University of Nevada, Reno Hydropower Capital: Costa Rica and the Río Pacuare During Times of Free Trade and Regional Integration A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science in Geography By Denielle M. Perry Dr. Kate Berry/Thesis Advisor May, 2010 Copyright by Denielle M. Perry 2010 All Rights Reserved THE GRADUATE SCHOOL We recommend that the thesis prepared under our supervision by DENIELLE M. PERRY entitled Hydropower Capital: Costa Rica and the Río Pacuare during Times of Free Trade and Regional Integration be accepted in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Dr. Kate Berry, Advisor Dr. Victoria Randlett, Committee Member Dr. Louis Forline, Graduate School Representative Marsha H. Read, Ph. D., Associate Dean, Graduate School May, 2010 i Abstract In response to neoliberal economic pressures since the late 1980s, protectionist policies of Central American countries have been reworked into an agenda that promotes free trade and regional integration. The Dominican Republic-Central America Free Trade Agreement (CAFTA) and the Plan Puebla-Panama (PPP) are complimentary trade and infrastructure integration initiatives that exemplify this neoliberal shift. Hemispheric concerns over climate change and energy security have translated into increased demand for “renewable” resources, moving the construction of new hydropower facilities to the forefront of planning for a regionally-integrated electricity system. In Costa Rica hydrological resources are considered to be the country’s greatest natural resource. The country’s “hydropower capital” has been regulated by the state for over half a century; however, new legislature is increasingly liberalizing private entry into the sector. Coupled with provisions of the CAFTA treaty, these new laws complicate the decision- making arena for development versus conservation. Through an investigation of proposed development on the Río Pacuare this study provides a political economic and political geographical analysis of both the environment in which hydropower project development decisions are being made and the emergence of resistance movements. For over two decades opposition has kept the state-run electric company’s Pacuare dam development plans at bay. Nonetheless, realignments of national and regional political economic forces give rise to new pressures to pursue hydropower projects on the Río Pacuare. This thesis considers the historic circumstances, regional impetus and national pressures in the energy sector that influence proposed hydropower development on the river. Additionally, countervailing pressures to protect the cultures and environment of the Pacuare are examined. Further initiatives to both develop and resist hydropower are considered as a reflection of political geographic conditions in which international, regional, national and local scales are linked. ii In memory of Captain Bryan Tomasetti “Do what makes your heart sing” iii Acknowledgments Gracias to all of the people of Costa Rica who, for nine years, took me in to their lives as one of their own and who, along with the Río Pacuare, have inspired this work. Thank you Eugenio Guido and members of Amigos del Río Pacuare for all that you are and all that you do. To Phil, Poca and Angel, thank you for being my guides to the waters of the Pacuare and for being my Tico family. To the Cabecar people of the Pacuare, thank you for trusting me to do this work. Endless gratitude to my advisor, Dr. Kate Berry, for her patient tutoring while I learned the ropes, her benevolence while I tread water and her encouragement as I braved the many rapids of this project. To Dr. Louis Forline who inspired me with his academic stand against the system and guided me on theory. To Dr. Victoria Randlett for her expertise in Political Economy and her talks of everything but, thank you for keeping it real. Thank you to Dr. Starrs and Dr. Hausladen for the time and expertise gratis. Additional thanks go out to the remaining faculty of the UNR Department of Geography and Sherry Bauman for helping to fill in the gaps. To my fellow grad school colleagues, you made it worth living; special thanks to: Kayla, Katie and Mariela. Additional thanks to Dr. Stephen Cunha for inspiring a career in Geography and Francisco (Cisco) Guevara for opening the door to a world of rivers. Ultimately, without my family none of this would be possible. The most heartfelt thank you to my Mother for encouraging my adventurous spirit and setting me free to make my dreams come true, to my Father for nurturing my intellect and relationship with books, and to my grandparents for connecting me with Mother Earth. Thank you all for your patience and support on this journey. iv Table of Contents