Climate change policies are based on a broad set of strategies and plans that have set ambitious targets to combat deforestation and shift the course of economic and social development towards carbon neutrality. Initiatives have been largely developed by the Executive; policies and plans adopted at that level outnumber climate legislation adopted by the legislature. The elaboration of policies has been assisted by the Climate Change Consultative Committee (OCIC), which consists of representatives of the government sector, academia and NGOs, and helps to promote dialogue and co-ordinate activities between diverse interests involved in the climate change debate.

In 2013 a proposal for the Framework Law on Climate Change was prepared and presented to the National Assembly, passing its first reading in March 2014. The draft text is currently being held in the Parliament. The proposal includes the creation of a Climate Change National Committee and a Climate Change National Council, which would share responsibility for the implementation of the National Adaptation and Mitigation Plan. The draft text also calls for the adoption of a National Climate Change Plan and the further development of climate policies oriented towards research, crisis management, GHG reporting and monitoring, as well as mitigation and adaptation.

For now, climate change policy is based on the National Climate Change Strategy (2008), provided for by the 2006-2010 National Development Plan. The plan stressed the need to promote a national response to the issue considering the importance of balancing the climate system. For this purpose, the plan places the climate change agenda as a national and international priority, calling for the development of a Climate Change National Programme. The Programme is expected to enhance infrastructure and technology to prevent natural disasters related to climate change. Additionally, it was intended to consolidate a national approach to climate change and develop institutional mechanisms to address the issues facing different sectors. The National Development Plan (2011-2014, updated for 2015-2018 in November 2014) reaffirmed the ambitious goal to promote a carbon neutral economy by 2021 and laid out strategies to promote renewable energies, reduce GHG emissions, and consider adaptation initiatives.

Energy supply

Costa Rica has one of the cleanest energy mixes in the world, with renewables accounting for more than 90% of the national electricity supply. However, due to growing consumption of fossil fuels for transportation and longer dry seasons due to climate change – which have reduced hydropower production – GHG emissions from energy use have increased in recent years, as well as electricity prices. In order to meet the 2021 target of 100% share of renewables in electricity generation (including large hydro), the 2008-2021 National Energy Plan aims to diversify the energy matrix (with increasing share of geothermal – 13% of the energy mix in 2010, along with 77% hydropower and 3.1 % wind energy – GHG Inventory, 2014), with a sustainable transportation sector and further support of renewable energy, in particular from domestic resources. Additionally, the plan calls for the promotion of energy efficiency and reduced fossil fuel consumption. To support the development of renewables, a net-metering pilot project was launched in 2011 and the scheme was introduced at the sub-national level in 2013, allowing independent producers to bank excess power with their distributors. In addition, tax incentives are offered for investment in renewable energies.

Energy demand

Energy demand management policy is based on the Law on Rational Use of Energy (1994). Policy measures today include energy efficiency standards for electrical appliances and fuel efficiency standards, as well as an obligation for energy-intensive companies to execute energy efficiency programmes to reduce their energy use. A revision of the General Electricity Law is being discussed, with ‘national electricity sector roundtables’ initiated in October 2014. The proposed revision aims to increase the energy efficiency of the electricity sector (eg more efficient appliances), optimise the electricity grid (increase use of natural gas, geothermal, biomass and solar energy, as well as distribution and transportation efficiency), regulate electricity prices and access of private independent producers to the grid, and adapt the sector to the fast increase in electricity consumption, especially in the residential sector.

Transportation

According to the 2014 GHG Inventory, transport is the largest national source of GHG emissions. To try to tackle the situation, Costa Rica introduced its first fuel economy standards in 1996 (Vehicle Emissions Act) and biofuel mandates in 2008 (first National Biofuels Programme: 10% bioethanol and 20% biodiesel mandates). After being temporarily removed in 2011, an update of the mandates and biofuels policy strengthening have been considered since 2013, when the Biofuels Law was proposed. The Law should promote the sustainable development of the national biofuel industry and aim at contributing to enhanced energy security and efficiency, climate change mitigation, environmental protection, agricultural land revitalisation, employment creation and local development. The law would also create the National Biofuel Programme, placing the Ministry of Environment and Energy in charge of its co-ordination. Finally, the law should confirm the minimum volume of biofuels that must be included in fossil fuels, 8% for bioethanol and 5% for biodiesel.

