What have we found?

16M - 10M = 6M

Costa Rica’s emissions are projected to grow to 16M tons of CO2 equivalent per year by 2021.

This growth in emissions is based on national projected increases in population and in gross national product. Over the past 50 years, Costa Rica has followed a developmental model which involves correlated increases in total energy use and economic indicators. Some projections for carbon emissions growth are higher.

With completion of plans, Costa Rica can reduce 10M tons per year.

Achieving these reductions would be an amazing accomplishment as they would represent over 80% in GHG emission reductions from 2005 levels. The completion of current (major) plans in the energy sector and reductions from agriculture and forestry will result in a total mitigation of up to ten million metric tons of CO2 equivalent per year by 2021. This assumes that the energy-related projects are all completed in a timely fashion and achieve emission reduction estimates.

The 6M ton gap in emission reductions can be surmounted.

If there is one country in the world that can achieve carbon-neutrality, it is Costa Rica. We are privileged to live in a land that is flush with natural resources. Our borders contain plentiful energy sources from rivers, winds, the earth's heat and solar rays. Our electricity production matrix is over 90% renewable - one of the cleanest in the world. More importantly, we have an enviable track record of being environmental leaders. In the mid-1980s, Costa Rica had one of the highest deforestation rates in the world. We were down to 20% of our land being forests. With two decades of hard work in the area, we now enjoy some of the highest reforestation rates in the world and over 50% of our land is now covered in protected forests. Preserving our natural environment and working hard for what we believe in are key national values.

However, getting all 16 million projected tons of emissions eliminated or compensated won't be easy. The task at hand requires strong leadership, innovative thinking, rigorous accountability, unbending political will and country-wide behavioral change. The six million tons that still need to be addressed to achieve carbon neutrality represents the biggest opportunity for today's leaders of business and society to create lasting change.

Electric Train: 1 Million Metric Tons of CO2 Equivalent Reduction

An electric light rail or tram system operating within the GAM is a central component of Costa Rica’s drive towards carbon neutrality.  Nearly half of all carbon emissions in Costa Rica come from the energy sector, with most of those emissions caused by the movement of people within the GAM (38.5% of total combustibles burned in Costa Rica result from personal transport within the GAM).  While current transportation within the GAM is reliant on fossil fuel consumption, electric trains are virtually emission free, and since they rely on Costa Rica’s electricity production, which has the capability to be 100% renewable, such trains can offset any petroleum based transport they replace.
    
ENGEVIX, a respected energy consulting firm hired by the Consejo Nacional de Concesiones (CNC) to analyze the forthcoming TREM project, projects that the TREM will immediately serve a ridership of over 1.5 million per day, with that demand growing to nearly 2.5 million by 2021.  These millions of riders, using only the initial three lines, represent cars taken off the road and decreases in accidents and congestion.  These factors will contribute to at least a 250,000 metric ton reduction in Costa Rica’s CO2 equivalent emissions, according to CNC estimates.  The TREM project is estimated to cost $350 million, though it is expected to save $28 million annually due to reductions in congestion, adverse health effects, and environmental costs.

The real opportunity for CO2 equivalent reduction in public transport, however, will come as the train system is expanded to serve all the major population centers of the GAM.  The CNC estimates that 60km of electric train routes could be in operation by 2021, which can reduce CO2 equivalent emissions from transport in the GAM by up to 50%, or 1 million metric tons.  Such gains will not be achievable without aggressive support for expansion of the train lines throughout the GAM.  Furthermore, this reduction in carbon emissions can be dramatically increased by a synergistic GAM transportation plan, involving low-emission buses utilizing efficient routes, urban planning, and a significant decrease in non-electric automobile usage.

Sources:
Figures taken from the CNC; ENGEVIX, Estudio de Factibilidad Téchnico, Legal, Financiero y Ambiental para Financiamiento y Gerenciamiento para la Concesión del Proyecto Tren Eléctronico Metropolitano Costia Rica, Tomo 3; MINAET, Plan de Medidas Mandatorias para Reducir el Consumo de Combustibles (draft).

Buses: 0.5 Million Metric Tons of CO2 Equivalent Reduction

Currently, the bus transit system in the GAM is the major form of transport, with half of all persons moving in the GAM traveling by bus each day.  Bus routes follow no coherent and comprehensive plan and, as a result, are incredibly inefficient.  Furthermore, many buses are outdated and all burn fossil fuels.  Strong vested interests in the bus transportation industry have forestalled improvements in the system.

