Costa Rica

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’s climate policies and action do not require other countries to make comparably deeper reductions.

Costa Rica is almost on track to achieving its 2030 NDC emissions reduction target under current policy scenarios. The current policy projections include new policies that support the electrification of its transport sector, the country’s largest source of greenhouse gas (GHG) emissions. The National Plan for Electric Transportation, published in early 2019, contains a set of strategic actions and a plan for their implementation, including multiple fiscal, financial, and regulatory policy instruments to support acquisition and use of electricity vehicles. In 2022, the implementation of this policy led to the development of charging infrastructure for EVs, as well as the uptake of EV purchases (Direccion de Cambio Climatico, 2021c; Government of Costa Rica, 2022).

Costa Rica has launched multiple initiatives to facilitate the implementation of its NDC. Its climate-related policies and programmes include the second phase of its National Programme for Carbon Neutrality (a carbon neutral certification scheme for businesses and municipalities), Nationally Appropriate Mitigation Actions in the agricultural sector, and the National Energy Plan.

In 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 (Government of Costa Rica, 2019f). In September 2021, Costa Rica took it a step forward by proposing that the moratorium be enshrined in law to protect it from reversal by future administrations (Direccion de Cambio Climatico, 2021b)

Costa Rica’s electricity generation runs on a very high share of renewable sources and aimed to reach a full-year 100% renewable electricity generation share by 2021, effectively reaching 99.98% in that year (EFE, 2021). In 2022, Costa Rica reached a full-year >98% share of renewable electricity generation for the eighth year in a row (Camarillo, 2022).

Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here.

With currently implemented policies, Costa Rica’s emission levels could increase between 11% and 18% above 2010 levels by 2025 and between 2% below and 18% above 2010 levels by 2030, excluding land use, land use change and forestry (LULUCF). In 2021, Costa Rica’s emissions returned to 2019 levels as economic activity recovered from the blow of the COVID-19 pandemic.

Total emissions excluding LULUCF in Costa Rica have steadily increased in the period 1990-2013 at an annual rate of approximately 2-3% and have since fluctuated, but with an increasing trend, reaching 16.1 MtCO₂e in 2021. The lower range of Costa Rica’s current policy emissions pathway leads to 13.4 MtCO₂e in 2030 and would put Costa Rica close to reaching its NDC target. Current policies would need to be 6% lower to reach the upper range of Costa Rica’s NDC target.

Costa Rica’s emissions between 2015 and 2021 have been close to the upper end of the government’s expectations for the period. This means that the implementation of climate policies has been successful but has remained insufficient to meet the 1.5°C-compatible trajectory presented in the country’s National Decarbonisation Plan. Costa Rica needs to improve the implementation of mitigation policies in key emission sectors such as transport, agriculture and waste.

Costa Rica has several policies to reduce GHG emissions. Most of the planned emissions reductions are expected to come from the LULUCF and transport sectors. Agriculture is also an important pillar of Costa Rica’s mitigation plans. Currently, Costa Rica’s most important climate policy is its National Decarbonisation Plan, which sets out decarbonisation policies and actions across all relevant sectors of the economy. Costa Rica regularly publishes updates on its National Decarbonisation Plan, and the latest update report shows that almost all of the original planned actions are on track, despite the negative effects of the pandemic (Direccion de Cambio Climatico, 2021c).

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 (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 (Government of Costa Rica, 2017). In 2021, the programme was further expanded to allow certifications for products, events and educative centres (Direccion de Cambio Climatico, 2021a).

In Glasgow, a number of sectoral initiatives were launched to accelerate climate action. At most, these initiatives may close the 2030 emissions gap by around 9% - or 2.2 GtCO₂e, though assessing what is new and what is already covered by existing NDC targets is challenging.

For methane, signatories agreed to cut emissions in all sectors by 30% globally over the next decade. The coal exit initiative seeks to transition away from unabated coal power by the 2030s or 2040s and to cease building new coal plants. Signatories of the 100% EVs declaration agreed that 100% of new car and van sales in 2040 should be electric vehicles, 2035 for leading markets. On forests, leaders agreed “to halt and reverse forest loss and land degradation by 2030”. The Beyond Oil & Gas Alliance (BOGA) seeks to facilitate a managed phase out of oil and gas production.

