Paying to not produce oil

Came across an interesting article in TreeHugger about the UNDP paying Ecuador up to $3.6B not to develop a specific oil field. In my mind the interesting thing this does is set another price-point that can be used to help estimate the total cost of externalities assumed in the project.

In this case, we are paying not to develop a field,so the business case for this payment has to take into account the initial cost of developing the field, the tax revenue that would have been gained from the company and employees, the value of the oil exports themselves, offset against any environmental and social damage caused.


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