Costa Rica has made strides toward its goal of becoming the first carbon-neutral country in the world by 2021, but challenges remain in completing the systematic changes needed to lower emissions and transform all energy consumption.

Long a leader in environmental protections, Costa Rica has begun work on its most ambitious goal yet: becoming the first carbon-neutral nation in the world by 2021. Costa Rica is already one of the world's foremost users of renewable energy sources, with 98% of its power coming from hydropower generation, geothermal, wind, and solar sources; during a 76-day span between June and August 2017 the nation ran on 100% renewables. Yet, achieving total carbon neutrality is another matter altogether, and significant reform will be needed in the transportation and energy industries to reach that goal.

When then-president Óscar Arias announced Costa Rica's goal of achieving carbon neutrality by 2021, the renewable energy industry was far less mature than it was today. The past decade has brought an understanding that a focus on renewables is in Costa Rica's economic and financial best interest. After aggressive development led to the loss of almost half of Costa Rica's forested land between 1950 and 1983, new conservation efforts and a recommitment to renewable energy has led to the return of 25% of this lost forest land, bringing a host of positive side effects through economic opportunities in ecotourism and reduced emissions.
Hydropower has become the nation's single-most important source of energy, with around 75% of all electrical power generated by hydropower projects. Costa Rica's geography makes it an ideal fit for hydropower generation, with high levels of rainfall and rivers that are well situated to provide consistent generation. Several major projects have commenced operations in the last decade as Costa Rica has recommitted to renewable energy, including the 305.5MW Reventazón facility, the largest such plant in Central America. The Diquís hydroelectric facility, an even larger project, was proposed in 2007 but has yet to be constructed due to disputes over indigenous tribes who would be displaced by the project. Hydropower plants have at times run into problems that may be exacerbated by a shifting climate. The plants require steady rainfall to function, and recent droughts have stressed the system at times.

Yet, while Costa Rica has made indisputable gains, the path for complete carbon neutrality contains considerable challenges. Costa Rica's 2016 Nationally Determined Contribution to the 2016 Paris Climate Agreement declared that the nation's long-term goal was to become carbon neutral by 2085, a significant shift from its stated goal a few years earlier. More recently, President Luis Guillermo Solís has reaffirmed that his administration's goal is carbon neutrality by 2021, but industry leaders have acknowledged that this may not be feasible.

The transportation sector will be Costa Rica's largest obstacle to achieving its goal of carbon neutrality. As the population has grown and development has increased, the number of cars on the road has doubled over the past two decades and now accounts for 44% of net greenhouse gases and 81% of all fossil fuel consumption. New technologies have helped reduce power consumption and emissions in other consumer fields, but, the majority of Costa Rican cars are still more than 20 years old with low fuel efficiency and high emissions. And the country's public transportation fleet consists almost entirely of diesel buses.
The government has previously put forth tentative proposals to move to electric and hybrid vehicles, but these actions have thus far been slow to come to fruition. And there is a larger risk: any large-scale vehicle buyback or electric conversion program would not be cheap, and foreign investors have warned Costa Rica about the risk of losing sight of the forest through the trees and damaging the country's economy through excessive spending on renewables. All parties agree that changes on the transportation front are sorely needed; San José's traffic is among the worst in Latin America, and increased efficiency on this front would bring a host of economic and social benefits. It appears, however, that change will take longer than the 2021 target.