This year has provided a grim preview of what climate scientists say the world is becoming. Suffocating heat in the Pacific Northwest killed 200 people. Torrential rains and flooding across Europe killed at least 200 more. In New York, smoke from western wildfires turned the sun red; in Madagascar, people ate locusts to stay alive as croplands turned to sand.
Almost every country on Earth has pledged to slash carbon emissions to slow the gears of global warming. The Biden administration has promised a “clean energy revolution” that would make the United States carbon-neutral by 2050. The European Union has proposed ending the sale of gas-powered vehicles by 2035.
But in the race to cut carbon emissions, Costa Rica has been leading the way. It adopted its own plan in 2019, promising to show the world what a net-zero carbon future could look like. Its plan would transform almost every facet of its economy, from car sales to cattle farming. A recent RAND analysis found that might be what it takes to break our reliance on carbon — and it might make Costa Rica tens of billions of dollars richer.
“Many people might assume that this is a big investment for a return that’s quite uncertain and based far out in the future,” said David Groves, who led the project as a senior policy researcher at RAND and is now with the World Bank’s Climate Change Group. “But our №1 finding is that, for a country like Costa Rica, the net benefits are very likely to be positive.”
The most important number in climate science right now is 1.5. When world leaders talk about slowing climate change, 1.5 degrees Celsius of postindustrial warming is the line they do not want to cross. After that — around 2 degrees — the best projections say tens of millions of people will face flooding or famine; almost every coral reef in the world will die.
Carbon is not the only driver of climate change, but it is the big one. Released from tailpipes and smokestacks, it can stay in the atmosphere for hundreds of years, trapping and reflecting heat. The Intergovernmental Panel on Climate Change warned in August that global temperatures will very likely soar past that 2-degrees mark by the end of the century without steep cuts to carbon emissions. Its models show a world that is hotter than at any other point in the last 3 million years.
Costa Rica alone could not budge the total amount of carbon circulating in the atmosphere even if it bulldozed cities, outlawed cars, and shifted its entire economy to subsistence farming. It has one-sixtieth the population of the United States, and one-six-hundredth the carbon emissions. But its plan provides a glimpse of what a carbon-neutral future will look like.
Electric cars on the road. Electric trains shuttling workers to the office towers of the capital, San José. Reclaimed forests; and, in the fields, more efficient management of crops and cattle. All of it powered not by coal or by gas, but mostly by the sun and the flow of water through dams.
“We do this,” former president Oscar Arias said, “with the hope that, eventually, we will be able to show the world that what ultimately needs to be done, can be done.”
But can it? The Inter-American Development Bank, which is investing hundreds of millions of dollars in Costa Rica’s vision, posed that question to researchers from RAND, the University of Costa Rica, and the Costa Rica Climate Change Directorate. The researchers couldn’t just look into the future to see how that plan would turn out. So they looked into 3,003 futures.
Costa Rica would meet, or almost meet, its goal of net-zero emissions by 2050 in more than three-quarters of the futures they modeled.
Using computers, they modeled different assumptions, different scenarios — an economy booming or growing slowly, more demand for transportation, less demand, forests shrinking or thriving. Their guiding question was not “Will this plan work?” but “Under what future conditions will this plan not work?”
They found that Costa Rica would meet, or almost meet, its goal of net-zero emissions by 2050 in more than three-quarters of the futures they modeled. It did even better than net-zero in nearly half of those futures, achieving net-negative emissions. That would mean that Costa Rica’s vast forests and other carbon traps were inhaling more carbon from the atmosphere than its cities and industries exhaled.
The researchers estimated that Costa Rica’s plan would require up-front investments of around $37 billion. But it would provide $78 billion in savings and benefits, a return of 110 percent. Those ranged from increased crop yields to lower transportation costs to less congestion and fewer crashes on the streets of San José.
In fact, the costs of Costa Rica’s plan exceeded the economic benefits in only 21 of the 3,003 futures that RAND’s team analyzed. Higher-than-expected technology costs and slower-than-expected uptake could push the needle into the red. So could a super-heated economy that brought more people into the cities. Conventional cars becoming much more fuel efficient than they are now could also throw off the plan, if drivers put off buying even more efficient electric cars.
“What Costa Rica is doing is assuming the future economy will be driven by industries that are carbon neutral,” said Edmundo Molina Pérez, who coauthored the report as a collaborator from the Monterrey Institute of Technology and Higher Education (Instituto Tecnológico y de Estudios Superiores de Monterrey) in Mexico. “They’re basically catapulting their economy to a position that will make them more competitive and distribute the benefits of economic development more broadly, while at the same time keeping emissions low and mitigating climate change.”
Costa Rica has some unique advantages here. More than half of its map is colored green with forests, the result of one of the world’s most successful forest-conservation programs. It already has invested in an electric grid that runs almost entirely on hydropower. It has the political will; a national ethos of pura vida, or pure life; and a constitution that recognizes a healthy environment as a right of citizenship.
The Costa Rica analysis shows how countries can take action and make investments that hold up, regardless of what future comes to pass.
Nonetheless, there are some important lessons here for other countries. RAND’s analysis found significant benefits to decarbonization in the agricultural sector, for example. Across Latin America, that sector provides back-breaking wages in exchange for back-breaking work. Making it more efficient and cost-effective could improve the lives of some of the lowest-income workers in society.
More generally, the Costa Rica analysis shows how countries can take action and make investments that hold up, regardless of what future comes to pass. “This is the way we need to think about the problem,” Groves said. “You can’t just go and make a projection of how you’re going to decarbonize. You have to really think about the risks of not achieving it, and how you can manage those risks.”
RAND’s findings underpinned recent government decisions in Costa Rica on roughly $500 million in loans to get that electric train up and running in San José. Researchers are now doing a similar analysis in Chile, a country with a much larger economy, and much greater reliance on carbon-venting fossil fuels. They’re also studying the role that carbon-cutting investments might play in Costa Rica’s economic recovery from COVID-19.
That’s a theme that Costa Rica’s outspoken former environmental minister, Carlos Manuel Rodriguez, picked up on in a recent essay. “To ensure we leave this pandemic period in a better position than we started in,” he wrote, “we will need to work hard to steer ourselves toward a brighter and more resilient tomorrow…. It is 100 percent possible to balance the needs of the population with the needs of the planet.”
He made headlines around the world a few years ago with one bold prediction. His grandchildren, he said, will have the same carbon footprint in 2035 that his grandparents had in the 1940s. If Costa Rica does what it says it will, RAND’s analysis shows, they might have no carbon footprint at all within 30 years.
This originally appeared on The RAND Blog on August 30, 2021.