NDCs should be updated to include these sectoral initiatives, if they're not already covered by existing NDC targets. As with all targets, implementation of the necessary policies and measures is critical to ensuring that these sectoral objectives are actually achieved.

• Methane pledge: Costa Rica signed the methane pledge at COP26. This is significant as methane made up 32% of Costa Rica’s emissions in 2021, mostly from agriculture and waste. Costa Rica has measures in place to reduce its emissions from these sources but has not yet adopted any additional measures since Glasgow. If emissions reductions from the methane pledge were additional to Costa Rica’s current policies, it would put Costa Rica significantly closer to reaching its NDC target.

• Coal exit: Costa Rica has not adopted the coal exit, as it neither produces coal nor uses it for power generation. In 2022, it produced >98% of its power through renewables, mostly hydro, geothermal and wind.

• 100% EVs: Costa Rica has no plans to phase out the sale of ICE vehicles and did not sign the agreement. However, the government has policies in place to incentivise the uptake of electric vehicles, which has led to a five-fold increase in the electric vehicle fleet since 2018 (Government of Costa Rica, 2022).

• Forestry: Costa Rica signed the Leaders' declaration on forest and land use at COP26. Costa Rica drastically reduced its land use emissions since 1990, becoming a net sink in 2014 and representing over 20% of the country’s emissions in 2017.

• Beyond oil and gas: Costa Rica is one of the founding members of the beyond oil and gas alliance. However, in COP27, the government decided to de-prioritise this initiative in its climate agenda (Rodriguez, 2022). So far, this has not impacted Costa Rica’s moratorium on oil and gas production.

The VII National Energy Plan 2015-2030, approved on September 14, 2015, supports the continuation of renewable energy development. 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% renewable electricity at certain times of the year and over 98% throughout the whole year since 2015. This makes Costa Rica the country with the highest share of renewables in Latin America, see chart below. In 2021, it managed a full-year renewable generation rate of 99.98% (EFE, 2021). In 2022, Costa Rica reached a full-year >98% share of renewable electricity generation for the eighth year in a row (Camarillo, 2022).

In 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 (Government of Costa Rica, 2019a). In September 2021, Costa Rica took a step forward by proposing that the moratorium be enshrined in law to protect it from reversal by future administrations (Direccion de Cambio Climatico, 2021b).

During 2022, Costa Rica continued to develop its renewable energy generation and storage capacity (Singh, 2022b, 2022d), as well as liberalising its energy market to remove access barriers for small producers (Singh, 2022a).

Costa Rica is also in the process of developing its National Hydrogen Strategy (Singh, 2022c). With a potential production capacity of up to six million tonnes per year, green hydrogen could be used to satisfy industry, agriculture and energy needs in Costa Rica, as well as become an important export for the country (Energia Estrategica, 2022).

For the transport sector, Costa Rica has implemented policies to foster electrification, modal shift, and energy efficiency. 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, 2019). With a robust set of policy instruments, Costa Rica aims to reduce emissions from the transport sector by 27% by 2030 and 65% by 2050 under currently implemented mitigation measures (Ministerio de Ambiente y Energía, 2019).

In 2018, Costa Rica implemented Law 9518 on incentives and promotion of transport electrification, which is expected to increase significantly under current policy projections (see chart below) (Asamblea Legislativa de la República de Costa Rica, 2018). This law addresses both public and private transportation (incl. government vehicles and freight). For public transport, it sets out a plan to expand the country’s electric bus and rail fleet, as well as developing priority lanes and other supporting infrastructure. In 2021, Costa Rica started a USD 1.9bn project to build 85km of electric light rail in the San Jose Greater Metropolitan Area, as part of its plan to decarbonise its transport sector and incentivise modal shift (Green Climate Fund, 2021a).

For private transport, 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 5,000 USD per vehicle (3 million CRC) (Molina Mesen, 2022). These policies have led to a significant uptake of private electric vehicles in Costa Rica since 2018, with electric cars going from 398 in 2018, to 3735 in 2022, and electric motorbikes going from 365 in 2018 to 1069 in 2022 (Government of Costa Rica, 2022).

The law also includes non-financial benefits such as a labelling programme, exemption from traffic restrictions, preferential parking, as well as the promotion of charging stations for electric vehicles. However, according to the latest government update report, the labelling scheme was not implemented in 2021. Other planned measures such as a biofuel mandate of 10-12% have also been put on hold (Direccion de Cambio Climatico, 2021c).

