as a partner for securing essential natural resources and protecting the climate
01 — Die Leitfragen zum Partner Atlas
RELEVANCE: What relevance does Costa Rica have for Germany with regards to "securing essential natural resources and protecting the climate"?
Costa Rica generates nearly 100 percent of its electricity consumption from renewable energy sources. The country is also considered a leader in nature conservation. More than 25 percent of Costa Rica’s land is devoted today to nature conservation areas. With its Decarbonisation Plan, adopted in 2018 with an implementation deadline of 2050, the country is setting important standards and leading the way both regionally and internationally. Currently, the Environmental Commission of the Costa Rican Parliament is working on a bill that would officially ban oil and gas exploration and in the country. Against this backdrop, Costa Rica can undoubtedly be considered a major player when it comes to safeguarding significant resources and protecting the climate.
For Germany, the country can play a particularly important role as a supplier of green hydrogen. The past decade has seen an increasing number of initiatives for producing and utilising green hydrogen. A bill promoting a green hydrogen economy is currently before the Costa Rican Parliament. The opportunity for developing additional, relatively inexpensive renewable energy sources, coupled with the fact that the country has sufficient water reserves, indicates considerable potential for the production of green hydrogen here.
Germany has set itself the goal of becoming an international pioneer in green hydrogen and, in the longer term, the world market leader in hydrogen technologies. To achieve this goal, it must rely on partner countries. Costa Rica would be an ideal candidate for close cooperation in the hydrogen sector. The aforementioned unique energy policy features and the country’s geostrategic location with access to the Atlantic Ocean – the location of Central America’s only deep-water port – as well as the Pacific Ocean are interesting criteria for further cooperation.
At the same time, Costa Rica faces greater challenges in the area of environmental and climate protection than might initially be expected. The use of renewable energies has indeed come a long way here, but electricity represents only a small share of total energy consumption in Costa Rica. Much of the energy is used in the transport and heating sectors. A poorly functioning public transport system, lack of investment in traffic infrastructure and an outdated vehicle fleet – the average age of vehicles in Costa Rica is 16 years, compared to nine years in Germany – lead to comparatively high CO² emissions in the traffic sector and constant congestion on the streets of the capital of San José. There is an urgent need to take action to expand and modernise the traffic infrastructure, especially with regard to public transport Furthermore, the cultivation of bananas and pineapples in huge monocultures and with massive use of pesticides has disastrous effects on the environment – a fact that is often overlooked in public promotion of the country.
WILLINGNESS: To what extent is Costa Rica willing to work with Germany in realising this interest?
Costa Rica takes a pronounced interest in promoting climate protection and safeguarding important resources. The country is proud of its trailblazing role in sustainability – a self-image that is deeply rooted among the population. Moreover, this policy approach is conducive to attracting international donor funds and generating revenue in the economically vital tourism sector.
Costa Rica is committed to multilateralism, international free trade and human rights. This makes the OECD member an ideal partner for joint initiatives to promote sustainability and climate protection in multilateral forums. At the last UN Climate Change Conference (COP26) in Glasgow, in 2021, Costa Rica underscored its strong engagement in climate and environmental issues. Co-chaired by Costa Rica and Denmark, 11 governments launched the Beyond Oil and Gas Alliance (BOGA) with the aim of reducing global dependence on fossil fuels.
As part of this initiative, Costa Rica maintains alliances with numerous stakeholders that are committed to this goal at the international and regional levels, including Germany as a prominent partner. Germany enjoys an excellent reputation in Costa Rica, especially in the field of energy and environmental technology.
STATUS QUO: How close is Germany and Costa Rica's current cooperation in this area?
Germany has been supporting Costa Rica’s climate policy for years, in particular through projects fostering a sustainable economy and infrastructure and the protection of biodiversity. The Gesellschaft für Internationale Zusammenarbeit (GIZ), for example, is carrying out numerous projects on behalf of the Federal Ministry for the Environment (BMU) geared toward promoting sustainability and combatting climate change. In 2021, Germany donated 10,000 trees to support Costa Rica’s ongoing reforestation projects and financed three electric buses to collect relevant data that will eventually enable the model to be applied to the entire public transport system. In addition, Germany lends the country support within the framework of the “Green Development Fund for the SICA Region”.
The private sector in particular is in a good starting position: Numerous German companies based in Costa Rica have discovered investment potential in recent years in backing Costa Rican aspirations for sustainable and energy-efficient policies.
POTENTIAL: What is the potential for strengthening the partnership between Germany and Costa Rica in this area?
There is great potential for bilateral cooperation between Germany and Costa Rica in the field of resources and climate protection. Costa Rica is on a constant quest for international partners and remains an interesting location for direct investment due to its solid economic development and stable democracy. As a business location, the country benefits from high social and ecological standards, which in turn guarantee adherence to German and European legal norms. This is significant not least given the adoption of the German Chain Act.
Costa Rican climate policy undoubtedly includes the development of hydrogen as fuel, offering potential for stepping up cooperation with Germany. As a sales market, the focus is mainly on the export of green end products from and for transport, traffic and agriculture. Cooperation between the two countries in the field of hydrogen could therefore provide important incentives for economic recovery and strengthen the future viability and competitiveness of both countries. Through the project, €12.5 million is already being invested in transforming production systems into low-carbon, climate-resilient pathways over the next few years.
At an event organised in 2021 by the Konrad Adenauer Stiftung and the German-Costa Rican Chamber of Industry and Commerce, economic and political leaders from both countries once again expressed their interest in a possible energy partnership.
POLICY RECOMMENDATION: What in German foreign policy has to change in order to fully exploit this potential?
