Evolution begets revolution

Through nature we have evolved, slowly. Our ancestors appeared six million years ago, but the modern human form only evolved about 200,000 years ago. Today nature is forcing us to progress, but we don’t have nearly as much time, not by a long shot.

Transforming our planet took very little time, after the industrial revolution, and to fix that mess we have years, not decades. The 740 pages of a recent UN report conclude that “it is necessary to adopt urgent measures on an unprecedented scale to stop and reverse this situation and thus protect human and environmental health”. The time has come for us to evolve again, and to transform the way we relate to nature and the way we build our societies. Never better said, evolution begets revolution. Because what is urgent now is revolution to disrupt business as usual.

Moving forward

I recently attended a conference on creating a green fiscal matrix in Costa Rica. That is, on how to use taxes and tax incentives as a tool to achieve environmental objectives. I was invited by someone I once knew as a student at the University of Costa Rica, when I was a professor, and now he directs his own magazine in Semanario Universidad and organizes invaluable events like this one. Time does not forgive, and climate change will not either.

I loved seeing an overwhelming female participation in the event, and meeting students of Environmental Engineering of the Costa Rican Technological Institute. The panel, in addition, was composed by three women and three men. Fabulous!

The discussion, organized by Ojo al Clima and sponsored by the Embassy of Canada in Costa Rica.

Mess with the wallet

Johanna Arlinghaus, economist and former member of the OECD team that evaluated the fiscal matrix of Costa Rica, said in the panel that taxes are among the best policy instruments to shape our behavior. Well designed environmental taxes could make those who pollute more, pay more. They are effective, because the government can create sustained change at a lower cost. Through taxes, the State increases its collection and can invest in social projects, reduce other taxes, increase public spending or reduce its debt.

And one thing that I love: environmental taxes can also boost innovation, evolution! If companies or individuals want to pay less taxes, they will have to find solutions, such as carpooling, using public transport, improving technologies, etc.

We don’t like taxes. But what do we do then? We, and everything we consume, are transported, and the carbon footprint is very high.

So what’s the deal, Costa Rica?

Johanna’s talk dealt with the evaluation of the current environmental taxes of Costa Rica. Of the taxes that have to do with fossil fuels and energy, where transportation is a fundamental factor.

Between 2003 and 2014, Costa Rica increased its vehicle fleet by almost 70%,. Around 20% of the taxes collected by this country come from those related to transportation: the vehicle ownership tax, yearly tax, transfers of used vehicles, etc.

Johanna had some recommendations on how to create a green fiscal matrix, but things got even more interesting when Fernando Rodríguez, former Deputy Minister of Finance, made a very important clarification: none of these taxes were created because of environmental considerations, but for purely fundraising purposes. The Ministry of Environment and Energy was not even part of the commissions that shaped those taxes.

As things stand, we have a lot of work ahead, because we have exemptions left, right and center, and some of those should worry us. Like the fact that diesel, which is much more polluting than gasoline, pays a lot less taxes. Or that we subsidize fuel used for fishing, knowing that many extraction practices are not sustainable and that in many cases that fuel is used for illegal activities.

Diesel is much more polluting and carbon intensive than gasoline, so why does it pay less?

Finances, meet environment

Financial institutions and environmental institutions have realized that they have to talk and design a common language. Fortunately, it seems that is beginning to happen. Pamela Castillo, from MINAE, and Mónica Rodríguez, from Costa Rica’s Central Bank, talked about it.

I was especially excited to learn that since 2016 the BCCR created an environmental statistics area, which produces models. We can ask questions such as: “If I create a tax for activities that produce more CO2, how does that affect the rest of the system? Or a tax on the most polluting products? And what happens if we replace the fuel in transportation, for energy? It is fascinating! The BCCR already has a statistical framework for water, forests and energy. In the future, they will have frameworks for ecosystem services (finally!), environmental protection spending and taxes related to the environment.

I am obsessed with the economic valuation of ecosystem services and I LOVE to work with Conservation International on such projects.

My biggest obsession remains the oceans. I hope that soon Costa Rica becomes truly aware of its immense marine area, and stops thinking only in terrestrial terms. I hope that the projections and models take into account the extraordinary climate, food, territorial services, among many others, that our Exclusive Economic Zone offers us. But more than anything, I hope that this evolution soon triggers the revolution, and we enter a new stage of human experience, in which progress and conservation always go hand in hand.

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