Current Policy Projections
With currently implemented policies, Costa Rica’s emissions levels could increase by 132% above 1990 levels by 2020 and 146% above of 1990 levels by 2030, excluding land use, land use change and forestry (LULUCF). Total emissions excl. LULUCF increased sharply in the early 1990s, and have steadily increased, though at a lower rate since 2000, doubling between 1990 (6.5 MtCO2e) and 2012 (13.8 MtCO2e). The LULUCF sector is expected to become a larger sink in the future, but emissions from transport, industry, and waste are expected to grow over time under current policies.
Costa Rica has put in place several policies to reduce GHG emissions. Most of the planned abatement will come from the LULUCF and transport sectors. For the LULUCF sector, the government intends to make an extensive use of funds from the REDD+ and carbon trade (Ministerio de Ambiente Energia y Telecommunicaciones, 2009; Ministerio de Ambiente y Energía, 2014). Until now, many of the accounting details for programmes like REDD+ in a post-2020 scenario have been uncertain (OECD, 2014). For the transport sector, Costa Rica has implemented policies focused on fostering electrification, modal-shift, and energy efficiency.
Beyond LULUCF and transport, the main policies driving mitigation take place in the energy and agriculture sectors, with further substantial emissions reductions from the waste sector. Since the implementation of the National Climate Change Strategy (ENCC) in 2008, Costa Rica has been working to design mitigation actions in energy efficiency and conservation, renewable energy and agriculture (NAMA Database, 2011). Examples of the policies considered include a goal to have 100% electricity generated from renewable energy, better agricultural practices, waste management in cities and electric transportation (Ministerio de Ambiente y Energía, 2015b).
Costa Rica’s National Programme for Carbon Neutrality—first implemented in 2012—is a government initiative to reach carbon neutrality. Under this programme, the government has established a voluntary domestic carbon market, in which businesses and organisations can purchase emissions offsets in pursuit of carbon neutrality, but only after they have done everything possible to reduce their own emissions. The programme also establishes a “C-Neutral” (carbon neutral) certification for businesses and a national registry of carbon footprints for organisations (Ministerio de Ambiente y Energía, 2015a).
At the end of 2017, the government launched a second phase: Carbon Neutrality Programme 2.0 (PNCC 2.0) (Ministerio de Ambiente Y Energía and Presidente de la República, 2017). With this update, the programme has expanded the certification categories and aims to attract more businesses and encourage other actors such as municipalities to participate (Gobierno de Costa Rica, 2017).
As a means of facilitating the implementation of the 2030 goal, in 2017 Costa Rica created a Scientific Council on Climate Change (or 4C) (Ministerio de Ambiente y Energía - Gobierno de Costa Rica, 2017b) and Citizen Consulting Council on Climate Change (or 5C) (Ministerio de Ambiente y Energía - Gobierno de Costa Rica, 2017a).
Emissions from energy supply in Costa Rica contributed to around 5% of total emissions in 2012 incl. LULUCF (Ministerio de Ambiente y Energía, 2015a). Under current policy projections the energy sector is expected to grow in average by 2% annually until 2030 according to Costa Rica’s 1st Biennial Update Report (Ministerio de Ambiente y Energía, 2015a).
The VII National Energy Plan 2015-2030, approved on September 14, 2015, supported the continuation of renewable energy development, energy efficiency and low-carbon emissions transport. The aspirational goal is to achieve and sustain 100% of electricity generation coming from renewable energy by 2021 (Ministerio de Ambiente y Energía, 2015c). In 2014, 90% of electricity was already generated from renewable sources, mainly hydropower (IEA, 2016) and Costa Rica has already been generating 100% RE electricity at certain times of the year since 2015. In 2018, Costa Rica beat its own record by generating more than 98% of its electricity from renewable sources for 4th consecutive year (Canelo, 2018). Further advances towards the 100% goal are expected from the National Program for Carbon Neutrality that promotes hydro, geothermal, wind, solar and biomass as renewable energy sources.
In February 2019, Costa Rica reformed its Executive Decree No. 41578. With this reform, it extended the national moratorium on oil exploration and exploitation from September 2021 until the end of 2050 (Ministerio de Ambiente y Energía - Gobierno de Costa Rica, 2017a).
According to the NDC, most of the emissions reductions in the transport sector will come from the increased use of electric transportation, both private and public (i.e. inter-urban train) (Ministerio de Ambiente y Energía, 2015b).
In early 2018, Costa Rica implemented law 9518 on incentives and promotion of transport electrification (Asamblea Legislativa de la República de Costa Rica, 2018). This law addresses both public and private transportation (incl. government vehicles and freight). For private vehicles, it establishes financial and non-financial incentives to promote electric vehicles. The financial incentives include tax benefits—for value added, consumption, ownership, import and company taxes—of up to 5000 USD per vehicle (3 million CRC) (Artavia, 2017). The non-financial benefits include a labelling programme, exemption from traffic restrictions, preferential parking and promotion of charging stations for electric vehicles.
