How to save the planet and bring about world peace

One more urging from me to head over to this page to check out James’ explosive new investing opportunity – going live tomorrow.

I sit next to James in the office, and his excitement is palpable. I couldn’t write to you today with pointing you in its direction.

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Now, to world peace…

The Paris 2015 Climate Accord. 195 countries unanimously agreeing on positive change.

I can’t think of a single instance in history where such an incredible feat of global cooperation was achieved.

It was a well-publicised moment in history.

But behind the headlines, someone who can claim a large portion of the credit for this success has gone unheralded.

Her name is Christiana Figueres. She is the UN Climate Change Chief.

Figueres became the United Nations’ climate change chief in 2010. Back then, a global climate change agreement seemed unachievable. Five years later, 195 governments signed the Paris Climate Agreement, vowing to keep the rise in global temperature below 2 degrees Celsius

Figueres is from Costa Rica.

Which is apt, considering that Costa Rica generates over 98% of its electricity from renewable sources. (This is excluding fuel for transportation, which is unavoidably fossil fuel intensive.)

Geography buffs will know that Costa Rica is very mountainous, and volcanic. Mountains mean rivers for hydroelectric and dams. Volcanoes provide geothermal energy. Together, these sources alone provide over 90% of the country’s electricity.

So, it’s fair to say it is blessed, geographically.

But that is true of many other countries. Scotland is the windiest country in Europe, and hasn’t matched this feat.

That’s because Costa Rica has another secret.

The Northern Triangle

You might remember the migrant caravan headed for America which was making headlines last year. The caravan was made up of people from Guatemala, Honduras and El Salvador. They were fleeing that triangle of Central American countries as violence there skyrocketed.

The gun-related homicide rates in those countries place all three in the top five globally. The charity Médecins Sans Frontières described the experience of people living in the northern triangle as “not unlike that of individuals living through war”.

In 2011, Honduras had the highest homicide rate of any country not at war, at 86 per 100,000 people. The number in Mexico, famous for its drug-related violence, was 20.

An investigation by Honduran newspaper La Prensa found that people in those three countries pay over $600 million in annual extortion fees to organized crime groups.

Panama has gained the unwanted title as a world capital for money laundering and corruption. Political upheaval plagues Central America almost indiscriminately.

Costa Rica is a close neighbour. How does it compare?

Very well. Its murder rate per 100,000 people is over 80% lower than Honduras, at just 11.8. Costa Rica is not a paradise. Violence still exists. But there is a famous saying in the country: “Blessed is the Costa Rican mother who knows her son at birth will never be a soldier.”

So Costa Rica is a both renewable energy leader, and an oasis of (relative) peace in a very violent corner of the world.

Perhaps Ms Figueres’ family tree can help us understand why.

Peace and prosperity

In 1948, Jose Figueres (Christiana’s father), was president of Costa Rica. He took the bold decision to disband Costa Rica’s army. He re-wrote the constitution to make it a lasting act.

Until 1989, Costa Rica was the only country in the world without a standing army. Then, Panama followed its example. This created the first ever non-militarised border.

I don’t want to push the connection too far. It is really fascinating though. It goes against everything you might think. A government without an army running a less violent country than its well-armed neighbours?

Not only has the lack of an army provided peace. It’s also allowed other aspects of Costa Rica to flourish. Renewables, for example. Money was spent on dams and hydro power stations instead of guns and soldiers.

This gave Costa Rica energy independence. It also created jobs. Because the private sector could provide adequate jobs, the drug cartels and criminal gangs found fewer recruits. The same cannot be said in the rest of Central America.

Democracy stabilised too.

The army has long been a source of political power in many countries. But not in Costa Rica. Compare that to Mexico. Mexico’s army has many parts, and is so intertwined with the drug cartels there that they are often indistinguishable.

Without such a potent political force in Costa Rica, democracy has been able to survive.

It holds presidential elections every four years. Two major parties compete, and neither has dominated for long.

The lack of violence also meant that tourism became an important part of Costa Rica’s economy. You can immerse yourself in its beautiful landscape in safety. The same isn’t true in the northern triangle.

Money not spent on the military gave rise to other welfare projects.

Education in Costa Rica is free and compulsory. Its system is ranked 20th in the world.

Healthcare is also free for all citizens. The UN rates its healthcare system as better than the US, and number one in Latin America.

Can other countries learn from Costa Rica’s example?

Interior Minister Alvaro Ramos certainly thinks so. Ramos, 62, said the change [abolishing the army] led to many advances for Costa Rica, especially in the 1950s and ’60s.

“The standard of living of the sick, rural society went up, (and) we built big hospitals, but most importantly, there was a massive education boost.”

Costa Rica highlights the relationship between national success, international power, and energy.

Investing in renewables has helped grow its economy. Money saved on fuel import costs can be spent on schools and hospitals instead.

Abolishing the army has actually reduced violence in the country. It has also allowed democracy to continue unimpeded by ambitious generals.

And now one of its own, Ms Figueres, has been responsible for one of the greatest successes in environmental history.

Costa Rica has been at the forefront of a global energy market shake-up.

The technological change that’s sweeping through the sector is turning the investment case around.

James Allen, Southbank’s resident energy expert is offering you a way to get involved in one of the biggest investment trends of the next few decades.

Technology and energy have the power to dramatically alter the international balance of power.

On Monday, I wrote to you about the Meiji restoration in Japan. That showed just how powerful technological advancements can be.

The energy market is in the same position today. Energy technology is advancing rapidly, and costs are falling too. A great combination for the planet, and for investors.

Click here to find out how to invest in this epochal energy market shake-up.

Kit Winder
Exponential Investor

Category: Energy

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