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GHG Emission Reduction Targets

Challenges to investment 

On 12 December 2015, 196 parties at the UN Climate Change Conference (COP21) adopted the Paris Agreement, aiming to limit global warming to between 1.5°C and 2.0°C above pre-industrial levels and to reach net zero greenhouse gas (GHG) emissions by 2050. To achieve this goal, GHG emissions would need to peak before 2025 and decrease by 45-50% by 2030. To better frame efforts towards this long-term goal, the Paris Agreement invited countries to formulate and communicate long-term low greenhouse gas emission development strategies (LT-LEDS) to transition to net zero emissions by mid-century. As one of the signatories to the Paris Agreement at COP21, Costa Rica committed to limit its greenhouse gas emissions but needed to create a strong national strategy to meet its Nationally Determined Contribution (NDC).  

 

Approach 

In 2019, the Government of Costa Rica formulated its LT-LEDS within the National Decarbonization Plan (NDP), which encompassed every sector of the economy and promoted GHG emission reduction. The NDP was structured along ten decarbonization axes and described necessary actions in three phases: foundations (2018-2022; vision and urgent actions), inflection (2023-2030; implementing pathways by sector), and massive deployment (2031-2050; constant investment). Specifically, the NDP mandated that the national electric system consolidate its capacity, flexibility, intelligence, and resilience to supply and manage renewable energy (RE) at a competitive cost. During the foundation phase, this mandate meant maintaining an electricity generation mix with over 95% RE and facilitating the decarbonization of other sectors such as transport and agriculture to reduce GHG emissions. It is worth noting that RE generation in Costa Rica had already exceeded 98% of power mix starting by 2019. However, Costa Rica still recognized there was room for improvement, for example aiming to install 274,240 smart meters to more effectively integrate RE generation into the grid by 2022.  

 

Key Enabling Conditions 

Costa Rica clearly committed to becoming a net-zero emission economy and submitted its LT-LEDS as the 14th country to the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat under the binding Paris Agreement. Although the provision of LT-LEDS was not mandatory, it proved crucial for RE investment funding, planning and decision-making. Notably, the LT-LEDS plan has been in place since its inception, demonstrating ongoing and consistent political support within Costa Rica.  


Impact / Outcomes 

After formulating the NDP, the share of renewable energy in Costa Rica's total power generation increased to 100% in 2022, driven by hydro, geothermal, wind, and solar power. By December 2020, Grupo ICE, the state electricity and telecom provider, had already deployed 475,979 smart meters, surpassing the original target set two years earlier. Smart meter deployment was funded by the Inter-American Development Bank, which, together with IMF funding, invested nearly $1 billion in Costa Rica's overall decarbonization efforts. By February 2022, Costa Rica had already achieved 61% of the first-stage goals of the NDP, with the government projecting that this figure would reach 83% by the end of 2022. These efforts helped Costa Rica remain below the 2.0°C emissions pathway that it committed to under the Paris Agreement. 


Additional Sources

Locations
Latin America, Costa Rica
Year published
01 January 2019
Policy type
Climate policy
Policy lever
Long term goals to promote clean energy investment
Risk category
Social acceptance, Political risk, Policy and regulatory risk

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