Costa Rica

Note: We have updated the text assessment to reflect the latest policy developments in Costa Rica. The CAT’s ratings and data are from our 2023 evaluation and will be updated soon.

Costa Rica has made good progress towards its climate goals. This shows in the uptake of electric vehicles (EVs) and the enhancement of carbon sinks. However, the current administration are sending worrying signals that the full implementation of the climate policies and measures necessary to meet Costa Rica’s own targets could be deterred.

Key electric public transportation projects have been on pause or have been downscaled in ambition. The oil moratorium bill also faces challenges, as President Chaves has announced his opposition to it, along with his intention to explore Costa Rica’s fossil fuel reserves. Despite these recent developments, the CAT still rates Costa Rica’s climate targets and policies as “Almost sufficient”.

The most important climate policy in Costa Rica is its National Decarbonisation Plan (NDP), which sets out economy-wide policies and actions to meet its net zero target. While Costa Rica had regularly published updates on the implementation of the NDP, the most recent iteration of the report (from 2022) only evaluated progress up to 2021. Some of the most significant goals of the first implementation phase that were considered ‘at risk’ of not being achieved, such as the electrified rail projects, are still under scrutiny by the current government. If this trend persists, Costa Rica's chances of meeting its 2030 emissions targets becomes increasingly unlikely.

Between 2015 and 2022, Costa Rica generated nearly 100% of its electricity from renewables, mainly hydropower. This decreased to 95% in 2023 due to low rainfall conditions. This decreasing trend escalated in 2024, with a quarter of Costa Rica’s electricity generation coming from fossil-fuel-powered thermal plants in April, although this has dropped to under 10% as of July. To sustain renewable electricity production, Costa Rica needs to take steps to diversify its electricity mix, especially by expanding solar and wind capacity.

Costa Rica has reached a considerable national market share of EVs, making up 12% of total vehicle sales in 2023. It has also advanced the deployment of key infrastructure to support its growing EV fleet, although the installation rate of fast charging points has not kept up with EV growth. On the other hand, the steps to electrify public transport and promote modal shift have either made little progress or have been scaled down in ambition, with public transport projects decreasing their planned coverage or not running as a fully electric unit (i.e. diesel-hybrids).

Costa Rica could set itself on a firm 1.5°C-compatible trajectory by considering the following actions:

• Setting a conditional NDC target which also outlines the international support necessary to achieve it.
• Ratifying the oil moratorium, originally declared in 2002, to enshrine the bill into law and ensure that Costa Rica does not become an oil producer.
• Continue to monitor and report progress on the implementation of the National Decarbonisation Plan to ensure that its goals are achieved by Costa Rica’s current policies and mitigation actions.
• Diversify its renewable energy portfolio to reduce overreliance on hydropower for electricity generation, which is heavily affected by weather conditions.

Since the last CAT update, there have also been some positive developments in Costa Rica’s climate policies, including:

• A rapid increase in EV sales.
• The continued development of new policies and initiatives (e.g. NAMAs) to address emissions in the agriculture sector, which accounts for a notable share of Costa Rica’s emissions.
• The biofuel mandate will require gas stations to incorporate 10% ethanol into their gasoline and is a positive sign that some main objectives of the National Decarbonisation Plan are being met, provided it does not result in emissions increases elsewhere.

The CAT rates each country’s targets and policies against (1) its fair share contribution to climate change mitigation considering a range of equity principles including responsibility, capability and equality, and (2) what is technically and economically feasible using modelled domestic pathways which in absence of a better method are based on global least-cost climate change mitigation.

Comparing a country’s fair share ranges and modelled domestic pathways provides insights into which governments should provide climate finance and which should receive it. Developed countries with large responsibility for historical emissions and high per-capita emissions, must not only implement ambitious climate action domestically but must also support climate action in developing countries with lower historical responsibility, capability, and lower per-capita emissions.

