Structural transformation is a movement that has been taking shape in recent years throughout the developing world. In order to transform local economies without exploiting resources or labor it is important to convert subsistence models to efficient producers that have the potential to gain abundance and thrive.
Here at Ethix, we have seen this model employed by many of our manufacturers and supply chain partners. The Carolina Textile District, where one can trace the evolution of a garment from dirt to shirt, is one example of a consortium that sources materials locally and efficiently in an effort to provide safe working conditions and living wages to their skilled workers. The story of how Costa Rica achieved sustainability in Latin America is another example of how impactful a well-organized transition can be on a local economy.
In the 1940s, the small nation of Costa Rica was almost entirely covered in trees and assorted greenery. It boasted a lush rainforest second only to the likes of the Amazon in terms of biodiversity and was home to countless species before exploitation from within and without led to massive deforestation. Logging companies descended on the small nation, setting their sights on untouched trees as a natural resource.
Within 40 years, two-thirds of the rainforest in Costa Rica was destroyed. Clear cutting paved the way for farmland, industrial development, or, in many cases, nothing at all. Today, it remains one of the countries most affected by deforestation in all of Latin America.
This type of crisis is not confined to countries once deemed as “third world”. The U.S. for example has suffered its own blight from industrial efforts, over-farming, and the effects of global climate change. Add to that, the fact that the U.S. consumes 20% of the world’s resources while comprising only 4% of it’s population, and our responsibility to heed the call of structural transformation becomes hard to ignore.
The story of Costa Rica is a great example of the benefits of embracing structural transformation. The small nation is now a global leader in the conservation movement after taking remarkable steps to mitigate damage and restore natural resources. Experts estimate that 75% of the country is now covered in forest; a level not seen since the 1940’s.
We can thank Costa Rica’s stunning example for providing a roadmap that other localized economies can follow to achieve the same goals. The question then becomes, how did they manage such an astonishing transition in just a few short decades?
Fighting the Mistakes of the Past
Today, a form of global systemic injustice attempts to delineate between First and Third worlds. There are regulatory agencies that put restrictions on fossil fuels, logging, and other exploitation in an effort to reduce environmental damage and impact, but it’s easy for a privileged nations to turn a bind eye to the struggle of developing ones.
The burden of rapid industrialization and development requires assistance from more developed nations, but at what price? This discussion of environmental justice is fraught; global climate change is concerning and the Paris climate accord is a positive step toward addressing issues concerning the environment. Adversely, profiteers are always concentrated on a lack of resources and their ability to tap into them.
Although Costa Rica, embraced deforestation for some time, their need to rapidly change course and implement a variety of social policies have brought the country to the forefront of global policy as a shining example of what can be achieved.
Leveraging Tangible Incentives
One of the biggest steps that Costa Rica took to invest in the land itself was empowering the communities that make up the country. They abolished their army and spent the budget that would have gone to the military on an investment in their people. The government afforded citizens land, education, and funds.
The Payment for Environmental Services program, established in 1997 taxed fossil fuels. The money it raised went to landowners who demonstrated a commitment to protecting the environment by responsibly cultivating the land they own. This effort involved protecting water sources, storing carbon, and providing conservation and biodiversity education. Over the last 26 years, this program has given over $460 million to the protection of over a million hectares of forest.
While transformation always starts with an idea, it takes resources to support its implementation. This is the governing principle on which Fair Trade International is founded. Since exploitation is cheap and profitable, support is needed to help those committed to structural transformation.
Funding Growth Without Exploitation
Fossil fuel taxes are not the only funding source used to protect the environment in Costa Rica. They have recently been named one of the happiest – and greenest – countries on earth. Ecotourism is now responsible for around 8.2% of Costa Rica’s GDP and it employs nearly one in ten Costa Ricans. Funding from tourism goes directly to building resources and community support, like schools, hospitals, and other infrastructure that further improves the country.
Renewable Energy Investment
Costa Rica is also a leader in the use of green energy generation for their electricity needs. Almost all (99%) of their electricity is generated using renewable sources, with over 80% of it coming from a series of hydroelectric dams and power plants.
Wind and solar also play a role. Green energy is one of the foremost topics of consideration for fighting climate change and establishing sustainable lifestyles the world over.