For public transportation, the law establishes the use of renewable energy for transportation as national priority in all modes of transportation including train, freight, buses, and taxis (Asamblea Legislativa de la República de Costa Rica, 2018). It establishes that the bus fleet should be replaced by electric buses every two years by at least 5%, and at least 10% of new taxis concessions are given to electric vehicles, between other measures (ibid). For its implementation, the law mandates the publication of a “National Plan for Electric Transportation”. The latter was published beginning of 2019. This national plan contains a set of strategic actions, its plan for implementation and the overall expected emissions reduction potential of fulfilling the objectives and mandated of law 9518. It covers actions for public, private and institutional transportation.
According to our analysis—based on national estimations of emissions reduction from law 9518 as reported in the National Plan for Electric Transportation (Gobierno de Costa Rica, MINAE and MOPT, 2019)—emissions will be significantly reduced in 2030 and very close—between 1 and 2.3 MtCO2e—to Costa Rica’s NDC targets excl. LULUCF. These emissions reductions are due to the implementation of transport policies as outlined in the National Plan for Electric Transportation. For 2030, the implementation of this policy translates to a reduction of about 3 MtCO2e equivalent to 19% of GHG reductions compared to a pathway without this policy.
Other developments in line with Law 9518 include an intersectoral agreement to reduce emissions in the transport sector (Gobierno de Costa Rica, 2019a), the announcement to build an electric cargo train (Córdoba, 2019), and an announcement on their plan to add 34 fast changing stations to their network by end of 2019 (AFP and The Tico Times, 2019). The intersectoral agreement was signed in February by the Transport Ministry (MOPT, in Spanish) and Energy & Environment Ministry (MINAE, in Spanish). Additionally, a law on bicycle mobility and security intended for the incentivisation of cycling was approved by the lower chamber in January 2019 (Alfaro, 2019).
Emissions form agriculture represented a 21% of total emissions in 2012 excl. LULUCF (Ministerio de Ambiente y Energía, 2015a). For the agriculture sector, the NDC includes measures to increase access to finance for the procurement of low-carbon technologies, particularly for small and medium size enterprises (Ministerio de Ambiente y Energía, 2015b). Costa Rica also has a National Low-Carbon Livestock Strategy, which aims at replicating pilot projects such as the one in the Livestock NAMA.
Historical emissions in the forestry sector show a decrease between 1990 and 2000—meaning that the sinks were increasingly higher than the emissions in this sector. Between 2000 and 2010 emissions flattened and in 2010 they started to increase. According to national inventory reports (Ministerio del Ambiente Energía y Telecomunicaciones and Instituto Meteorológico Nacional, 2009; Ministerio de Ambiente y Energía and Instituto Meteorológico Nacional, 2012, 2014), emissions have increased due to increased land use change between 2000 and 2012. Forests have been converted for agriculture and to grasslands. Sinks from forests—derived from biomass change and abandoned lands—have also increased between 2000 and 2012 but have since 2010 not outweighed the emissions—reversing the overall trend.
In the forestry sector, current efforts are mainly the Low Emissions Development Strategies and a REDD+ (Reduce Emissions from Deforestation and Forest Degradation) strategy at the national level.
National projections for the LULUCF sector from Costa Rica’s 1st Biennial Update Report show a decreasing emissions trend between 2010 and 2030 (Ministerio de Ambiente y Energía, 2015a). Net emissions are projected to be negative starting in 2017 in all three scenarios—conservative, optimistic and pessimistic—meaning that sinks (or removals) will be larger than emissions, and that these sinks are expected to grow overtime.
Costa Rica is counting on sinks in the LULUCF sector to achieve its carbon neutrality goal. It does this through the Costa Rican Compensation Units (UCC, in Spanish), which represent avoided, reduced, removed and stored emissions that have been monitored, reported and verified. These units are tradeable domestically on a voluntary basis (Salgado et al., 2013). The Carbon Neutrality 2.0 Program mentions these compensation units as a tool that could be used by organisations and municipalities to achieve carbon neutrality recognition (Ministerio de Ambiente Y Energía and Presidente de la República, 2017).
As included in NAMAs, the metrics to assess the potential for removals and emissions are under review and continuous improvement. Emissions excluding LULUCF could increase significantly from historical levels and require attention to further decarbonise the economy. We do not include the forestry sector in our rating—please see the CAT’s NDC ratings and LULUCF page for more details.
The waste sector contributed to 17% of total emissions in 2012, incl. LULUCF (Ministerio de Ambiente y Energía, 2015a). According to the same source, the waste sector is expected to grow between 18–38% between 2010 and 2030 under current policies.
The NDC plans to reduce GHG emissions by enhancing solid waste management in the Metropolitan area (Ministerio de Ambiente y Energía, 2015b).