Interview Rowan Gibson Zurück
Jose Maria Figueres
Just before the Climate Conference in Copenhagen José Maria Figueres Olsen, the former President of Costa Rica, will explain how he transformed Costa Rica into an environmentally conscious country. He will also explain why he considers climate change to be the biggest challenge for humanity and the opportunities this will present for companies who will face up to these challenges.

Interview: Global Viewpoints -- INSEAD Special Series

Energy, Environment & The Impact on Business,
Part 3 in the Series
José Maria Figueres Olsen
Former President of Costa Rica & Former CEO of the WEF

(Interview by David Nicholson)

1. Hello and welcome to Global Viewpoints, a partnership between INSEAD and BusinessWeek. My name is David Nicholson. Thank you very much for joining us today and we would like to welcome José Maria Figueres Olsen, who is the former president of Costa Rica. Also former CEO of the World Economic Forum and now CEO of Concordia 21, an investment vehicle and very fierce proponent of tackling climate change and the various environmental issues that go alongside that. Thank you very much for joining us José Maria.

Now as President of Costa Rica, there’s clearly an environmental prerogative and need to act to make sure that your country was maintained in the best possible shape. Is that what initially inspired you to take on this subject?

On the one side, yes of course. But on the other side the very clear realisation that in the world of today we need to shift the paradigm of development towards sustainable development. That means putting an equal emphasis on strong macroeconomic balances and at the same time privileging at an equal footing strategic investment in social aspects such as health and education and a concern and a care for the environment.

A concern and care for the environment, not just because of what it means in terms of its own values and contributions to humankind and to life on the planet, but because it also makes good business sense. Yes, I am a tree hugger and very proud of it. But, yes I am also absolutely convinced that the only way we’re going solve the environmental dilemmas of today, those main ones being the fight against climate change is transforming this into a good business proposition and that can be done. Costa Rica is a shining example of it.

2. Well tell me how that was achieved? But presumably your period in office, which was 1994 to 1998 was an important one because the debate was just starting to reach to the higher echelons of political life. What did Costa Rica do under your guidance that changed in that time?

Making environmental solutions into good business propositions is too important to be left in the hands of government alone. This is really something that requires a multi-stakeholder commitment in order to do it well. And that is exactly what we put together in the case of Costa Rica.

The government has a responsibility to come in with good regulatory frameworks that create the space for the private sector to be able to invest in. The private sector then has the responsibility to come in with its leadership, its resources, its entrepreneurship and its capital. And make good business opportunities out of the space that has been created through regulatory frameworks.

And civil society has the responsibility to accompany the process and improve it in many ways in which it can only do so well. So let me give you some concrete examples. Back in 1996 in Costa Rica we passed a carbon tax – most likely the first carbon tax ever, on this planet.

We charged the tax at the fuel pumping stations when people were purchasing their fuel for their vehicles. Because if you were going to be burning the fuel in your vehicles and emitting carbon we already wanted to pay for the cost of capturing that carbon and bringing it back out of the atmosphere.

The proceeds from the carbon tax went into a fund we set up to purchase environmental services. And that fund began to finance the planting of trees by small farmers in Costa Rica. Through which the process of photosynthesis would fix the carbon back out of the atmosphere.

We began purchasing other environmental services such as the protection of aqua firs that were feeding into hydro-electric projects. So as to continue generating a vast majority of our energy demand by renewable sources. We also went to other lengths in terms of putting forward these policies.

A second example would be what we did with respect of eliminating the subsidies on our national parks. Costa Rica has had a long tradition of strengthening its national parks. But most of the entry fees to these parks were terribly subsidised.

When we eliminated the subsidies, we created the space for many entrepreneurs to set up private national parks and wildlife reserves and butterfly farms and bird watching activities. And thus, created yet other business opportunities around sound conservation practices.

As a matter of fact by the combination of these policies our area under national parks and protected wildlife reserves increased from 32% of the national territory up to 34% of the national territory in only four years of government. And, at the end we were already a very strong branding of the word ecotourism. Today when people talk about ecotourism they almost automatically think of Costa Rica.

