As the year 2021 draws to an end, Costa Rica is collecting international accolades for its environmental achievements. On 17 October, the Central American country received the Earthshot Prize in the Protect and Restore Nature category for its Payment for Environmental Services (PES) scheme.
The scheme has benefited some 19,000 families since its inception, has mobilised US$524 million (about €450 million) in conservation projects covering over 1.3 million hectares, and has contributed to increasing the country’s forest cover from 47 per cent at the beginning of the year 2000 to 59 per cent today.
On 13 October, the British band Coldplay announced plans to start their world tour in Costa Rica, on environmental grounds, given the country’s status as a global “model” in terms of laws that protect the planet and, above all, for its electricity grid powered by 100 per cent renewable energy. One of the features for which Costa Rica is best known around the world is the fact that all the electricity produced in the country is from renewable sources.
The Washington Post recently published a profile on Andrea Meza, Costa Rica’s environment minister, applauding the fact that such a small nation – covering just over 52,000 square kilometres – is a global example in terms of environmental protection. “Meza is now tasked with showing the world whether a small, developing country like hers can overcome these challenges and rebuild its economy in a way that protects the climate. If Costa Rica can do it, what’s stopping much bigger and wealthier countries from following its lead?”, the US newspaper asked.
When we refer, however, to ‘environmental protection’, we should not limit ourselves to the protection of forests and renewable electricity sources. Although these are fields in which Costa Rica has excelled for decades, there are other areas, lesser known but just as crucial to the health of the planet, where Costa Rica is lagging behind. One of them is the just labour transition, in the context of projects that, in 2021, following the pandemic, seem overly ambitious.
How did Costa Rica transform its electricity grid?
Costa Rica’s electricity grid is entirely fuelled by renewable energies. Hydroelectric plants are the main source, but there is also a significant portion of geothermal and biomass energy, as well as more recently integrated wind, solar and biogas power.
Around 33 per cent of the electricity supply is generated by five hydropower plants: Reventazón, Angostura, Arenal, Miguel Dengo and Cachí. This is nothing new. The country’s first hydroelectric plants were built in the 1950s by the Costa Rican Electricity Institute (ICE).
Lawrence Pratt, former director of the Latin American Centre for Competitiveness and Sustainable Development (CLACDS) and professor of sustainable development and environmental business strategy at the INCAE Business School in Costa Rica, tells Equal Times that they are the result of the good foresight shown by decision-makers in the past.
“It was in the 1950s when Costa Rica decided that it didn’t have nor would it ever have enough foreign currency to continue buying and importing oil to generate electricity. Since we have so many mountain ranges and so many fast-flowing rivers, hydropower was the obvious choice. And then geothermal energy came along. It was a good choice for Costa Rica. The oil price shocks of 1973, 1979, 2007, etc., had less impact [...]. Now, with the concerns about climate change, Costa Rica seems visionary,” says Pratt.
As Marco Vinicio Zamora, coordinator of the Friedrich Ebert Foundation (FES) Socio-Ecological Transformation Project for Central America explains, ICE workers were able to secure a gradual just labour transition for themselves over the years during which the hydropower plants were opened, thanks to the trade union front representing the thousands of ICE workers.
Today, the ICE does not only have one trade union but a broad labour front with unions representing workers by trade, such as manual labourers’ unions, engineers’ unions, etc.
“The development of the ICE as an institution and as a company responsible for electricity generation plans has been accompanied by strong union organising and the defence of labour rights, in the public sector. But we also have to take into consideration the conditions of workers in the private electricity generation sector, which has a strong anti-union tradition and takes advantage of the various forms of labour outsourcing, especially in the area of construction,” underlines Zamora.
In present-day Costa Rica, the trade union tradition is almost exclusively limited to the public sector, which employs 15 per cent of the country’s workforce. The private sector, which employs 85 per cent of workers, has next to no trade unions. This represents a real challenge in terms of ensuring a just transition in the future, precisely due to the growing outsourcing trend.
It is also important to note that although Costa Rica’s electricity supply comes from renewable sources, not all of the energy consumed in the country is electric. The largest part, in fact, corresponds to land transport. And here, imported fossil fuels continue to reign supreme.
According to a study published by the FES in 2016, the main source of energy in Costa Rica in 2015, taking into account the primary domestic supply and imports, was petroleum derivatives: “The primary domestic supply in Costa Rica is extracted from renewable sources, but more than 70 per cent of the secondary energy supply comes from non-renewable sources, mainly petroleum derivatives, obtained through imports,” says the study.