Although we were not able to obtain studies describing the effects of implementating an efficiently-routed Bus Rapid Transit (BRT) system within the GAM, the experience of similar metropolitan areas proves illustrative.  The Transmilenio BRT system in Bogota, Columbia, for example, services roughly 1.4 million people per day and is responsible for the reduction of nearly 900,000 metric tons of CO2 equivalent per year.  Modeling from the success of the Transmilenio and other BRT projects throughout the world, implementation of a well-planned BRT system in the GAM can reduce CO2 equivalent emissions by 500,000 metric tons per year.

Furthermore, the large levels of CO2 equivalent savings are wrought from BRT systems that utilize diesel powered busses.  If Costa Rica were to replace the inefficient diesel fleet with biofuels-burning buses or hybrid ones, the emission reductions can be significantly greater than projected.  Just as with the electric train system, the real gains from a well-functioning BRT system will be realized only in conjunction with synergistic GAM transport plan, including the train, urban planning, and car use reduction.

Costa Rica has been working on a less ambitious plan called "interlineas" for the GAM.  However, this plan has been stalled for the past year and it is unlikely that it will come into implementation in the coming years due to recent experiences.

Sources:
ENGEVIX, Estudio de Factibilidad Téchnico, Legal, Financiero y Ambiental para Financiamiento y Gerenciamiento para la Concesión del Proyecto Tren Eléctronico Metropolitano Costia Rica; CAF, Report: CAF en la Promocion del Mercado de Creditos de Carbono y el Sector Energetico, Foro Internacional de Inversiones y Financiamiento de Carbono para la Region Latinoamericana (Lima, Peru 2008); and http://www.bottineaupartnership.org/improving/Bogota.php

Biofuels: At least 0.6 Metric Tons CO2 Equivalent Reduction

Costa Rica is projected to use nearly 2 billion liters of petroleum fuels per year by 2021. Such heavy petroleum use makes transportation responsible for a large percent of Costa Rica’s greenhouse gas emissions. Native biofuels production can replace roughly 15% of all petroleum if Costa Rica maintains business as usual through 2021. Greater biofuels production in Costa Rica may be possible, but would require large scale plantation farming of fuel crops that could cause more GHG emissions than it would avert because of lost forests or other carbon sinks. Using other strategies such as public transportation and electric vehicles to lower transportation’s fossil fuel demand can help increase the importance of biofuels in decreasing Costa Rica’s carbon emissions.

Sources:
The United Nations Energy Statistics Database (http://data.un.org); and Programa Nacional de Biocombustibles, República de Costa Rica, 2008.  Conversations with experts in the Costa Rican biofuels industry.  RECOPE powerpoint presentation by William Ulate Padgett.

Electric Cars: 0.1 Million Metric Tons CO2 Equivalent Reduction

Costa Ricans have greatly increased their car ownership over the past ten years.  To provide a sense of scale, ten years ago, there was 1 car for every 10 ticos; today, there is 1 car for every 4 ticos.  As a consequence, private vehicles now represent one of the largest sources of greenhouse gas emissions for the country. If Costa Rica continues with business as usual, 1.1 million cars will be on the roads and polluting in 2021. Because there are so many individual sources of pollution, curbing GHG emissions from cars poses a great challenge.

One way to reduce the carbon footprint of vehicles is by substituting a portion of the current gasoline/diesel fuel mix with lower-carbon fuels such as biofuels.  However, reductions can also be acheived by increasing the energy efficiency of the vehicle fleet.  Further reductions can be achieved through better traffic engineering. Most of a vehicle’s emissions and fuel consumption occur when accelerating from a stop. Redesigning key intersections all over Costa Rica, and particularly the GAM, to minimize stops can result in significant GHG reductions. 

As discussed, a reduction in CO2 from personal car usage can result from the substitution of inefficient diesel or gasoline burning vehicles towards a more efficient fleet of vehicles.  One approach that is being discussed in Costa Rica is the penetration of battery electric and hybrid vehicles into the national car fleet.  Our analysis focused on the effects of electric vehicles, as they displace the most CO2 emissions. Due to current prices of these vehicles, we have assumed a conservative electric vehicle penetration rates over the next 12 years.  Costa Rica can expect electric vehicles to make up less than 2% percent of all cars on the road in 2021 (approximately 19,000 vehicles compared to today's 30 vehicles). 

Using 5.5 tons of CO2 emissions per vehicle per year, approximately 100,000 metric tons of CO2 equivalent reduced.  To increase adoption rate, government incentives and policies can make electric vehicles more affordable and desirable to increase ownership. For example, exempting cars from import and sales taxes will lower the price and thus make ownership accessible to more Costa Ricans. The government can also offer non-financial incentives such as exemption from vehicular restrictions to make owning an electric car even more desirable. 

