The Green Economy Tracker, a new benchmarking tool by the Green Economy Coalition, a group of over 50 organizations and businesses advocating for sustainable development, made its debut last week during the World Economic Forum in Davos. The tool looks at “best in class” sustainable development policies in 20 countries across five themes: governance, finance, sectors, people and nature.
To break it down a little, let’s compare two countries geographically near each other and near the U.S., Costa Rica and Trinidad and Tobago, and see what the Green Economy Tracker says about them and their progress. First, a little context.
Both countries are located in the Caribbean, one of the areas in the world most vulnerable to climate change. Many countries in the region have already begun to feel the effects with increasingly intense hurricanes and flooding. And the costs have the potential to be enormous, ranging on average between 1 percent and 6 percent of the region's GDP, but those estimates could be much larger if a particularly strong storm hits. Recovery from Hurricane Dorian, for example, is expected to cost the Bahamas around $3 billion. In addition to mitigation efforts, Caribbean countries also need to think about building resilience to climate change impacts.
But just like other regions in the world, there is a lot of diversity between countries, and the Caribbean is no exception. Costa Rica and Trinidad and Tobago sit comfortably at the top of most lists for wealth in the region. They make an interesting sample for the region in the Tracker.
Costa Rica’s biggest economic driver is tourism, and much of that is their famed ecotourism industry. The country has marketed itself for years as the most sustainably-minded country in the region. So, it is perhaps not surprising that Costa Rica ranks high in the Green Economy Tracker. The country has twice topped the New Economic Foundation’s rankings for sustainable development, it generates almost all of its electricity from renewable energy and has a strong plan to go carbon neutral by 2050.
Furthermore, Costa Rica is also one of a few countries that is on target to meet the Paris Agreement’s commitment to keep temperatures below 1.5 degrees Celsius. The Tracker gives Costa Rica’s policies high marks, but with a little less enthusiasm for its policies on green jobs and pro-poor policies. The country has a problem with income inequality and its financial situation is fragile, causing concern about its ability to ultimately meet its goals, though the signs are still encouraging.
Trinidad and Tobago often tops lists as the wealthiest country in the Caribbean. Its income source could be seen as the exact inverse of Costa Rica’s. It has large reserves of oil and gas, and the petroleum sector provides 35 percent of its GDP, but only five percent of its jobs. Fuel subsidies mean that residents have the lowest energy costs outside the Middle East, leading to high consumption rates. In fact, in 2017, the country has the second highest carbon footprint per capita in the world, after Qatar. Transitioning to renewable energy is an uphill battle when the vast majority of income comes from oil and gas, and that income also helps subsidize the cost of living.
With this set up, Trinidad and Tobago’s poor showing in the Green Economy Tracker is predictable. The only metric is scores well on is safe and accountable banks - every other indicator ranks poorly. The wealthiest country in the region has not put its money on building its resilience to climate change impacts.
We hope that countries that are vulnerable to climate change, like island nations and those with long coastlines regularly exposed to hurricanes, would be eager to take action on climate change and sustainable development. But these two countries show, in stark contrast, that tackling climate change is complicated, even when you are faced with the consequences daily. Short- to medium-term economics plays a greater role in political decision making than long-term climate predictions do.
It’s easy to make blanket statements about regions and their needs, but a deeper dive shows the complexity of transitioning to a greener economy. Costa Rica, in one sense, is lucky to have its economy based on sustainability and ecotourism. The result is a more seamless commitment to climate action.
Though we may wish for Trinidad and Tobago to undertake similar actions, that fact that its wealth is based so heavily in the carbon-emitting petroleum sector makes that wish unlikely in the near future. Tools like the Green Economy Tracker are helpful for comparing countries and showcasing standouts while calling out those falling behind, but it is also important to remember that there are reasons why countries make the decisions they make. That is not to let anyone off the hook for making the transition to a more sustainable and resilient economy, but rather figuring out how to make it work for every individual economy because the storms will show up whether your country’s – or company’s - climate policies are in place or not.
Image credit of Playa Conchal, Costa Rica: Lindsay Loucel/Unsplash
Kate is a writer and policy wonk, with a focus on water, clean energy, climate change and environmental security. She spent over a decade running energy-water nexus and energy efficiency programs at Environmental Defense Fund as well as time at the U.S. Departments of Energy and Defense, U.S. Government Accountability Office, and state and federal legislatures. She serves as an Advisory Board member of CleanTX, which aims to accelerate the growth of the clean tech industry in Texas.