The Next Economy
How Costa Rica’s Decarbonization Plans Aim to Protect ‘Pura Vida’

Costa Ricans have a proud saying to describe their way of life. Pura Vida — which literally translates as ‘pure life’ — means so much more than that. It explains their love for life’s simple pleasures, spending time with family, and enjoying the good life in a slow and relaxing way.

But Pura Vida is under threat.

The Central American nation — best known for its beaches, volcanoes and rich biodiversity — is one of the world’s hotspots where a changing climate will have a significant impact in the next 50 years. The latest ND-GAIN Index shows Costa Rica is highly exposed to climate-change risks, ranking it 61 out of 182 countries.

According to Minister of Finance Nogui Acosta Jaén: “Estimates from the Ministry of National Planning and Economic Policy indicate that, in the last three decades, the direct cost of climate-change disasters was about half a percent of GDP per year, mainly related to infrastructure.”

Its 0.02 percent contribution to global greenhouse gas emissions (GHGs) might be meager, but Costa Rica is set to experience average temperatures up to 6° Celsius warmer by 2070 (based on those recorded between 1961 and 1990). Predictions made by the National Meteorological Institute suggest the country will bear the brunt of more extreme weather brought about by the effects of El Niño.

More unpredictable rainfall patterns could affect crop yields and quality. Changes in temperature also increase risks for farmers, with new parasites and pests to contend with. And warmer temperatures might lower worker productivity, spread tropical diseases and see more animal species become extinct. Heavy rains also make communities vulnerable to the devastating impacts of landslides.

But under the leadership of former President Carlos Alvarado Quesada, the country is leading a quiet revolution in how it both adapts to such incoming changes and mitigates its own GHGs. As the latest edition of MIT’s Green Future Index shows, Costa Rica is a ‘Green Leader’ that continues to punch above its weight in how it is preparing for a climate-challenged future.

While Costa Rica has had worthy climate change-mitigation goals for the last decade, its policies are now catching up with the ambition. Its previous Nationally Determined Contribution (NDC) commitments set the country up to achieve carbon neutrality by 2085. But its new National Decarbonization Plan, submitted to the government in 2019, is set to put the nation on track to be a net-zero emissions country by 2050, according to Climate Action Tracker. That’s 35 years earlier, and firmly in line with the 1.5° Celsius trajectory set out in the Paris Agreement. Some countries haven’t even launched a plan yet; and Quesada has won many plaudits for the small state’s ability to take action on a global stage.

So, what has the country promised to do and how will it get there? Well, much will depend on whether newly elected President Rodrigo Chaves, who has only been in office since May, rolls back any of Quesada’s plans. The former finance minister has had environmental activists nervous, thanks to his admiration for fossil fuel extraction. During his election campaign, he bemoaned the “almost religious fanaticism of saying, ‘let’s not allow Costa Ricans to use and benefit from a resource that god gave us,’” talking about natural gas. Opening new plants would almost certainly prevent Costa Rica from meeting its decarbonization goals.

It would also damage the image and reputation of the country’s booming ecotourism industry, which accounts for around 3 percent of GDP.

But with an almost 100 percent share of clean energy providing the electricity mix and admirable achievements in preventing deforestation, Costa Rica is well set to become a leader of environmental sustainability and among the first countries to achieve decarbonization. Almost half of Costa Rica’s forests were lost by 1987; but financial government incentives to pay communities and farmers for protecting important ecosystems has virtually eliminated — and even reversed — deforestation. The country’s reforestation efforts were recently recognised by Prince William’s Earthshot Prize.

In urban areas, 70 percent of all buses and taxis will be fully electric by 2035; and the nation has promised to put measures in place to ensure that, by 2050, electricity will be the primary energy source for transport as well as residential, commercial and industrial sectors.

Of course, for any country that wants to meet ambitious climate-action goals, finance is key. Costa Rica is the first country to benefit from the International Monetary Fund’s new Resilience and Sustainability Facility (RSF) that will help pay for the necessary reforms. It is a new financing tool designed to help low-income countries build resilience to external shocks — such as damage caused by extreme weather or the impact of a pandemic. Costa Rica is an excellent fit for the RSF, given its vulnerability to the effects of climate change and its ambitious climate-change reform agenda.

In a speech given at a climate event at Tufts University’s Fletcher School last month, Quesada reflected on his time in office and the need for nations to work together to drive climate action. “There’s a power in empathy — not to gain power itself but for a larger end, which has to do with reaching out to others. There’s a lot of ‘us and them’ going on right now. But getting into an empathy position means renouncing power. Polarization is a very dangerous game.”