3. Which of course bring many millions of visitors to the country every year I guess. And bringing with them their carbon footprint as they fly from all the parts of the world. How do you fact that into your calculation?

Today ecotourism is the second dollar earner for the Costa Rican economy after our high-tech exports. Both are very well aligned in terms of maximising the country’s competitive strengths. Yes, you do have a point in that rising tourism means rising carbon footprints within the travel sector. But that is in displacement of other travel. And this travel, in its entirety, is something that in terms of mitigating the climate change, we must deal with at a global level.

4. You’ve played a role on many different international fora, you’re a member of the Clinton Global Initiative, the Carbon War Room, the UN Secretary General’s task force on climate and energy. Are any of these achieving anything? Or do they just sort of do a lot of talking and hope that things will improve?

I certainly hope that each one of them has a competitive advantage in the combined effort to be able to tackle the challenge of climate change. When I say the challenge of climate change I want to emphasise the fact that this is by far, in my opinion, the most important challenge humanity has ever faced.

Simply what we need to do is decouple growth, well being, future economic activity from the emission of carbon. And we have never done that in the past. Throughout the entire history of humanity every time we have advanced and we have developed we have always emitted more carbon. Toward the future we need to continue to fulfil the aspirations of well being and development of peoples around the world.

But at the same time we need to decouple that from carbon. And the decoupling is what provides a tremendous business opportunity in terms of reinventing our livelihoods and our work places and the way we interact within society. Each one of the organisations that I belong to, in the context of the fight against climate change, play a particular role with respect to that fight.

Take for example the Carbon War Room. This is an effort, put together by Richard Branson and 15 other entrepreneurs that are looking at what we could call the low hanging fruit that is out there from a business perspective. Where we can make good business while reducing carbon at the same time.

And there are some of those options. Renewable energy is clearly a very significant one. But even more low hanging fruit than renewable energy is the man side management. If we look at the data of the International Energy Agency, we very rapidly come to the conclusion that by only adopting the technologies that we have today on the shelf we could already reduce our energy demand by between 20 and 30%. And we know that energy is a full 70% of carbon emissions. So that already goes a long way in terms of the reductions that we need to find and put in place in the very short term.

If you look at what the Clinton Global Initiative is doing. That is a place where we are not only broadening understanding with respect to this challenge. Because that is still very much a very important part of this fight. But we are also bringing together the private sector with the NGO world. And some governments in some of these multi-stakeholder platforms for specific and concrete action that can help mitigate climate change.

5. Just to go back to Richard Branson for a second. He introduced a prize for someone who could capture a certain amount of carbon. Or at least provide a blueprint for that. Have you been involved in that particular scheme?

No I have not been involved in that but it is very good way to go. There is a foundation called the X Prize Foundation that is renowned the world over for setting up and offering prizes that would benefit a very concrete objective. In this case the sequestration of carbon emissions.

And it is a very good way to go because it brings a tremendous amount of capital and resources and intellectual power to bear on the problem in the attempt and hope to win the prize.

6. The sort of schemes I’ve heard of are pumping carbon back into oil fields or...oh, there are various ones. Which are the most exciting ideas that you’ve heard that may have a practical application?

There are more than 30 ongoing experiments on different technologies. On ways in which we could recapture carbon in a massive way and bring it back out of the atmosphere. Every one of them still requires work and research and investigation. In the meantime, our responsibility is to emit much less.

We are going to mitigate, adapt and suffer with respect to climate change. There is already enough of climate change going on so we are going to do these three things which I have mentioned. With respect to that, humanity has no alternative.

The alternative we have is to choose the mix of how much we mitigate, how much we adapt and how much we suffer. If, thanks our leadership and our actions, we are progressive and dynamic with respect to these issues, we will mitigate a lot, have to adapt much less and hardly suffer.

If, on the other hand we the lack leadership and the commitment to act now and we lose our window of opportunity, exactly the reverse is what will happen. And that is why it is so important that we move now. That we also reach a high quality agreement come December, in Copenhagen, that begins to bring the world together, both developed and developing worlds in the fight against climate change.