These are not the kind of facts often highlighted in foreign media reports about the Central American country. And yet this is one of the major challenges facing Costa Rica.
An ambitious plan for the future: ‘decarbonising’ the country
In 2018, Costa Rica launched a plan to ‘decarbonise’ its economy, in which it promises a just transition. For now, it is all there in black and white but there has been no attempt to approach the public workers’ unions. The lack of unions in the private sector also risks undermining this transition. And accomplishing it within just over three decades is already a challenge in itself, the aim being to achieve macro changes by 2050, such as replacing the current public and private vehicle fleet with an electric one, developing better energy policies and improving environmental sustainability in the agri-food sector.
“The energy sector associated with the mobility of people and freight is the greatest challenge in the decarbonisation plan: electric mobility and public transport are the two biggest challenges in terms of achieving energy system transformation and a just transition,” says Zamora of FES Costa Rica.
In the recent past, the businesses running the public transport sector have been reluctant to adopt basic changes, such as electronic fare collection, which would improve price regulation. They have also criticised the government’s project for a high-speed electric train, which seeks to add to the public transport supply in the country’s four largest cities by linking it with the bus route network, which has not been redesigned for decades and is now obsolete.
According to the International Labour Organization, the fundamental principles of a just transition include maximising the creation of green jobs, decent work and sustainable enterprises, minimising job destruction and supporting workers who lose their jobs, along with communities adversely affected by the changes.
All of this has to go hand in hand with social dialogue. And despite the Costa Rican government’s talk of a just transition in its Nationally Determined Contributions (NDCs), talks with trade union organisations are conspicuous by their absence.
Fanny Sequeira Mata, general secretary of the Rerum Novarum workers’ confederation, the CTRN, which is affiliated to three international trade union organisations, tells Equal Times: “To date, the CTRN has not been invited to take part in any government initiative for a just transition. There is no social dialogue framework for holding consultations, discussions or promoting consensus-based public policies to develop this crucial issue. It should be noted that the CTRN has always been committed to social dialogue and has always made this clear, but one of the features of this government has, unfortunately, been its failure to engage in such dialogue.”
“The government of President Carlos Alvarado Quesada is anti-union by nature. It has done nothing to initiate talks with the ANEP and the confrontation with our organisation in particular has been constant. One of the reasons is that Alvarado serves the interests of big business in the country and follows a strictly neoliberal approach to economic policy,” says Albino Vargas, general secretary of national public and private employees’ union ANEP.
Equal Times sought an official statement from the Ministry of Environment and Energy, but two weeks after making enquiries through official channels, no response had been received.
True, the pandemic has not facilitated progress with the decarbonisation plan, but the inaction or sluggishness seen in its early stages contrasts sharply with the accolades the country is now receiving for the policies of previous governments. The plan, for example, envisaged that there would be a 100 per cent electric bus service in the Greater Metropolitan Area by 2022, but only three electric buses had been received by December 2020 and they were only put into service at the beginning of August 2021.
“Costa Rica has national policy instruments such as the 2015-2030 VII National Energy Plan, the 2018-2030 National Electric Transport Plan, the 2018-2050 Decarbonisation Plan, the international commitment to implement the Sustainable Development Goals (SDGs) and the Paris Climate Agreement, but its implementation culture is not so strong. The issue is not on the agenda of public sector trade unions, for example,” adds FES coordinator Marco Vinicio Zamora.
Can a country as small as Costa Rica really influence and bring about change in much larger and richer countries?
For specialist Lawrence Pratt: “As an example, Costa Rica is important. Electricity from renewable sources is just one interesting aspect, along with 35 per cent of its land being protected, its reputation for ecotourism, the moratorium on mining and oil exploration [...]. But there are many contributing factors. The country has repeatedly decided that it should not develop extractive activities because it is small, or that it is not suitable for heavy industry because it has neither the cheap energy nor the infrastructure required, for example. Having understood this, an industrial sector based on services, technology and light goods led to the development of sectors such as tourism, medical devices and other high-value, low-energy products. It’s an ensemble of factors: partly historical, partly good luck and partly good management.”
Pratt lists the strengths of the Costa Rican economy: its capacity to host and offer tourism and ecotourism services; its domestic production of high-tech medical equipment and pharmaceutical products for import; its production of foodstuffs for which there is high international demand, such as coffee, bananas and beef. And its powerful image-building as a green country.
It remains to be seen whether this triad of “historical factors, good luck and good management” will return as the pandemic wanes and the horizon clears again. The country will need it if it wants to make timely progress with its decarbonisation plan and maintain its role as an environmental model.