A Green Costa Rican COVID-19 Recovery

The coronavirus disease 2019 (COVID-19) pandemic has profoundly affected Costa Rica, especially its most vulnerable population groups. Prior to the onset of the pandemic, Costa Rica had been taking a leading role in addressing the global climate crisis through investments in adaptation and decarbonization. The pandemic, however, led to a sharp increase in unemployment; the number of unemployed workers increased by over 240,000 people between February and June 2020, and the unemployment rate peaked at over 24 percent, exacerbating prepandemic inequities.

In this follow-on analysis to their 2020 study on the benefits and costs of Costa Rica's National Decarbonization Plan (NDP), the authors evaluate how investment in decarbonization through the NDP could improve employment and economic growth in the near term as Costa Rica recovers from COVID-19. Using a computable general equilibrium model, the authors estimate that five years of decarbonization investments would offset the lingering impacts that COVID-19 would have on employment and economic activity.

The authors also describe how decarbonization could help Costa Rica make progress in achieving the United Nations Sustainable Development Goals (SDGs)—a key tenet in Costa Rica's decarbonization vision. The authors conclude with recommendations for how decarbonization investments could be best targeted to provide additional near-term economic benefits, how these investments should be deployed and coordinated to generate long-lasting positive benefits across the different sectors of the economy, and how these investments could be prioritized to meet different SDGs over time, considering the progress the country has made on each one of them.