Carbon Pricing

Following the 2008 National Climate Change Strategy, Costa Rica developed a national carbon market as part of its initiatives to reach carbon neutrality by 2021. Adopted in 2011, the National Norm of Carbon Neutrality defines the conditions in which businesses and organisations can receive a carbon neutral certification. The norm regulates measures to reduce carbon emissions, to be complemented by other programmes under the Clean Development Mechanism (CDM), and the Verified Carbon Standard (VCS).

These initiatives fit within the 2012 Carbon Neutral Country Programme, the official programme of the Climate Change Directorate (DCC) of the Ministry of Environment and Energy (MINAE) for processes regarding GHG inventories and the C-Neutrality Norm. Activities in this area were strengthened in 2013, with the Presidential approval of the MINAE Decree creating the national Voluntary Carbon Market.  The Costa Rican Voluntary Domestic Carbon Market (not currently open to foreign traders) allows for issuance and exchange of carbon credits called Costa Rican Compensation Units (UCC). Those can be traded by companies for the right to release carbon dioxide into the air to compensate for emissions they cannot reduce. The compensation units are bound to reforestation projects and other conservation efforts aiming to sequester CO2. 

REDD+ and LULUCF

Established in 1991, the National Forestry Finance Fund (FONAFIFO) aims to: a) finance the Payments for Environmental Services – PES- Programme; and b) develop activities to strengthen the development of the forestry sector. FONAFIFO formally became one of the core elements of Costa Rica’s forest policy with the regulation of its activities established in the 1996 Forest Code. The main instrument of FONAFIFO’s operations is the PES Programme, which executes policies established by MINAE. The PES has been in operation for more than 17 years and serves as an example for similar programmes in other countries.

As defined in the 1996 Forest Code, the main source of funding for the PES is a fuel tax, or “ecotax” that applies to the consumption of any crude-oil derivates. Another source of financing comes from the Environmental Service Certificates, a voluntary private sector scheme. Additionally, FONAFIFO obtains payments for the protection of water resources from agreements with hydropower companies and other companies using water, as well as funds from a number of international co-operation projects.

In 1998 the government created the National System of Conservation Areas (SINAC) to administer all biodiversity. SINAC functions as a technical organisation decentralised from Ministry of the Environment and is responsible for the core guidelines for policies on sustainable use of natural resources. Together, FONAFIFO and SINAC are the two major institutions responsible for forest policy.

In 2008 the country committed to developing a REDD+ (Reduced Emissions from Deforestation and Forest Degradation) policy and developed a first REDD+ Plan in 2010. Approved by the World Bank, the Plan received funds from the organisation to prepare a REDD+ Strategy. A Second Plan was presented in 2011. In 2013 the government included a REDD+ Project in its Carbon Fund aiming to set up an agreement for trading emission reductions. The plan is to develop a monitoring and reporting system on emissions and reductions of GHG in energy, waste, and land use.

Forest Law (Law No.7575) (1996)

The 1996 Forest Law establishes the protection, conservation and management of forest areas as a priority and central responsibility of the State. The government is in charge of regulating and supervising the use and exploitation of forest resources in a sustainable manner. In addition, the government should seek to improve living conditions for rural communities.…read more

Regulations on the Efficient Use of Energy (Law No. 7447) (1994)

This law consolidates the participation of the State in the promotion and gradual execution of the programme for the efficient use of energy. It also attempts to establish mechanisms to achieve energy efficiency, taking environmental protection into account. The Ministry for Natural Resources and Energy is responsible for the implementation, monitoring the “National Programme for…read more

Energy Law (Law No. 7200) (1990)

This law requires MINAE to establish company-level power indices based on their level of economic activity. The law and its subsequent regulations outline the obligatory nature of executing projects that conserve electricity. They also include an incentive programme for businesses that promote the efficient use of energy.…read more

7th National Energy Plan 2015-2030 (2015)