The CAT rates Costa Rica’s climate targets and policies as “Almost sufficient”. The “Almost sufficient” rating indicates that while Costa Rica’s climate policies are consistent with the Paris Agreement’s 1.5°C temperature limit, its climate commitments are not, but could be with moderate improvements.

Costa Rica’s 2030 emissions reduction target of “maximum absolute net emissions of 9.11 MtCO₂e incl. LULUCF” is rated as “Almost sufficient” when compared to modelled domestic emissions pathways and “1.5°C Paris Agreement compatible” when compared with its fair-share contribution to climate action. Given that the target already meets its fair-share contribution to limiting warming to 1.5°C, Costa Rica should receive external support to implement its additional climate policies and further strengthen its reduction target.

We rate Costa Rica’s policies and actions as “1.5°C compatible” when compared to its fair share. The “1.5°C compatible” rating indicates that Costa Rica’s climate policies and action are consistent with limiting warming to 1.5°C.

Costa Rica has made strides in implementing its National Decarbonisation Plan, but some key policies and projects have yet to be realised, especially those related to electric transportation and modal shift. On the other hand, Costa Rica’s efforts have been evident in the significant uptake of EVs, which made up 12% of vehicle sales in 2023.

The large majority of Costa Rica’s electricity comes from renewable sources, but in 2024 a notable share of thermal energy (from burning fossil fuels) has been used to compensate for reduced hydropower production due to drought. Efforts to enshrine the fossil fuel moratorium into law have also faced challenges during the legislative process. Costa Rica should focus on expanding the use of its many renewable energy sources instead of increasing its dependence on fossil fuels.

If Costa Rica wants to maintain its 1.5°C compatibility, it should ensure that the measures under the National Decarbonisation Plan continue to be implemented and should also avoid increased fossil fuel use through abandoning the moratorium. The full analysis of policies and action can be found here.

We rate Costa Rica’s 2030 NDC target as “Almost sufficient” when compared with modelled domestic emissions pathways. The “Almost sufficient” rating indicates that Costa Rica’s NDC target is not yet consistent with the 1.5°C temperature limit but could be with moderate improvements.

Costa Rica’s updated climate target represents an improvement compared to its first NDC, however, it is not stringent enough to limit warming to 1.5°C. To improve its rating and be consistent with the 1.5°C temperature limit, Costa Rica could submit a 2030 climate target that is at least 7% lower than its current target (equivalent to an absolute emissions limit of 11 MtCO₂e excl. LULUCF in 2030) and, if necessary, outline the international support that it would need to achieve it.

We rate Costa Rica’s 2030 NDC target as “1.5°C compatible” when compared with its fair-share contribution to climate action. The “1.5°C compatible” rating indicates that Costa Rica’s NDC target is consistent with limiting warming to 1.5°C when compared to its fair share.

Costa Rica has drastically reduced its LULUCF emissions over the past 20 years, reaching net negative emissions in 2014. In 2017, Costa Rica’s LULUCF emissions sink was equivalent to more than 20% of its economy-wide emissions. Costa Rica is counting on the LULUCF sector to achieve its carbon neutrality goal. To meet the emissions trajectory outlined in its LTS, the LULUCF sink would have to more than double compared to current levels. Thus, Costa Rica should work towards increasing its LULUCF sink in the long-term.

For more information about forestry activities in Costa Rica, please see the Forestry section under Policies & Action.

We evaluate the net zero target as “Acceptable”. Costa Rica’s target covers all sectors and gases and is underpinned by emissions pathway analysis and the communication of strategic goals and emissions targets per sector.

The Costa Rican government provides comprehensive pathways and key measures and sets interim goals attributable to discernible periods. The government plans to reach net zero through domestic actions and without the use of international credits. That said, the government currently fails to provide explicit and transparent assumptions on key elements. The government also provides no information on its intention to establish a formal periodic reviewing cycle of measures and interim targets.