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Costa Rica – Sometimes money does grow on trees


Costa Rica

The happiest place on Earth in 2016 – what country wouldn’t want that title?

A state with sustainable wellbeing and high life expectancy, where residents feel satisfied with life and harmoniously interact with the environment. An unlikely country holds this title, a country which despite still being in development, managed to achieve economic success without draining its natural resources.

So which of this great planet’s countries is the greenest of them all and how did their labor bear such golden fruit?

The name given by Spanish explorers to what they believed to be the tropical Eden, which hosts a heavenly great amount of species, turned out to be an excellent omen: Costa Rica – the rich coast. Rich in natural resources, rich in life, rich in human development, rich in happiness.  And, as it turns out, rich in sustainable growth.

The Happy Planet Index

Costa Rica has been crowned for the third time “the happiest country on Earth” by the New Economics Foundation, in their Happy Planet Index, following their 3rd placement in the Environmental Performance Index report’s ranking, in 2010. The purpose of this index is to rank countries according to four variables:

  • Life expectancy – The estimate number of years that people born in the same year are expected to live, if current mortality rates remain constant. This is an indicator of mortality and thereby also of health conditions and the population’s access to medical services. For long term development, it becomes indicative of a population’s growth potential and can even be reflective of health effects as a consequence of environmental degradation.
  • Wellbeing – An assessment of how people perceive their lives and quality thereof. This indicator is based on a survey and relies on one question: Respondents are asked to imagine themselves on a ladder with ten steps, whereby the top represents the best possible life, whilst mentioning on which step they feel they are at the moment.
  • Inequality of outcomes – A more complex calculation of the inequalities within a specific country as far as the people’s life span and happiness degrees are concerned. It is expressed as a percentage, resulting from the difference between the product of mean life satisfaction & mean experienced wellbeing and the result of inequality-adjusted life satisfaction and inequality-adjusted experienced wellbeing.
  • Ecological footprint – This indicator, expressed in global hectares, evaluates the average amount of land needed per capita to sustain a country’s regular consumption. This includes areas which provide resources, land covered by infrastructure, as well as surfaces needed to absorb CO2. The indicator is based on several metrics such as GDP, carbon emissions, import and export, all calculated per capita.

The novelty of the Happy Planet Index relies on the fact that it places great weight on environmental impact as a driver of sustainable prosperity. Thus, it is not directly indicative of individual happiness, but rather on a country’s actual and future ability to sustain human wellbeing.

The authors of the index consider the rigid prioritization of pure economic growth to be one of the main causes for the string of crises humanity is facing at the moment.

Wealthy countries, such as China and the USA received low rankings within the index. Most surprisingly, Luxembourg takes up the second last place.  The index developers claim that “If life in Luxembourg was replicated across every other country, we’d need 9.1 planet Earths to sustain us!”

These rich countries received high scores on life expectancy and wellbeing, but their overall results are low because of the environmental price they pay for their economic success. It seems the forbidden fruit is indeed the sweetest and economic growth remains most nations’ number one desire.

Despite this, Costa Rica seems to be the planet’s golden child. Costa Ricans live longer than US citizens and do so with a per capita ecological footprint that’s just one third of that the US is responsible for. But how?

Costa Rica

The seeds of success have been planted

Costa Rica’s road to development is paved with surprising measures: decades ago, the country chose to offer protection to the environment and to deny protection to itself. It is one of only 22 nations worldwide that does not have a standing military force.

Thus, for over 65 years, army funds have been reallocated to sectors such as health, pensions, education and environment.

Costa Rica was wearing a large, green dress 50 years ago: over three quarters of its surface was covered in indigenous woodland. That dress became outrageously revealing 40 years later, when less than one quarter of the country’s surface retained forest cover as a result of profit seeking initiatives: banana plantations and cattle production for US food-chains.

However, new national measures “tailored” over the years brought along astonishing results, so that today the forest covered area has doubled.

Furthermore, by 2005 Costa Rica managed to secure 25 national parks, 8 biological reserves, 58 wildlife refuges and 11 forest reservations, as well as 32 sheltered areas, resulting in the protection of 26% of the national territory.

To complete this new picture, painted in green colors, the government has pledged to reach carbon neutrality by 2021, which would be an unprecedented accomplishment worldwide. This task starts seeming credible if we consider the fact that in 2015, the country was able to produce an astonishing 99% of its electricity from renewable sources.

Costa Rica

The fruit of yearlong labor

Two important factors, which made the country flourish like a green bay tree, should be mentioned here:  The Costa Rican PES Program (Payment for Environmental Services) and ecotourism.

1. The PES program proves that the government recognized the financial potential which lies in the state’s forests and rural areas. Introduced in 1996, the scheme relies on rewarding farmers and land owners if they offer four bundled environmental services: watershed protection, carbon sequestration, landscape beauty and biodiversity protection.

For instance, farmers may receive payments in accordance with the number of trees they plant on their property or with the degree to which they conserve natural species or water resources.

The system is mostly self-financed and relies on five main budget sources: a fuel tax (3.5 per cent from every fuel sale), a water tax, agreements with both public and private water corporations (hydropower generators and bottling companies), grants and loans (i.e. World Bank loan, GEF grant) and various market instruments (issuing of reforestation bonds and ES certificates).

However, the PES is not flawless. Some of the main cons are the great amount of paperwork needed for the application or the difficulty of the poor to participate in the program (hard access to information, high transaction costs etc.).

However, overall, the program has been functioning for 20 years and is credited for having turned Costa Rica into the only tropical country on the globe with reversed deforestation.

2. Tourism, the second factor, constitutes one of the country’s main sources of revenue, as it is regarded as one of the most popular eco-touristic destinations in the world.

Costa Rica accounts for 5% of the world’s biodiversity and its geography varies from ice-smooth tropical beaches to boiling hot volcanoes and perfumed rainforests. Its proximity to the United States is also an important contributor to its success as a destination.

While Costa Ricans cannot be credited for this rich geographical legacy, its preservation is entirely to their merit, forming thereby a virtuous cycle: the preserved environment brings along revenue, which can be further invested in maintaining natural resources.

Ecotourism is an efficient way of bringing foreign income into the domestic economy, strongly contributing to the development of disadvantaged rural areas for example, by creating job opportunities and strengthening local economies.

Certainly, among the flowers of development, weeds grow too. Even though the country has benefited from a constant economic expansion, political stability and social development, according to the World Bank, they still have to take measures against a lacking fiscal system and high inequality rates.

Although these are important factors to be considered, the sometimes peaceful historical waters of Costa Rica will surely find a way to sway the tides towards improvement. The rich coast: a green patch of land, embraced both by the Caribbean Sea and the Pacific Ocean, shrouded in the misty aroma of coffee, fruit and spices.

It is a history of environmental safe-keeping, which could make almost any country worldwide turn green with envy, or, hopefully, just turn green.

Image sources:

Mexico - Stepping up their environmental protection game
Barbados - bridging the gap between man and government


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