Costa Rica landscape

Costa Rica’s Green New Deal

The green transformation is on its way thanks to the agreement between governments, private companies, civil society and support of international funding.

by Chris Dalby
20 March 2020
6 min read
by Chris Dalby
20 March 2020
6 min read

The Green New Deal proposed in the U.S. Congress has been praised for its ambition and doubted for its scale. To the South, however, a smaller country is showing the results of a nationwide commitment to a green economy. Costa Rica has made a stark promise about its commitment to become a carbon-zero nation by 2050. Admittedly, Costa Rica has just 5 million people, or the population of cities such as Ankara, Sydney or St. Petersburg. So, how much do its contributions matter on a global scale? Can Costa Rica truly be an example, given the different scale a Green New Deal in the U.S. or China would require? In an interview with Wired in March 2019, the country's president, Carlos Alvarado, said that detractors seemed to be telling him not to bother. "People ask me why do this if you are so small? They say, you're not going to move the needle or affect the scale of the problem." His eloquent answer was that it was about "narrative and framing." To quote the government's climate adviser, "if we can't do it, nobody can". Almost all countries have made similar promises but Costa Rica has a long history of committing to achievable, affordable progress toward the goals it lays out. In 1948, the country permanently abolished its army and has used the money it would have spent to invest in education, healthcare and social welfare. This has helped it become one of the safest countries in the region, despite resisting militarization of its anti-crime strategy. For five years now, the country has also virtually powered itself entirely from renewable sources. In recent decades, it has reversed deforestation habits and achieved forest cover of 50%. This is not only good for the environment, it has comforted Costa Rica's position as a leading ecotourism destination and brought in millions of tourists.

Costa Rican President Carlos Alvarado with First Lady Claudia Dobles

First Lady Claudia Dobles, who is the plan's main driver, has a clear hierarchy in which she wants to address problems. The first priority is transportation. As the middle-class population has grown, demand for cars and motorcycles has increased, making transportation the largest contributor to greenhouse gases in the country. Yet, Costa Ricans are not buying new vehicles. The country's motor pool has an average age of 17 years. And for such a small nation, Costa Rica experiences more than its fair share of gridlock. Rush hour traffic in the capital San José moves at a sluggish pace of below 16 km/h, according to NGO State of the Nation. For Dobles, the goal is to electrify public transport by end of 2020 and make all cars electric by 2050. This process will be made much cleaner since Costa Rica does not use coal to produce electricity, unlike most nations. A major challenge on Costa’s Rica Green New Deal will be the reduction of its dependence on oil. While Alvarado has renewed a ban on even prospecting for oil on Costa Rican territory, the Supreme Court has sided with the oil industry who want to gather signatures of support for oil exploration, which could trigger a referendum.

Foreign financing

The second crucial element to the success of the Green New Deal is securing foreign loans. Costa Rica, well aware of its positive reputation around the world, believes that succeeding in this plan will inspire other nations to do the same. Therefore, it feels that countries and international agencies will be willing to fund its transformation and ensure it sets the example. So far, it has proven to be a good return on these investments. The Global Climate Partnership Fund (GCPF) has supported Costa Rica in a crucial step of the Green New Deal: ensuring people and businesses change as well. Since 2015, Promerica Costa Rica, the GCPF partner in the country, has financed a range of projects, including solar panels, industrial boilers, biomass projects in agricultural areas and the creation of energy-efficient bus fleets. In 2018, the country obtained a US$ $500 million line of credit from the Inter-American Development Bank, intended to finance its transition to environmentally friendly energy generation, as well as greening up its transportation sector. To obtain more such aid, Costa Rica went all in on a recent opportunity. A major climate conference in December 2019 has been switched from Chile to Costa Rica with just weeks to go. In one swoop, the country will comfort its status as a regional ambassador while being able to tout the success of its environmental policies to international financial bodies as well as court them for further loans. The third pillar of the Green New Deal is transforming public expectations. In a process seen in many developing nations, the growing middle-class population have aspirations of owning private cars, a symbol of wealth and independence. Changing these desires with careful public investment and reliable services will be absolutely crucial.

Wind energy plays a key role in Costa Rica's renewable energy mix

Not everyone agrees...

Already, plans to revamp the country's electricity and public transport sectors have brought people out onto the street. Alvarado told Wired that "lots of people will say, man, I can't even afford a motorcycle, and now you're telling me I need to electrify my transportation? That just adds to a sense of exclusion." The president is keenly aware that objections to stringent targets from developing nations, which state they have not been able to enjoy the same benefits from industrialization as richer countries, have been a major roadblock to climate change talks. The aforementioned referendum on national oil exploration, would then become a poll on Alvarado's entire environmental policy.

A sustainable model for all

Perhaps the major lesson to be drawn from Costa Rica is its persistence toward these goals. Naturally, achieving climate change goals in a country of 5 million requires less coordination and political gymnastics than in many nations. But the seemingly unerring agreement of successive governments, civil society, and private companies to work towards this Green New Deal is a remarkable feat.


The author: Chris Dalby

Energy and political journalist with experience covering politics, energy, oil and gas, mining, finance, business, Latin America, China, and the Olympics.