By: Laurie Goering and Sebastian Rodriguez – Reuters – In late July, Costa Rica’s legislature was scheduled to vote on a bill to permanently ban any extraction or exploration of oil and natural gas in the Central American nation, noted for its international green leadership and reliance on clean hydropower.
The same day, the Costa Rican Chamber of Industries sent an eight-page letter to all 57 lawmakers, defending possible future exploration for natural gas and asking them to reject the ban.
“Countries like Norway or Finland have financed their fiscal deficit and their pension systems with oil and gas exploitation. Why would a country like Costa Rica not take advantage of those resources?” it asked.
Lawmakers ultimately did not vote on the proposed ban – a frustration for climate change activists – though a tweaked version is now waiting for executive approval to move back onto the legislative agenda.
“Costa Rica with drilling towers is no longer Costa Rica. Just one exploration will create heavy damage,” warned climate change campaigner Pia Carazo, a member of the “Costa Rica Free of Drilling” movement.
At the COP26 U.N. climate talks, Costa Rica and 24 other countries, development banks and national groupings – including the United States and Canada – on Thursday pledged to end public finance for new fossil fuel exploration and production overseas by the end of 2022.
If implemented, the landmark pledge could push close to $18 billion a year in international funding not just out of coal but also the oil and gas sector in developing countries, according to campaign group Oil Change International.
Laurie van der Burg, Oil Change’s manager of global public finance campaigns, said the pledge’s signatories were “doing what’s most logical in a climate emergency: stop adding fuel to the fire”.
Jean Su, director of the energy justice programme at the Center for Biological Diversity, told media at the Glasgow talks it was “the first political commitment to phase out oil and gas”, which is a key advance in the push to combat climate change.
But big international fossil fuel funders including China, Japan and South Korea have not signed the commitment, Su noted.
In addition, the pledge does not cover funding for “abated” fossil fuels – oil and gas projects equipped with technology to capture their emissions – nor already approved projects.
Crucially, campaigners said, the pledge by countries from the United States to Costa Rica and Ethiopia also does not apply to fossil fuel investments within their own countries – and there is no clear commitment to use funds shifted from fossil fuels to expand the use of renewables.
“We welcome them ending international fossil fuel finance but what is important is starting that at home,” said Mohamed Adow, director of Nairobi-based think-tank Power Shift Africa.
COAL FIRST, NOT OIL
Organisers of the COP26 talks have made ending finance for coal power, the dirtiest fossil fuel – as well as winning commitments to end its use for power production – a major goal.
On Thursday, about 23 countries pledged to phase out the use of coal power, and major international banks said they would end finance for new “unabated” coal by the end of 2021.
But the International Energy Agency has said that to keep planetary heating to 1.5 degrees Celsius – the more ambitious goal of the Paris Agreement – new investment in not just coal but also oil and natural gas needs to end this year.
In practice, a transition that swift is proving hugely challenging, even in the world’s greenest-leaning countries.
MONEY TO GO GREEN
In Costa Rica, “we are hearing some political parties say we should follow the Denmark example, and that we should use oil and gas to pay for our green transition,” said Andrea Meza, Costa Rica’s minister of environment and energy, earlier this year.
“We are very clear that this is not the right path,” she told a panel organised by the International Renewable Energy Agency.
But lawmakers for the country’s right-wing Partido Unidad Social Cristiana (PUSC), along with some independent legislators, have said they will not back the measure to ban fossil fuel exploration in Costa Rica unless gas is removed.
“We are not going to renounce natural gas,” said PUSC leader Pablo Abarca.
Carazo, of the “Costa Rica Free of Drilling” movement, said ambitious green measures in the Central American country – as in many places around the world – face opposition from relatively small groups with big political clout or cash.
“The lobby comes from just a few people, but they have well established connections and several political channels of influence,” she said.
Carlos Montenegro, executive director of the Chamber of Industries, said the government is “just trying to show off” with the bill. Resources from gas exploitation could be used to fix Costa Rica’s economic woes, he added.
“To solve our problems of unemployment, fiscal crisis and pension funds, we could explore and exploit natural resources in a regulated and environment friendly way,” he said.
But Meza described using fossil fuel expansion to boost economies as “not the pathway of the future”.
In a country already mainly powered by renewable energy, “we should be investing our resources in electrification … (and) generating more jobs aligned with that vision,” she said.