Cargo Transport: 0.4 Million Metric Tons CO2 Equivalent Reduction

A large portion of Costa Rica’s CO2 equivalent emissions in the transport sector come from the transportation of cargo to and from the ports and airport.  This cargo, largely agricultural, is transported on mostly diesel-fueled (occasionally gasoline) tractor trailers.  Proposed electric train lines, extending from San Jose to port cities on the Pacific and Atlantic Oceans can obviate the burning of some of these fossil fuels, but the reality is that much of Costa Rica’s imports and exports require truck transportation.  Exports, largely agricultural, must be taken from expansive plantations to ports quickly and it is not always efficient for imports to pass through San Jose.  

Furthermore, high-tech exports, such as microprocessors from Intel, are flown out by airplane and are too valuable for truck or train transport.  Considering these factors, electric cargo trains will only substitute approximately 20% of all cargo transport in Costa Rica by 2021, resulting in a reduction in CO2 equivalent emissions by 400,000 Metric Tons.  Further reductions in the cargo sector can be realized by expanding the biofuels plan and replacing diesel with biodiesel, either wholly or in part.

This project of re-establishing the electric train lines in the Pacific and Atlantic coasts have been discussed in the recent past, but a definite project has not been formally established.  However, because the conversation of using trains to transport goods in Costa Rica has increased recently (some people are even starting to talk again about the "dry canal" idea), we decided to calculate the emission reduction potential.

Sources:

Conversation with Rudy Amador, Dole.  National inventory of fuel use from RECOPE.  

Urban Planning: 0.4 Million Metric Tons CO2 Equivalent Reduction

While the vision of what a carbon neutral city should look like has not yet been determined, visions as to how cities can cut down emissions while simultaneously improving quality of life are implementable today.  Major contributors to global warming related to urban planning are urban sprawl, uncontrolled land-use change, and automobile dominated transportation.  

By 2021, the GAM will have grown in population by 500,000 people, with the lion’s share of these new arrivals living on the outskirts of the city centers.  Thus, urban sprawl will occur naturally, unless forward-thinking urban plans are implemented that encourage new arrivals to settle near public transportation hubs, near their place of work, and generally within the city enters.  By increasing urban density, urban planning can decrease the amount of CO2 released from land use change as well as from increased transport-related fossil fuel use.  

A study called Foresta Urbana has calculated that 100,000 trees could be added to GAM in order to increase greenspace and absorb greenhouse gas emissions.  This study also points to the many social and economic benefits of increasing greenspace in urban centers, including safer streets and more consumer foot traffic. 

Such a holistic urban plan, when combined with efficient and desirable public transport, can reduce annual CO2 equivalent emissions by 400,000 tons per year.  This number was estimated from three key factors: (1.) assuming that the 500,000 new urban dwellers in 2021 live in the city center as opposed to sprawling suburbs, therefore reducing commuter miles; (2.) assuming that 100,000 trees are planted in the city to improve quality of life and absorb carbon emissions; and (3.) quantifying the prevented land use change that would result from less sprawl.  We multiplied the sum of these parts by two, as we know that there are substantial network effects that can occur from strong urban planning. 

Sources: Foresta Urbana, Institute for Tropical Architecture.

Electricity Sector: 1.2 Million Metric Tons of CO2 Equivalent Reduction

Currently, approximately 92% Costa Rica’s electricity is generated with renewable sources, setting a low CO2 footprint baseline.  However, electricity demand is projected to double to approximately 3000 MW by 2021, placing increased pressure on Costa Rica’s ability to generate electricity cleanly.  Despite the sharply increased demand, Costa Rica has the ability to satisfy the increased electricity demand with 100% renewable energy.  Costa Rica has the potential for an additional 8,500MW of wind, geothermal, and hydroelectric capacity.   

The graph below illustrates ICE’s National Energy Plan for capacity expansion by fuel source, indicating that current expansion plans will provide enough renewable electricity capacity to satisfy this projected demand.

Costa Rica has the potential to go 100% renewable by complementing hydro with wind energy during the dry season, eliminating the need for the use of thermal generated electricity (8% of total).  This would amount to 600,000 metric tons of CO2 equivalent reduction.  Costa Rica’s electricity system can also be designed to meet peak demand and export up to 600MW of excess electricity to neighboring countries, and receive credit for an additional 600,000 metric tons of CO2 equivalent savings.  Therefore total estimated savings in the electricity sector are: 1.2 million metric tons of CO2 equivalent.