The 7th National Energy Plan 2015–2030, published by Costa Rica's Ministry of Environment and Energy, aims to reach the objective of "energy sustainability with low emission levels" and supports the continuation of renewable energy development, energy efficiency and low-carbon emission transport. Energy currently constitutes 80% of Costa Rica's GHG emissions. It complements the National Development Plan 2015 -2018,…read more

Ministerial Decree No. 37296-MINAE creating the Voluntary Carbon Market (2013)

The decree sets up guidelines for the generation, issuance and exchange of carbon credits, also known as Costa Rican Compensation Units (UCC). The UCCs are associated with projects developed within the country that address sustainable management of forests, energy efficiency, technological innovation directed at emission reduction, and other themes. To ensure management of the carbon…read more

Decree No. 36823-MINAET (2012)

Creates the Interministerial Committee for Climate Change and regulates its functioning.…read more

Executive Decree No. 37352-MINAET (2012)

The Decree establishes the Executive Support Agency for the Development and Implementation of the REDD Strategy of Costa Rica.…read more

Biofuel Regulation (Executive Decree 35091) (2009)

The biofuel regulation aims to foster the development of the biofuel industry in Costa Rica. For this purpose, the decree regulates the production, transportation, storage, and trade of biofuels. It designates the Ministry of Environment, Energy and Telecommunications (MINAET) and the Ministry of Agriculture and Livestock (MAG) as the institutions in charge of promoting, implementing…read more

National Climate Change Strategy (NCCS) (2008 / Mitigation and Adaptation Framework)

The primary objective of the NCCS is to covert the country into a “carbon neutral” economy by 2021. It introduces a target of 100% share of renewable sources in electricity generation by 2021. Other objectives are to reduce socio-economic and environmental impact of climate change, and promote sustainable development and environmental protection through actions of…read more

National Energy Plan 2008-2021 (2008)

The National Energy Plan 2008-2021 focuses on enabling the biofuels market, diversifying the energy mix by introducing renewable energy targets and reducing dependency on fossil fuel, promoting a more efficient transportation system based on clean energy, installing over 1,500 PV projects and developing a national education strategy to improve energy efficiency and consumption awareness among…read more

Emissions More information

Rank as emitter (including LULUCF):
Below Top 50
GHG Emissions 2007-2011 (MtCO2e)
CostaRica
Country-reported GHG emissions (incl. LULUCF) (MTCO2):8.61 (reporting year: 2005)
Country-reported GHG emissions (excl. LULUCF) (MTCO2):12.11 (reporting year: 2005)

Information More information

GHG inventory:2010 (Third National Communication 2014)
Climate risk assessment:National Communications to the UNFCCC (2000, 2009, 2014)

Targets

Economy wide targets - Up to (and including) 2020

None

Economy-wide targets - Beyond 2020

Carbon neutrality by 2021

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Targets - Energy demand

None

Targets - LULUCF

None

Targets - Renewables

Increase share of renewable sources in electricity generation to 100% by 2021

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Targets- Transport

None

Policies

GHG Mitigation framework More information

National Climate Change Strategy (2008)

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Adaptation framework More information

National Climate Change Strategy (2008)

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Policies - Carbon pricing

Voluntary Domestic Carbon Market

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Policies - Promotion of low-carbon energy (inc. renewables)

Equipment used for renewable energy exempt from import duties; Other tax exemptions for renewables and investment support to companies and residences for deploying solar panels and biomass generation systems

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Policies - Energy demand

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Policies - Transport

Incentives system for the use of hybrid electrical vehicles; Fuel efficiency standards; Regulated (guaranteed) prices of biofuel blends and National Research and Development Bioenergy Policy (enhance environmental sustainability of biofuel production and support research in new sources of biomass)

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Policies - LULUCF

Payment for Environmental Services (PES); Forest Conservation Certificates; Forest Fund (supports reforestation and 1/3 of funds to be dedicated to PES); Executive Support Agency for the Development and Implementation of the REDD Strategy (2012)

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As established by the 1949 National Constitution, legislative power in Costa Rica is unicameral. The National Assembly is constituted of 57 Members of the Parliament – MPs directly elected for a single four-year term without the possibility of direct re-election. The last elections were held in February 2014 and the next election is scheduled for 2018). The proposal of a piece of law can be initiated by the Executive, the Legislature and directly by citizens. Popular initiative requires the endorsement of a minimum of 5% of the electorate and should not address fiscal issues, taxation, loans and other administrative acts.