7. Are you going to be in Copenhagen?

Yes I will be in Copenhagen because, together with a group of colleagues, I have launched a special task force called ‘The Global Observatory’. The mission of the Global Observatory is to be able to translate into the language of the common person around the world what is going within the negotiating procedures. We will receive in real time, information from negotiators on what is happening, what are the different positions that countries are taking as they move forward to try to reach an agreement.

A group of scientists from around the world, that we are convening, will interpret these results and amplify them towards the world. Not only explaining them in the common language that they need to be explained, but also giving their opinion whether the negotiations are advancing in the positive direction in which we want them to move or if they are not. And in that sense the global observatory becomes a very convenient transmission belt, between what is happening within the negotiation process and peoples around the world.

8. The way that it’s been explained to me is that Copenhagen depends on the Chinese and Indians for their part moving to say that they will take some form of action to restrict their emissions. And the US, on its side, getting the kind of measures through the Senate and the House of Representatives. So that some legislative change can happen. Do you see either or both of those things happening?

Let me begin by saying that reaching a high quality agreement in Copenhagen is nothing simple. And we should not kid ourselves believing that this is going to be easy. As I have already mentioned at the beginning of our conversation, this is the greatest or the largest challenge that humanity has ever faced. And decoupling our growth from carbon emissions is something we have never had to do in the past. So I don’t, for a minute, take the negotiation process for granted.

Let me also then say that in this one it is absolutely indispensible that everybody participates. If you look at the math, the math is clear. If the developed world, the United States and other developed countries, went down to zero emissions, the emissions coming out of the developing world would still create a tremendous problem of climate change for us.

And, if on the other hand, the countries in the developing world agreed to lower their emissions in a very important way. They could not do so without the technology and resource transfer which they need for their development on a low carbon path from the developed nations.

So this is going to take both the north and the south, the developed and the developing. And it is going to require commitment from all. Yes, the United States will have to come with a viable and credible offer. Yes, China and India will have to do the same. But likewise will all other countries.

9. What do you think could be the key to this? Are there individual characters who can help to forge through agreements, as we saw a few years ago, I think it was in Malaysia. Am I thinking of the right conference? Where one of the UN negotiators was able to really grind out a compromise agreement by keeping everyone awake for about 36 hours. And, in the end, they just said “Okay, yeah, we’ll just sign up to it. Just let us go to sleep.” Who’s the key to reaching some agreement here?

Individual leadership of course always plays a role. And it will play a role again in this negotiation process. What is important, this time around, is that we have a collective understanding of what’s at stake and of where we want to go as a world.

What is important is that we collectively share a vision of the type of society that we want to leave to our children and our grandchildren. What’s relevant is that we keenly understand that in this century we have a tremendous responsibility to fight and win two wars. The war against poverty and the war against climate change. And both can be won with the same measures, if we implement them in a coherent way.

Having said that, it is important that we reach an agreement that has, at the same time, the flexibility to understand and cope with the fact that all countries are beginning to mitigate starting from different vantage points.

So, the agreement we need, in my opinion, is one that I would call of a ‘variable geography’ or of a ‘variable geometry’ is a better way to call it. A variable geometry agreement that recognises that some countries have already started in the fight to mitigate carbon emissions.

Others are just beginning. Still some others will need to emit a bit more before they can start to bring down their carbon emissions, because of the development trajectory on which they are. What is important is that we establish benchmarks down the years, where we can all come back and see that we are fulfilling the reductions that we have promised.

So, for example, the year 2020 has already been highlighted by many countries as a year when at which we should have reduced 20% or 30% of our emissions. Countries already have an agreement - when you listen to what their leaders are saying today - that by the year 2050 we should have mitigated and reduced carbon emissions by 80% with respect to common levels.

So may be between now and 2050 not all countries can move in the same straight line. May be there are small upward and downward movements of these countries as they move towards 80% reductions by the year 2050. It’s important that we listen to those countries, that we accommodate an agreement to their specific needs so that they can go along with the agreement.

