How 'green' generates new wealth
How positive for leaders can the impact of the ESG be? I discover in Costa Rica big and encouraging lessons for us all.
Green policies generate new wealth. Costa Rica is proof positive that the sceptics and nay-sayers around the world who challenge or reject this are wrong.
What you see when visiting this splendid country confirms that vividly. So does the data on how Costa Rica stands in world ratings.
Together these explain why the nation was one of five winners of the prestigious Earthshot prize, presented by the UK’s Prince William in late 2021.
Why Costa Rica?
Costa Rica is not just recognised for protecting and restoring nature. From this it has generated a new prosperity, with sustainability and biodiversity at is heart. And this process continues to intensify, raising Costa Rica’s position to close to the top in many tables.
Costa Ricans like to boast of what they call their ‘Pura Vida’ - their pure life. But most outsiders know little or nothing about Costa Rica. They don’t even know what and where it is – a patchwork of volcanoes and forest in Central America that stretches from the Pacific in the west to the Caribbean and Atlantic in the east.
They and you should learn fast. It is a compelling country of just 5 million people with lessons for us all.
Its fast growing economic wealth comes from determined policies over many years to protect the planet. That makes it an attractive location for enlightened business investment. The flourishing sectors are medical, pharma, electronics and prosthetics which together now produce greater prosperity than the historic staple agricultural successes of bananas, coffee and palm oil.
Inspiration from acting differently
Costa Rica will inspire you to think and act differently as it did for me. This is not by depriving a population of new opportunities when an economy is greened. That is what the sceptics claim happens.
Success has come by doing the opposite - generating huge new opportunities. The result is that poverty levels are by far the lowest in the region, with excellent prospects for further improvement.
As the World Bank writes: “Costa Rica is a success story in terms of development. It is considered an upper middle-income country, which has shown a steady economic growth over the past 25 years. This growth resulted from an outward-oriented strategy, based on the openness to foreign investment and gradual trade liberalization”.
At least one and a half million people – more than 25% of the population – work directly for what has become a green focussed economy. Being and thinking green drives the nation forward through respecting nature, driving sustainability and protecting biodiversity.
This was evident to a visiting ‘tourist’ like me who had come to enjoy and sample the amazing array of birds, biodiversity and wildlife. But importantly my impressions were also confirmed by that data which I mentioned.
Data confirms impressions
For example, there is a new and exciting EESG index of global digital readiness. It adds to ESG a second ‘E’ for economic. Then it measures the impact. In 147 nations the index accounts and compares the wealth, cost of living and socioeconomic conditions of each nation. It then weighs the major factors on an adjusted per capita basis.
Remarkably, Costa Rica comes 13th out of those 147 nations, beating leading developed countries like Germany, France, the Netherlands, Singapore, Australia and the UK.
The EESG index describes Costa Rica as a leading “bright star” in LATAM. It has a “dynamic economy and” (even more remarkably) “is approaching developed nation status.” That alone is a huge achievement. It would have been unimaginable when the country’s economy was struggling with bananas and coffee as main revenue earners, and nature being abused in the 1980’s.
Now Costa Rica “derives almost 100% of its power from renewables”. As the EESG index adds: “Improvements in social structure and governance would enhance its prospects further”.
It is impressive all round.
Policy is critical
In the few paragraphs of this posting I can only highlight for you that impressive direction of travel, and the kind of benefits I could see that it produces. Almost fifty years ago, much of Costa Rica’s primary equatorial forest had been eliminated by intense logging and deforestation in order to create farm land. Since then the creation of national parks and an overarching imperative for preservation has regenerated secondary forest.
“Thirty years ago when I flew from San Jose [the capital] to here [on the Osa peninsular in the south west] there was almost no forest. Now it is almost 70 per cent” Bryan from the Drake Bay Wilderness Resort told me.
Boosted by pioneering financial encouragement to reduce carbon emissions from deforestation and forest degradation, forests have doubled in size. Flora and fauna have thrived. This has lead to a boom in ecotourism that has injected $4billion into the economy.
The green focus means that Costa Rica’s economy bounced back faster than expected after being decimated by the COVID pandemic. “Costa Rica is showing how sustainable management of natural assets can strengthen the inclusive growth that is so necessary for post-pandemic economic recovery,” said Carine Clert, World Bank Country Manager for Costa Rica and El Salvador.
Message for all of us
Why is this relevant to you?
“What we achieved in this small country in Central America can be done anywhere,” said Carlos Alvarado a former president of Costa Rica. “We will continue recognizing nature as our most valuable asset, advancing towards a carbon neutral and a nature positive world”.
We all need this kind of “must do/can do” attitude so badly.
Look at the latest dire global warnings in late March from scientists brought together by the UN’s Intergovernmental Panel on Climate Change to assess the future for humanity on planet earth. Their report was described as “a clarion call to massively fast track climate efforts by every country and every sector and on every time frame,” by the UN Secretary General Antonio Guterres. “The world needs climate action on all fronts: every thing, everywhere, all at once”.
Costa Rica shows what can be achieved with determined single mindedness, especially from the continuity created by a succession of political leaders. Jose Maria Figueres, is a former Costa Rica President who narrowly failed to be elected for a second term in 2022. We meet for coffee in one of San Jose’s up market hotels. His father was president three times and put in place many of the eco principles from which the country is now benefitting.
Is there a clear national culture and behaviour? “Yes. We have embedded a new societal DNA in Costa Rica”, he tells me. The big lesson is that public policy must align the economy and environment. “The environment must be a good and viable proposition” to convince the sceptics. This needs to be backed by regulation of markets.
A relentless commitment to create a sustainable nation has now been enshrined in the constitution for 70 years. Since the late 1940’s Costa Rica has been demilitarised. As there has been no need to fund armed forces, successive governments have been able to focus budgets on education and teaching all generations to respect and promote nature.
It has worked.
Encourage not frighten!
The core message? In diverting as many resources as possible to emphasising green, Costa Rica has been investing in its future. But the country has learned that people can’t be forced by fear. They must be encouraged.
That’s the message from Boris Marchegiani, owner of the breathtaking Gaia eco-hotel which he has developed perched on a hill overlooking the coastal resort of Manuel Antonio. As well as hosting travellers he runs an extraordinary bio-reserve dedicated to restoring the chances for the glorious scarlet macaw birds to survive in Costa Rica.
“Making people love green works”, Boris told me over breakfast. ”You have to build the cake [of sustainability] with little bites. Small things today change behaviour”. Why? The danger otherwise is that “we have been told about the emergency for so long that people don’t believe it any more”.
While Costa Rica brashly brands itself the nation for “Pura Vida” – a pure life - it is not there yet. But it has certainly got to a place much closer to that intention than almost any other nation on our threatened planet.
That is why Costa Rica’s success has lessons and inspiration for all of us.