Sources:
http://www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=NI&Submit=Submit
ICE National Energy Plan
MINAET, Direccion Sectorial de Energia

Industry:  0.04 Million Metric Tons CO2 Equivalent Reduction

In this section, we analyzed the energy use of the industrial sector in Costa Rica.  Based on conversations with experts in the field of reducing energy use in industries, the lion’s share of emissions in industrial activity stems from the use of petroleum products in heating processes of the food and beverage industry and in the use of electricity by the industrial sector broadly.  

Substituting 10% of the fuel used in the food/beverage sector for heating and other processes and implementing energy efficiency programs at diverse industrial plants can result in modest reductions from this sector.  As industrial energy usage is concentrated during the peak hours of the day, when fossil fuels are most likely to be used to generate electricity, energy efficiency programs have the potential to create demand side reductions equal to a reduction in 40,000 metric tons of CO2 equivalent annually by 2021.  Such a reduction can be realized through an aggressive efficiency campaign.

Sources:
Balance Nacional de Energía de la Dirección Sectorial de Energía 2008. 11% savings in the industrial sector from conversations with Gloria Villa at the DSE.  Encuesta Demanda Electrica 2007 (ICE). Conversations with CICR.

Residential Efficiency: 0.06 Million Metric Tons CO2 Equivalent Reduction

Although there are important opportunities to increase energy efficiency of individual homes, there are little CO2 equivalent reductions to be found in this section, as 90% of Costa Rica’s electricity comes from renewable resources.  This is not to say that this area should be overlooked.  Saving energy serves practically the same purpose as installing new capacity.  The implementation of large-scale projects such as the TREM and electric vehicles, coupled with the growth in population will increase demand on the grid, demand that may force ICE to burn fossil fuels to avoid blackouts (but see the section on Energy, above).

Most residential energy usage occurs in the kitchen and the bathroom, and more specifically from refrigerators and hot water heaters.  By Incentivizing Costa Ricans to replace old appliances with more efficient ones, or with renewable appliances like the solar-powered hot water heater, 60,000 metric tons of CO2 equivalent emissions can be reduced each year.  This number is relatively small due to the proportion of clean electrons entering Costa Rican homes.  At the current selling price for the new equipment, many citizens are not able to afford upgrading appliances.

Sources: 

Conversations with BUN-CA.  ICE's resource planning document (2008).

Agriculture: 1.1 Million Metric Tons CO2 Equivalent Reduction

The agricultural sector in Costa Rica currently emits 5 million metric tons of CO2 equivalent, or 40% of total emissions. 

Our report focuses on the energy sector, however we covered the agricultural sector because we believed that 'easy' reductions may be available for the country via best practices.  Unfortunately, controlling agriculture emissions presents leakage problems, as farms can easily move across borders.

The four main crops of Costa Rica, sugar cane, pineapple, banana, and coffee produce 2 million metric tons of residual biomass annually. We believe that agriculture has a significant opportunity to reduce carbon emissions by reducing use of nitrogen-based fertilizers.  By composting waste biomass and using it as a substitute for synthetic fertilizers, we believe that upto 800,000 metric tons of CO2 equivalent per year can be reduced.  Furthermore, such efforts could serve to foster the Costa Rican fertilizer industry and thus result in positive economic benefits.

The beef cattle and dairy industries produce over 200,000 metric tons of methane gas on an annual basis, or over 4 million metric tons of CO2 equivalent.  Methane, a greenhouse gas much more potent than CO2, is difficult to capture.  Most cattle in Costa Rica, however, are dairy cattle and by implementing existing methane capture technology (methane biodigestors), the agriculture sector can reduce emissions by an additional 300,000 metric tons of CO2 equivalent per year.

The implementation of methane biodigesters and biomass composting to replace nitrogen-based fertilizers has the potential to reduce 1.1 million metric tons of CO2 equivalent emissions by 2021.  

Sources:
Inventory of Gases Due to Greenhouse Effect, Meteorological Institute of Costa Rica. M.A.G/Edmundo Castro. 

Forestry: 4.1 Million Metric Tons of CO2 Equivalent Reduction

Until the late 1980s, Costa Rica had one of the highest rates of deforestation in the world, reducing forested land area from 75% to a mere 21% in 1987.  While government initiatives have increased forest coverage to over 50%, reforestation still presents the most significant opportunity to sequester carbon.