But it’s equally important that we then ensure everybody is fulfilling what they have promised. And that, at the end of the day, we do have a world with at least 80% reduction of carbon emissions with respect to what we have today.

10. And that, you think, would head off climate change and we’d be through to a safer future would we?

When one looks at the math of climate change and one hears the scientists, one comes to the understanding that we can solve these challenges. Today we are already with approximately 387 parts per million of carbon in the atmosphere versus 280 parts per million of carbon in the atmosphere. That we have had as the highest point throughout the history of humanity until the dawn of the industrial revolution.

We are also accumulating 2.5 parts per million per year. That means that, if were to continue on a trajectory of business as usual, by the end of the century we would be over 600 parts per million. Now clearly that is way over what the scientists have already established as a threshold of 450 parts per million which would keep the climate within the range of 2 degrees centigrade.

What we need therefore is to lower the present trajectory of growth of carbon emissions and bring it down. So that we stay within the boundaries of what scientists tell us today are the limits that would keep temperatures below the 2 degrees centigrade changes.

11. Tell me when you were growing up did you live, you lived in Costa Rica?

Yes I did.

12. Tell me about the environment where you, as a small child, were growing up. What was it like?

I grew up on a farm about 60 kilometres to the south of San José, the capital of Costa Rica. Very mountainous, very rugged terrain, up through, towards the central mountain range. But there was also quite frankly an environment of very clean and transparent rivers. Of very pure air. A life in perfect harmony with the environment.

I later moved into San José when I began my high school studies. And of course that move into the city, I remember already back then, produced during the first month, a small irritation in my eyes. Because of the smog and because of the contamination of the emissions within the city.

Although there has been today much improved. There’s still clear evidence around the world that the development path that we have taken has not adequately factored in the many externalities that are the cause for many of our respiratory sicknesses and many of our health problems in the world of today. Clearly, we need to come back to a development style which is much more attuned and respectful of nature.

13. And given the prospect of climate change and the various differences that would happen to different countries around the world. What would happen to Costa Rica? What are the forecasts saying?

With rising temperatures not only on land but also in the seas and we have already have a rise of 0.7 degrees centigrade in the seas. We’re going to be seeing rising ocean levels. That of course would have an important impact on Costa Rica as we have extensive coastlines on both the Atlantic and the Pacific.

But Costa Rica with the rest of Central America and the Caribbean is also very much in the path of the hurricanes that we have each year. And with climate change we would have an increased violence and increased strength in the hurricanes. Which of course have proved very destructive to lives, to livelihoods, certainly to our economy over the years. So yes we stand to lose a lot with respect of climate change, as with many other countries around the world.

14. And what about businesses? Not necessarily in Costa Rica but globally. What would like to see business leaders do and put their priorities to tackle this?

When I look at global businesses around the world, I come to the conclusion that they are by now clear that climate change is happening. But many of them have also awoken to the possibility of transforming the mitigation of climate change into a good business opportunity for themselves and for their shareholders.

Look at what Wal-Mart, for example, the largest retailer in the world is doing in terms of greening its supply chain and cutting, therefore, costs. That it is passing on to its customers as lower prices.

Look at what Abengoa, the Spanish company is doing in terms of new technologies with solar plants and specifically solar thermal plants. Of which they are constructing the largest one in the world, outside of Phoenix, Arizona.

Look at what Nissan Renault is doing in signing up contracts with countries such as Israel, such as Portugal, five or six others. To begin to provide them with electric vehicles that would be recharged on a new infrastructure of recharging stations that is already beginning to be deployed throughout these countries. There are many ways in which global business is waking up to the fact that this represents a very good business opportunity.

Global business is now asking political leaders from around the world to get their act together and establish the clear, regulatory frameworks that will send the correct signals to the market. So that the businessmen can get on and invest in the path towards the low carbon economy.

That’s a very positive outlook and thank you very much for being with us today José Maria. All the best with the conference in Copenhagen, I hope it goes as you would wish it to. Thank you again for spending the time with us today.
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