Costa Rica has advanced the deployment of key infrastructure to support its growing EV vehicle fleet, including the installation of 43 fast charging stations and 30 regular charging stations for EVs. Further developments include the advancement of public zero emission vehicle fleets, which have reached 37 public institutions in 2021 (Direccion de Cambio Climatico, 2021c).

Based on national estimates of emissions reductions from Law 9518, as reported in the National Plan for Electric Transportation (Government of Costa Rica, 2019e), emissions will be reduced by 3.0 MtCO₂e in 2030, which translates to 3 MtCO₂e of GHG emissions reductions. Other developments in line with Law 9518 include an intersectoral agreement to reduce emissions in the transport sector (Government of Costa Rica, 2019b), which was signed in February by the Transport Ministry (MOPT, in Spanish) and Energy & Environment Ministry (MINAE, in Spanish).

As part of its National Decarbonisation Plan, Costa Rica is working to develop a new low-emissions building code with the support of the Green Building Council. Additionally, Costa Rica has supported the development of several low-emission building projects reaching 127 certified buildings in 2022, including LEED and EDGE certifications as well as regional voluntary certification schemes (Direccion de Cambio Climatico, 2021c).

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. As of 2022, over 1600 farms have implemented the livestock NAMA (Direccion de Cambio Climatico, 2021c).

In 2015, the government released its strategy for low-emissions agriculture, which aims to reduce the inefficient pasture area as well as reduce total GHG emissions of animals by 2% per year. Since then, Costa Rica has implemented further actions to implement this strategy, such as the Regional Plans for Climate Action and Risk Management and the Intersectoral agreement for the reduction of emissions in the agriculture sector (Ministerio de Ambiente y Energía, 2019).

The government is also working on a follow-up to the 2015 low-emissions agriculture strategy by developing a low carbon emissions livestock strategy focusing both on dairy and meat production (Direccion de Cambio Climatico, 2021c).

In 2021, Costa Rica submitted an updated National GHG Emissions Inventory to the UNFCCC, for the first time presenting an historical emissions series going back to 1990 and including a recalculation of all historical emissions values using updated tools and methods, including new emissions factors for economic activities and improved quality controls. This has led to a substantial upwards revision of Costa Rica’s historical LULUCF emissions, especially for the period 1990-2010.

Historical emissions in the forestry sector show a stark decrease between 1990 and 2017—meaning that sinks increased more than emissions in the sector. According to the latest national inventory report (Government of Costa Rica, 2021), the land use and forestry sector became a net emissions sink in Costa Rica in 2014. These sinks increased until 2017, when they represented ~20% of the country’s emissions.

The LULUCF sector is expected to become a larger sink in the future as Costa Rica is counting on the sector to achieve its carbon neutrality goal. For this purpose, the government established the National Programme for Carbon Neutrality in 2012. It does this through a carbon trading mechanism, the Costa Rican Compensation Units (UCC, in Spanish), which represents avoided, reduced, removed, and stored emissions that have been monitored, reported, as well as verified. These units are tradeable domestically on a voluntary basis (Salgado et al., 2013).

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 (Government of Costa Rica, 2017). In 2021, the programme was further expanded to allow certifications for products, events and educative centres (Direccion de Cambio Climatico, 2021a).

Costa Rica’s also provides payments for ecological services to landholders to promote the conservation of forests since 2014 under the REDD+ program (Government of Costa Rica, 2019d; Green Climate Fund, 2021b).

We do not include the forestry sector in our rating—please see the CAT’s NDC ratings and LULUCF page for more details.

As part of its National Decarbonisation Plan, Costa Rica is developing sectoral strategies to identify and reduce emissions from waste. This will complement the already implemented National Composting Plan, which aims to reduce the amount of organic waste going to landfills, and to increase Costa Rica’s recycling capacity (Direccion de Cambio Climatico, 2021c). At the municipal level, Costa Rica is also developing a NAMA to improve the collection and treatment of organic waste across the country, including the installation of biodigesters which capture residual gases from the decomposition of organic matter to use as fuel for heating or electricity generation (Direccion de Cambio Climatico, 2021c).