Healthy Investing in Costa Rica's Nature Economy in 2020

May 13, 2023 in Discover Costa Rica, Tips for Buyers

Costa Rica’s nature economy is a central part of its economic regeneration plan in 2020 The response to the COVID-19 pandemic has shown the world's ability to diverge from business-as-usual to protect public health and safety. Costa Rica wants to carry that momentum forward to address the threats of climate change and environmental degradation while also rebuilding the economy stronger than ever. It plans on doing this by putting nature at the heart of its recovery plan. Ambitious and diverse action is being undertaken by Costa Rica to demonstrate that solutions exist and that the world should not go back to "business-as-usual". The COVID-19 pandemic has unleashed a global health and economic crisis that has exposed the fragility of the world’s systems — including the natural world — on which people rely for food, water, and air. Decisions made by governments in response to the COVID-19 pandemic will determine the future health, wellbeing, and resilience of people and the planet.

Costa Rica’s pledge to regenerate the environment and the economy

The World Economic Forum’s new policy recommendations are offering Costa Rica and other governments around the world the chance to maximize the economic opportunities that lie in nature. They aim to do this by delivering 395 million new green sector jobs by 2030 while protecting the natural capital needed for public health, food, and societal resilience. For this reason and many more, Costa Rica has decided that protecting and restoring nature is economically beneficial Green investments have a longstanding history in this country. Costa Ricans believe in nature-based solutions for everyday life. It's natural that nature would be a central theme to their economic revival. Carlos Manuel Rodriguez, Costa Rica’s Minister of Environment and Energy, says that Costa Rica’s new strategy is to view nature not as an unlimited resource but as the foundation of economies designed for greater resilience, equity, and human health. “First we need to understand the direct relationship between pandemics and zoonosis (transmission of animal-human diseases),” says Rodriguez. “Only by establishing a balanced relationship with nature can we see key benefits such as improved quality of jobs, food, and water security, as well as improved human health.” Rodriguez believes in “building a circular economy that grants longer periods of regeneration to ecosystems” and “societies in which we can capitalize on nature without destroying it”. Bold policy ambition and political leadership are needed to realign the Costa Rican economy and society with climate neutrality and with a way of life in harmony with nature. This will make the economy and society more resilient. The coronavirus crisis has shown how important forests and green spaces are for human wellbeing. And the country's open spaces, fresh air and water, and lots of forested areas are what is attracting more and more people to Costa Rica. Geoffrey Okamoto, First Deputy Managing Director of the IMF, said that despite the coronavirus continuing to claim lives around the world, in economic terms the global situation is “less bad” than initially feared, particularly in advanced economies. But the picture is not homogeneous. Ecuador, Argentina, Bolivia, Peru, and Mexico have been very affected economically by the COVID-19 crisis, while others, such as Costa Rica and Uruguay, “have been able to weather this quite well from an economic perspective,” he claimed. This is likely due to the two Latin American countries’ disproportionate focus on eco-conservation and nature-based tourism.

Costa Rica’s history of change

Costa Rica has been championing nature-positive actions, as a backer of forest conservation, renewable electricity, and biodiversity protection. Starting from the 1980s, the country stopped and reversed forest loss, while the economy grew 2.5-fold in real terms. Costa Rica has committed to be fully decarbonized by 2050, including measures for transportation, infrastructure, energy, agriculture, waste management, and forest management — increasing forest cover to 60% by 2030. With major policy changes such as restricting logging permits, paying landowners who conserve their land, and attracting overseas investment in eco-tourism, Costa Rica reversed its decades-old trend of deforestation. It has doubled its forest cover, which covers more than half of the country and continues to grow as the government creates more national parks to preserve natural ecosystems, from highlands and cloud cover to mangroves and rainforests. And by tying the need to preserve biodiversity to the economy, Costa Rica has gotten citizens involved. Minister Rodriguez says: “if nature becomes a driver for growth and the economy — economic development — people won't want to destroy nature. So, in a matter of a generation — over one generation — we went from people destroying the forest to produce food, particularly livestock, to protecting nature, restoring nature, and using it as a way to bring tourists to the farms and the parks. And that has been tremendously successful.”

Costa Rica is leading the way to rebalance our troubled relationship with a nature economy

This year has revealed the extent to which nature underpins our human health, security, and prosperity. The warming climate and rapid loss of biodiversity are sounding a planetary emergency alarm. Costa Rica’s goal is to help us improve health and well-being by nurturing nature. Healthy ecosystems can provide clean water, clean air, protect against natural disasters, furnish life-saving medications, and ensure long term food security. The World Economic Forum estimates that nature provides $125 trillion in assets to humanity, but more than half of global GDP ($44 trillion) is potentially threatened by biodiversity loss. This September, Costa Rica’s President Carlos Alvarado Quesada joined leaders from 70 countries and the EU in endorsing the Leaders’ Pledge for Nature, which is committing to decisive action on nature to protect human and planetary health. Never before has such a large number of heads of states come together at the highest level and agreed on common language clearly stating the importance of responding to the interconnected crises for people and the planet and jointly committing to action. On October 1, world leaders from the five continents pledged to put the protection of nature at the heart of their recovery plans from the COVID-19 pandemic during the first-ever UN Biodiversity Summit at the 75th UN General Assembly. Absent from that pledge were countries including China, India, Brazil, and Australia. The U.S. failed to participate in the summit altogether, and Russia sent a representative in the place of the president. Germany, the UK, France, Canada, and New Zealand were among the signatories, as well as Colombia, Costa Rica, Kenya, and Mexico.

The future of tourism in Costa Rica

Pandemic-related lockdowns, flight cancellations, and border closures may be putting a crimp on vacation plans. The precipitous drop in tourism will have an outsized impact on countries that rely on foreign travelers with potentially large-scale effects on their economies’ national accounts. Costa Rica appears to be getting something right, though. The Central American country of stunning beaches, rainforests, and biodiversity is also known for its stable democracy and educated population. President Carlos Alvarado Quesada, said at Davos 2019: “Seventy years ago, Costa Rica did away with the army. This allows for many things. Eight percent of our GDP is invested in education because we don't have to spend on the army. So our strength is human talent, human wellbeing.” A highly educated population, Costa Ricans appear to have learned from their mistakes and become one of the most environmentally forward-thinking populations on the planet. “We saw in the eighties that the forest coverage was reduced to 20% due to animal farming and timber. We've managed to recover all this and we’re back to forest coverage of 50%. By this, we are combating climate change,” said President Alvarado. Forests are of crucial importance to the country’s biodiversity, which hosts more than five percent of the world’s species, despite a landmass that covers just 0.03% of the planet. President Alvarado said these efforts have helped boost Costa Rica’s economy. “Many people say that to protect the environment goes against the economy. Whereas it’s the complete contrary. Our tourism has grown precisely because of this.” As a result of past, current, and likely future efforts, Costa Rica is consistently voted as the happiest and most sustainable country on Earth, according to the Happy Planet Index (HPI). This index, which has been published four times since 2006, takes the wellbeing and longevity of a population; measures how equally both are distributed; then sets the result against each country's ecological footprint. And Costa Rica has topped the poll three times out of four.

Final thoughts on Costa Rica’s future

In spite of the hardships caused by the coronavirus pandemic, we are living through a moment of great opportunity to rebuild our world in a way that will have a lasting and positive impact. The pandemic has demonstrated that businesses have a conscience and are willing and able to work for the greater good. Now is the time to prioritize sustainability and the protection of our planet for future generations. Costa Rica is ready to commit to better business practices in order to create a more sustainable and inclusive world for all.  costa-rica-nature-economy 

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