Costa Rica is also a world leader in recycling. They have a “pay as you throw” program, where rather than simply paying for trash service, residents pay based on the weight of the trash they throw out. The more they recycle, the lower the charges.
This doesn’t just disincentivize discarding of waste. It also encourages consumers to choose products with recyclable or low-waste packaging to reduce waste at the source. This further encourages companies and product manufacturers to use recyclable packaging. This bottom-up model is inspiringly effective.
One of the greatest challenges in places like the United States is widespread misinformation, poor education, and sheer disbelief in the realities of climate change and the human impact on the environment.
Costa Rica has fought this through systemic educational programs. In addition to investing in the community by building schools, they have also added sustainability courses in all levels of education, from elementary to university, as part of a mandatory curriculum. No one educated in Costa Rica doubts the impact of climate change or the necessity of implementing ways to fight it, even if debates will continue over how best to achieve those goals. Sustainability is also ingrained in the country at the most fundamental levels, and it’s a key part of national development planning.
An Eye on the Future
Costa Rica’s location makes it particularly vulnerable to the risks of droughts and climate change. In an effort to confront this vulnerability, the government has attempted to insulate the country from the impact of a changing environment. In particular, they’ve established a broadly successful desalination process to help maintain fresh drinking water for times of drought, along with protecting natural freshwater sources from damage and contamination.
This is another example of how Costa Rica has an eye on the future. Change takes place over time, but the people and government of Costa Rica are in it to secure a future for their children and grandchildren.
A Success at Risk
Costa Rica still struggles with the burdens of transition. While they generate nearly all of their electricity using renewable hydroelectric systems, they still use gas for both vehicles and home heating, which has led to sub-standard air quality in some parts of the country. The capital even exceeds WHO guidelines in some areas.
That’s not to say they aren’t trying to address those problems as well. This year, Costa Rica announced a project known as “Aligning the Financial Flows of Costa Rican Financial Sector with the Climate Change Objectives of the Paris Agreement,”. The goal of the project, as described in the name, is to adjust and reform elements of the Costa Rican financial sector to better reach climate goals, particularly in terms of emissions. Currently, their goal is to achieve zero emissions by 2050.
This new project will function through the creation of a framework that maps, quantifies, and discloses climate-related impact and financial risks. This will create guidance and financial incentives/impetus to mitigate climate impact.
While there have been fantastic investments in communities and land conservation, income disparity is still high in the country. This will continue to be addressed through policy changes and investment, but it takes identification, development of programs, the aforementioned investment, and time for it all to take effect.
Perhaps the biggest challenge that Costa Rica faces is the fact that the nation is located in the path of devastating storms, which are only growing in intensity and frequency as climate change accelerates. Despite doing as much right as they can, the country is poised to suffer from the impact of the rest of the world.
What We Can Learn from Costa Rica
At the end of the day, Costa Rica shows one thing above all else: change is possible. In a matter of decades, the nation reversed course from massive environmental damage and exploitation and has not only restored what was lost but is continuing to invest in improving it and keeping it going.
Investment in people, growth from the bottom up, education, and a focus on green processes; all of this helps, and all of it builds upon itself. It’s also a shining example of how it takes a collective effort and true incentives to implement change; relying on billionaires to solve the problem isn’t a solution.
Costa Rica is also the first country in the region to receive payments from the World Bank’s Forest Carbon Partnership Facility, with over $16.4 million granted for additional climate support. Not only are they a good example of the progress that can be made, they’re being rewarded and supported for it.
Costa Rica has been set up for as much success as it’s possible to have while still being reliant on the actions of the rest of the world. We can all only hope that the rest of the world gets its collective act together before it’s too late for the most vulnerable places on the planet.
What Can You Do to Help?
Individual action is great, but there’s a limit to what any individual can do without institutional support.
For our part, Ethix has invested as much as we can into sourcing all of our products from sustainable and environmentally friendly producers, with total transparency. As consumers, we can all put our money where it can support those who do the most good. As business owners, we can encourage investment where that investment counts. Together, we can all lift up each other and live up to the example set by Costa Rica.
Daniel Cardozo, CEO of Ethix Merch, is a passionate advocate for ethical promotional products. With a mission to transform global supply chains, he serves on the Labor 411 Foundation and Advertising Specialty Institute’s Promo for the Planet Advisory Board. Daniel is dedicated to empowering socially and environmentally-conscious consumers.