Reforesting 510,000 hectares of pastureland (a figure derived from the forest regeneration rate from 1997-2005) would sequester approximately an additional 3.7 million metric tons of CO2 in 2021.  In addition, if 55,000 hectares of land were planted with trees, following FONAFIFO’s current planting rate, an additional 400,000 metric tons of CO2 could be sequestered.  In total, 4.1 million tons of CO2 could be sequestered in 2021.

One strategy for forest regeneration is the expansion of the Payment for Environmental Services (PES) program. According to FONAFIFO, 300,000 hectares a year are currently enrolled in PES (6% of national territory), but there are 900,000 hectares of unsatisfied demand.

Forest regeneration and reforestation can serve as a short to medium term strategy in reaching the carbon neutrality goal, but land that can be converted to forests is limited, so other measures should be considered. Furthermore, tree planting is a temporary solution, as the land on which trees can be planted is limited.  The major constraints to tree planting are capital to pay for the trees, labor, and necessary monitoring to reduce tree mortality. For pastureland conversion, major impediments are competing land uses, and capital to support landowners in reforestation efforts. In addition to carbon sequestration, forests should continue to be recognized as a source of other environmental or “ecosystem services,” including watershed protection, erosion control, landscape beauty, and biodiversity, among others.  If Costa Rica seeks permanent carbon neutrality, however, a lasting solution must be found outside the forestry sector.

Sources:
FONAFIFO
Ricardo Russo, Earth University. (Laurance et. al 2000) from Ramirez, Octavio A.; Carpio, Carlos E.; Ortiz, Rosalba; Finnegan, Brian. “Economic Value of the Carbon Sink Services of Tropical Secondary Forests and its Management Implications.” Annual Meeting of the American Agricultural Economics Association, Tampa, FL, July 3-August 2000.

Conclusion: Achieving the Goal of CO2 Neutrality

Our analysis shows that current plans, even if implemented to their maximum potential, leave Costa Rica short of its goal of CO2 neutrality by 6 million tons.  The roadmap above, if implemented as a synergistic plan, will likely have multiplier effects that cannot be accounted for in a preliminary roadmap.  Even still, such efforts will likely not be enough.

The goal of CO2 neutrality by 2021 is NOT unreachable.  In fact, our conclusion is quite the opposite: CO2 neutrality remains a viable and important goal for Costa Rica.  There are three key reasons we believe this. First, Costa Rica has a track record of delivering big wins on the environmental front.  Twenty years ago, Costa Rica was one of the world’s most heavily deforested nations, when it decided to turn it act around. Since then, Costa Rica has reforested so aggressively that it now has over 50% forest cover.  Today, it plants more trees per capita than any nation on earth.  Second, Costa Rica is endowed with amazing renewable energy resources.  Despite its recent misguided move towards fossil fuel power plants, Costa Rica’s electricity matrix is still composed of over 90% renewable energy sources, making it one of the cleanest in the world.  Finally, Costa Rica has been a visionary leader on energy and environmental issues. People likw Jorge Manuel Dengo Obregon set our nation on the right path and we still benefit from his work today.  The goal of achieving carbon neutrality is also visionary.  It is the vision that will inspire a generation of Costa Rica's to work on something bigger than themselves.  If any nation can achieve CO2 neutrality, that nation is Costa Rica.

President Arias’ declaration of achieving “Peace with Nature” was another example of Costa Rica's bold leadership on issues that matter.  The goal of CO2 neutrality is one that Costa Rica is especially fit to achieve.  As the data indicates, a variety of approaches will be required for Costa Rica to meet its objective.  Surmounting the discrepancy between what current plans can achieve and what reductions will be required in 2021 for neutrality will take strong leadership, political will, innovative thinking, and large-scale behavioral modification.  The greatest opportunity for Costa Rica to reduce CO2 emissions lies in getting Costa Ricans out of their cars and onto public transportation.  By creating incentives, financial and other, and by creating the necessary public transit infrastructure, Costa Rica's leaders can enable and encourage its citizens to stop using cars for personal transport and thereby reduce emissions by a much greater amount than forecasted by this report.  

The time for action is now. 

Costa Rica has the opportunity to enter the Copenhagen climate change negotiations this December as a model for the world, as a country that has taken sober stock of where it stands in relation to CO2 neutrality and still remains committed to achieving this historic goal in spite of the great challenge it presents.  Today, this nation has the great opportunity to become a world leader on climate change by exercising the strong leadership and forward-thinking policies that are historically synonymous with Costa Rica.  Let's start.