.yasuni-itt.gob.ec/quees.aspx)

2 July 30th 2011. Plan B, ‘el mayor obstáculo’ para que se concrete apoyo a Yasuní. El Universo.