Costa Rica is the ideal partner in terms of German foreign policy, as the two countries share a wide range of interests and values. The country is committed to promoting multilateralism and the liberal democratic world order. It has also recently emerged as a regional clean energy player. Germany should take these factors into account when selecting its international partners, choosing to support beacons of stability and democracy. Particularly in view of the current geopolitical situation, Germany will be increasingly dependent on diversifying its energy sources. Costa Rica offers political and economic stability and should therefore seriously be considered as a partner – especially in the hydrogen sector.
Other countries such as China, Australia and the United Arab Emirates seem to have already discovered Costa Rica’s potential. In February 2022, Australia announced that it would invest US$3.3 billion in developing a hydrogen project. In late 2021, Costa Rican President Carlos Alvarado held talks in the United Arab Emirates regarding collaboration on green hydrogen production. And China is emerging as a market winner here, particularly in the area of technology supply for photovoltaic systems and energy storage systems.
In the long run, Germany’s good reputation alone cannot compete with what other countries have to offer. An energy or hydrogen partnership would therefore be an important step towards strengthening lasting cooperation with the Central American country – and thus promoting the future viability and competitiveness of both countries.
Nicole Stopfer is head of the KAS Regional Programme Energy Security and Climate Change in Latin America, which is based in Peru.
Evelyn Gaiser heads the KAS office in Costa Rica.
02 — Foreign Office
Auslandsbüro Costa Rica
Besucheranschrift: Rohrmoser, Avenida 3/Calle 78A, casa esquinera
Postanschrift: 640-1200 Pavas, San José
03 — Die Region
The strategic partnership between the EU and Latin America was established as part of the first European Union, Latin America and the Caribbean (EU-LAC) Summit in June 1999. The principle underlying the strategy and the subsequent association and partnership agreements with individual countries and regions on the South American continent was the assumption that the EU and the countries of Latin America are united by many shared values and interests.
- Population: 19.450.953
- Capital: Santiago de Chile
Brazil is the largest country in South America, the fifth-largest country in the world, and the largest economy in Latin America. It also accounts for more than 60 percent of the Amazon tropical rainforest, the world’s largest, and includes a large proportion of renewables in its energy mix. The country’s geographical location, size, economic significance and the importance of preserving its natural resources in the fight against the global climate crisis all underpin the central role Brazil plays in ensuring and maintaining global climate, energy and food security.
- Population: 212.559.417
- Capital: Brasilia
In the context of the competition between political systems involving Russia, China and the western democracies, Colombia is of significant strategic importance to Germany and to Europe as a whole, both as a partner in values and as a regional anchor of stability. In terms of population size, economic power, geographical size and wealth of resources, it is one of the most important countries in Latin America.
- Population: 50.882.891
- Capital: Bogota
In connection with organised crime, drug trafficking, and the infiltration of the state by criminal groups, Mexico – a regional leader and member of the G20 – is facing major challenges that affect both internal and regional security. In view of the cross-border effects of organised crime in Mexico, which extends far beyond the American continent, migration from Central America and other regions of the world through Mexico towards the USA, the significant economic potential as a manufacturing base offering a well-qualified workforce and privileged access to the US market via the North American Free-Trade Area, Mexico is of great importance for the stability of the region.
- Population: 128.932.753
- Capital: Mexiko-Stadt
Costa Rica generates nearly 100 percent of its electricity consumption from renewable energy sources. The country is also considered a leader in nature conservation. More than 25 percent of Costa Rica’s land is devoted today to nature conservation areas. With its Decarbonisation Plan, adopted in 2018 with an implementation deadline of 2050, the country is setting important standards and leading the way both regionally and internationally. Currently, the Environmental Commission of the Costa Rican Parliament is working on a bill that would officially ban oil and gas exploration and extraction in the country. Against this backdrop, Costa Rica can undoubtedly be considered a major player when it comes to safeguarding significant resources and protecting the climate.
- Population: 5.185.625
- Capital: San José
Peru is an exception in Latin America in terms of its enormous wealth of resources and biodiversity. The country has three large landscape zones: the coast, most of which is covered by desert, the Andes and the jungle region. According to the World Resource Institute, Peru is one of only eight megadiverse countries in the world, possessing 84 of the 104 existing life zones. 76 percent of the country is occupied by rainforest, which means that the country has the largest share of the Amazon rainforest after Brazil.
- Population: 32,971,854
- Capital: Lima
Mexico is the second-largest economy in Latin America, and is a member of the G20, the OECD and the WTO. After the USA and China, the European Union is its third-most important trading partner. Given its geographic proximity to the US and the economic, cultural and social interrelationships between the two countries, especially as part of the successor to NAFTA (North American Free Trade Agreement) which came into force in July 2020 – the Tratado comercial entre México, Estados Unidos y Canadá (T-MEC) – Mexico plays a special part in this economic context.
- Population: 128,932,753
- Capital: Mexico City
According to official data from the Colombian migration authorities, approximately 1.8 million of the more than 4 million Venezuelan migrants are currently in Colombia.Commuters and so-called “transit migrants“ are not included in these statistics, which means that their actual number is probably even higher.
- Population: 50,882,891
- Capital: Bogota
In comparison to other Latin American countries and despite its modest size, Uruguay serves as a model in view of its impressive political and socio-economic achievements . In a region that is not always stable, the country can look back on a long democratic-republican tradition with functioning institutions and a diverse media landscape. According to the latest edition of The Economist‘s Democracy Index, Uruguay is currently the most democratic country in Latin America and is ranked 15th worldwide.
- Population: 3,473,730
- Capital: Montevideo
Brazil is the largest economy in Latin America and, with a GDP of approximately 1,5 trillion US dollars, is one of the most important emerging markets in the world. The country has a domestic market of 214 million inhabitants and is rich in natural resources.
- Population: 212,559,417
- Capital: Brasilia