Costa Rica’s Energy Paradise: Comment on Tom Friedman (Not everywhere can be a playground for the rich)
In his recent New York Times op-ed, Thomas Friedman veritably gushes about the long-term commitment of Costa Rica to a clean environment and renewable energy. He is proud of the fact that renewables power 95 percent of the country’s economy. Such energy air-conditions resort hotels, charges golf carts, powers cable pulleys through the rain forest canopy, and bakes chips at the local Intel assembly plant.
Costa Rica’s energy mix is led by 75–80% hydropower, 12% geothermal, and 3%–5% oil (more specific statistics are here). The workhorse hydro is a mix of storage and run of river, with storage at about 50% of the 2,000 MW installed capacity. In a dry year, the run-of-the-river plants will not produce much, or very reliably, which brings up the risk of such reliance. In 2007 Costa Rica suffered power cuts as a result of drought and its lack of diversity in electricity generation.
Mr. Friedman also is impressed that the locals have banned offshore drilling for oil and gas, which leaves them entirely dependent on imported oil for their petroleum-transportation sector. But in an earlier column on Denmark’s commitment to wind energy, “Flush With Energy,” he neglected to mention this country’s commitment to offshore drilling, which is primarily responsible for their energy independence. In fact, Denmark exports nearly half of such production.
Costa Rica has been extremely successful in developing its hydro resources (wish we could build dams in the U.S.), with most of the rest of its power supply coming from geothermal. Less than 5% of electricity generation comes from oil. (Most environmentalists now oppose large scale hydro as damaging to the environment and native peoples, but Friedman did not mention that either.)
Electricity accounts for roughly 14,200 barrels per day equivalent end-user energy (about 35,000 barrels/day if you assume losses typical of thermal plants). The rest of the country’s energy, about 45,000 barrels/day, comes from oil with about 2% from coal. And this electricity is not cheap. At an average price of about 13 cents per kWh, Costa Ricans pay roughly twice what we pay in the U.S. But then, no one ever said that near-total reliance on renewables to generate electricity was a way to save money. Last year, electricity rates increased between 11 percent and 41 percent for all users in the country.
Costa Rica has worked hard to maintain its image as an eco-friendly tourist destination. And this approach has paid off, with tourism, especially eco-tourism, accounting for almost 10% of 2007 GDP and more than 13% of total employment. Tourism is a greater contributor to the country’s GDP than for virtually any other country in the region.
Accordingly, energy use in the country is geared to light industry, agriculture, especially energy crops, and electricity use for domestic and tourism. However, it still takes a lot of conventional energy, mostly jet fuel, to take tourists like Mr. Friedman to Costa Rica so that they can marvel at the pristine environment, and that is not likely to change for a long time.
The path that Costa Rica has chosen (with a good deal of government planning) is tailored for tourism, not for those locals not engaged in the care and feeding of eco-minded foreign visitors. This country’s energy model hardly applies to a large country with a diverse population, or even a small one that seeks to diversify its economy away from tourism and plantation agriculture.
And note that a country as wondrous and diverse in natural and man-made attractions as Brazil, has a tourism sector that is just one tenth that of Costa Rica’s relative to its economy. The fact is that industry and tourism do not mix readily—consider the coast of Maine, the mountains of Colorado and Wyoming, or the beaches of Brazil. But the money spent by tourists is usually earned in just the types of economic activities that people do not care to visit while on vacation.
Random Thought. Would the Natural Resources Defense Council or the World Resources Institute welcome an expansion of large scale hydroelectricity generation in the U.S. to emulate Costa Rica–or dedicate a significant proportion of U.S. agricultural land to biofuels or plantation export crops as in Brazil? Should Costa Rica look at some high tech fossil plants as a clean way to keep the lights on all the time and provide enough energy for an economy that can move beyond tourism and tropical fruit?