The law-making process entails two readings at the National Assembly, before the approved proposal is submitted for the final appraisal of the Executive.

Once passed by the National Assembly, proposed laws are revised by the Executive and require the sanction of the President of the Republic. The President has 10 days to request modifications to the text or veto the proposal. If the Assembly discusses and adopts all requirements of the Executive, the amended law is then in general sanctioned by the President. Once approved by the Assembly and sanctioned by the President, a law enters into force at the indicated date or 10 days after its publication in the Official Gazette.

Costa Rica (2014). Inventario nacional de gases de efecto invernadero y absorción de carbono 2010. Ministerio de Ambiente y Energía, Instituto Meteorológico Nacional. Available at: http://cglobal.imn.ac.cr/sites/default/files/documentos/inventariogasesinvernadero2010-web_0.pdf (accessed 10 December 2014)

Costa Rican Official Gazette (2013). Biofuels Law, Issue 132, 10 July 2013.

Costa Rican Official Gazette (1990). Energy Law. N.197, 18 October.

Costa Rican National Assembly (1994). Regulations on the Rational Use of Energy. Law N. 7447. 13 December.

Costa Rican National Assembly (1996). Forest Law. Plenary 7575, 5 February.

Fernández Sanabria, A. (2014). ‘Costa Rica debate cómo bajar precio de la electricidad ante creciente dependencia’. El Financiero. Retrieved from: http://www.elfinancierocr.com/economia-y-politica/electricidad-precio-tarifa-dependencia-mesas_de_dialogo-minae_0_616138405.html on 15/11/2014

Government of Costa Rica (2010).  2011-2014 National Development Plan. Ministry of Planning and Economic Policy. December 2010.

Government of Costa Rica (2013). Voluntary Carbon Market. Executive Decree DAJ-62-2012-MINAE, 10 September 2013.

Government of Costa Rica (2015). VII Plan Nacional de Energía 2015-2030. Available at: http://www.energia.go.cr

Ministry Of The Environment and Energy (2013). Costa Rica Market Readiness Proposal (MRP) Partnership for Market Readiness Final Report. Available at: http://www.thepmr.org/system/files/documents/Costa%20Rica_MRP_Final_19-02-2013_0.pdf (accessed on 15 June 2013).

Ministry of the Environment and Energy (2012). Costa Rican Domestic Voluntary Carbon Market (MDVCR). Executive Decree DAJ-62. 10 September.

Ministry of National Planning and Economic Policy (2010). National Development Plan 2011-2014.  Available at:http://documentos.mideplan.go.cr/alfresco/d/d/workspace/SpacesStore/122fcd1c-53a7-47a7-a0ad-84cac6f1d7b9/PND-2011-2014-Maria-Teresa-Obregon-Zamora.pdf (accessed on 18 June 2013).

Murillo, A. (27 Jul 2014). La crisis energética de Costa Rica comienza a golpear a las familias.  El País. Retrieved from: http://internacional.elpais.com/internacional/2014/07/26/actualidad/1406399320_459467.html on 16/11/2014 on 15/11/2014

Ortiz, D.A. (21 May 2014). ‘Climate Change Legislation Faltering in Costa Rica’. Inter Press Service News Agency. Retrieved from: http://www.ipsnews.net/2014/05/climate-change-legislation-faltering-costa-rica/ on 16/11/2014.

President of the Republic, Ministry for Agriculture and Livestock and Ministry of the Environment, Energy and Telecommunication (2009). Biofuels Regulation. Executive Decree 35091. 9 January.

SERN (2012). Costa Rica. REEP Policy Database. Retrieved from: http://www.reegle.info/policy-and-regulatory-overviews/CR on 14/11/2014.

Last modified 7 December, 2015