Abstract i Dedication ii Acknowledgement iii Table of Contents iv List of Tables v List of Figures vi List of Acronyms vii 1. Introduction 1 2. Background on the Political Economy of 20th Century Latin America 8 3. Implementing CAFTA’s Success: the PPP & SIEPAC infrastructure development 21 4. Costa Rica: the hydropower capital of Central America 37 5. The Rio Pacuare Case: Discourse on Hydropower Development 69 6. Conclusion 103 7. Appendix A 110 8. Appendix B 116 9. Bibliography 117 v List of Tables Table 2.1 The1994 Washington Consensus on Reform 16 Table 2.2 Selected multilateral trade agreements in Latin America 18 Table 4.1 Family ties to political positions in the Arias administration 62 vi List of Figures Figure 2.1 Export economies relied on Coffee, Cocoa and Bananas 10 Figure 2.2 Depiction of Theodore Roosevelt and the Big Stick Policy 11 Figure 2.3 Protest of economic disparities and international lending institutions 17 Figure 3.1: This map highlights the Nicaragua Route and Panama Canal in 1864 22 Figure 3.2 CAFTA signators countries: US, DR, GT, ES, HO, NI, CR, PA 25 Figure 3.3 SIEPAC trajectory minus extended Panama portion 31 Figure 3.4 Rates of Generation to Consumption in Central America 34 Figure 3.5 2006 Installed Capacities for Electricity Generation in SIEPAC countries 36 Figure 4.1 Four cordilleras and ample rain create 34 watersheds 46 Figure 4.2 Costa Rica Energy Sector & Regional Economic Policy Trends Timeline 48 Figure 5.1 The Río Reventazón and Río Pacuare and impacted communities 72 Figure 5.2 Río Pacuare Dam complex 73 Figure 5.3 Dos Montañas Canyon and PH Siquirres site 76 Figure 5.4 PH Siquirres projected reservoir 77 Figure 5.5 This bridge is the main point of entry to the Nimari Reserve 81 Figure 5.6 School in the Nimari community center 82 Figure 5.7 Collecting traditional remedies 83 Figure 5.8 Rafting advertisements to arriving tourists at the airport 85 Figure 5.9 The Angostura Dam on the Río Reventazón 88 Figure 5.10 River flow in Río Reventazón pre-Angostura Dam 89 Figure 5.11 Post dam stream flow in Río Reventazón 89 Figure5.12 Timetable of Permitting process with SETENA and ICE for PH Pacuare 96 Figure 5.13 Ballots for the historic plebiscite 97 Figure 5.14 Renewed resistance campaign “The people already said No to the Dam” 100 Figure 5.15 University of Costa Rica students protest Pacuare dam 101 vii List of Acronyms ACOPE Asociación Costarricense de Productores de Energía (Costa Rican Association of Energy Producers) ADRP Amigos del Río Pacuare (Friends of the Pacuare River) ARESEP Autoridad Reguladora de los Servicios Públicos (Public Service Regulating Authority) BCIE Banco Centroamericano de Integración Económica (Central American Economic Integration Bank) CACM Central American Common Market CAFTA Central America Free Trade Agreement CNFL Compañía Nacional de Fuerza y Luz (National Power and Light Company) EBASCO Electric Bond and Share Company ECLAC Economic Commission for Latin America & the Caribbean EIA Environmental Impact Study FDI Federal Direct Investment FECON Federación Costarricense de Conservación del Medioambiente (Costa Rican Environmental Conservation Federation) FTA Free Trade Agreement IADB Inter American Development Bank ICE Instituto Costarricense de Electricidad (Costa Rican Electricity Institute) ICT Instituto Costarricense de Turismo (Costa Rican Tourism Intitute) IRN International Rivers Network MINAE Ministerio del Ambiente y Energía (Minster of the Environment and Energy) NAFTA North America Free Trade Agreement PH Proyecto Hidroeléctrico (Hydroelectric Project) PM Proyecto Mesoamérica (Mesoamerica Project (formerly PPP)) PPP Plan Puebla Panamá PROAL Asociacion de Proyectos Alternativos para el Desarrollo Social (Association of Alternative Projects for Social Development) REDLAR Red Latinoamericano Contra Represas (Latin American Network Against Dams) SETENA Secretaria Técnica del Nacional Ambiente (Technical Secretary of the National Environment) SIEPAC Sistema Integrada de Electricidad para América Central (Central American Integrated Electricity System) SNE Secretaria Nacional de Electricidad (National Secretary of Electricity) TSE Tribunal Supremo de Elecciones (Supreme Electoral Tribunal) UCCAEP Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado (Costa Rican Union of Private Business Sector Bureaus & Associations) 1 Chapter 1: Introduction Deep in the heart of the Talamanca Mountains of Costa Rica, the Río Pacuare emerges as a vital artery cascading through the tropical forest on its course to empty into the Caribbean Sea. This river sustains numerous indigenous Cabecar communities of the Reserva Indígena Alto Chirripó-Cabecar Nimari and provides a physical boundary from mainstream society.