The economic value of natural resources

Ecuador has a lot of oil sitting beneath its beautiful and bio-diverse Yasuni National Park. If the Economist is right, it will soon need to tap that wealth. But the government has cultivated a 'green' image and doesn't want to touch the oil (although it expoits it elsewhere and even has loans from China that will be repaid in future oil production). It has proposed that it would be prepared to leave at least this oil in the ground, and maintain the Yasuni if the international community compensate half of the oil value that it would forego. The idea is that the trees an environment have both an intrinsic value by existing and provide a valuable service for the whole world; absorbing CO2. I have already contributed to the environment bonds. 

This week, one of my favourite podcasts, Planet Money, have an excellent episode on the Yasuni Park and the difficulties in how to compensate countries for maintaining their environments when it would be more profitable for them to destroy them. We need to find a better way to price nature and decide who should pay for it.

Does climate change fuel terrorism?

Here are a few paragraphs from an article on the more general topic strife in the Sahal in this week's Economist.

Low precipitation may seem normal near the Sahara. In fact, much of the Sahel normally gets enough rain to allow modest farming. But a rise in water temperatures in the nearby Gulf of Guinea has shifted the flow of rain clouds southwards, meteorologists say. Livestock have died in droves. Long-term overgrazing and fast population growth have made the problem worse.

Oxfam, an aid agency, warns of a humanitarian disaster, with more than 1m children facing severe malnutrition. Villagers in Chad already dig up ant hills to gather grain the ants have stored. But the worst-affected place is now Niger, a landlocked country of 15m people which, even in normal times, accounts for a sixth of global child deaths from malnutrition. Save the Children, another aid agency, says that the situation in Niger has worsened since September, when a lack of rain led to crop failures of up to 80%.

Misery has made the Sahel’s thousands of unemployed an easy target for recruiters from extremist groups. Their main base lies across Niger’s badly patrolled border with Algeria, where the Sahel becomes outright desert. A two-decade-old Islamist insurgency there has adopted the mantle of global jihad and renamed itself al-Qaeda in the Islamic Maghreb. Having failed to dislodge the military regime along Algeria’s densely populated Mediterranean coast, these extremists are increasingly focused on the sandy hinterland.

Read the full article.