Environment at a Glance Indicators

Latvia

This country profile features selected environmental indicators from the OECD Core Set, building on harmonised datasets available on OECD Data Explorer. The indicators reflect major environmental issues, including climate, air quality, freshwater resources, waste and the circular economy, biodiversity, and selected policy responses to these issues. Differences with national data sources can occur due to delays in data treatment and publication, or due to different national definitions and measurement methods. The OECD is working with countries and other international organisations to further improve the indicators and the underlying data.

Context

Latvia’s small open economy has been continuously growing, after recovering from the 2008 economic crisis. Latvia industrial base is smaller than in many other OECD countries. Agriculture, forestry and fishing account for a larger share of value added and employment than in most OECD countries. Income levels increased significantly in the past decades but are still below the OECD average, and population is ageing and declining. Latvia has one of the lowest population densities in Europe.

On the shores of the Baltic Sea, Latvia is a lowland country with some hilly elevations and about 500 km of coastline. The country has abundant forest and water resources and hosts a rich biodiversity, but limited mineral and non-renewable resources. Its diverse ecosystems include forests, grasslands, coastal areas and peatlands. The forestry and agricultural sectors play a key role in Latvia’s economy. Forests cover about half its territory and provide the country’s main domestic energy source, biomass. Natural resource-intensive products (wood products and paper, agricultural and food products) account for a large share of merchandise exports.

Latvia is a unitary state and has a centralised system of environmental governance, with key environment-related functions concentrated in the Ministry of Environmental Protection and Regional Development. Local governments are responsible for land-use planning and environmental services.

Climate change

Per person intensities of both production-based and demand-based CO₂ emissions (footprints) are well below the OECD and OECD Europe averages, reflecting the small industrial base and still relatively low incomes.

Greenhouse gas (GHG) emissions (excluding LULUCF) declined significantly between 1990 and 2000 due a shrinking industrial base and growing service sector. They increased until 2010 (except during the 2008 economic crisis) and have remained broadly stable since 2011 while GDP continued to increase. As a result, since 2011, Latvia has decoupled GHG emissions and total energy supply from economic growth, thanks to a gradual switch from fossil fuels to biomass for heat and power production and to improved energy efficiency. The LULUCF sector’s carbon sequestration capacity declined markedly since 2008 due to increased logging, forest ageing and conversion of grasslands into croplands. In 2020, GHG emissions decline by 5.9%, due to the Covid-19 pandemic and the associated restrictions put in place to contain its spread.

Energy mix

Latvia is among the leaders on renewables in the OECD. Solid biofuels (wood pellets, wood chips, charcoal, wood waste and residue, and straw) are the main renewable source. Hydropower is the second largest renewable source, with three large plants on the River Daugava and several smaller plants.

Air quality

Air emissions

Emissions of most major air pollutants have declined since the mid-2000s. Fine articulates (PM_2.5) and non-methane volatile organic compounds (NMVOCs) emissions have decreased thanks to lower use of fuelwood in individual heating installations. Nitrogen oxides (NOx) emissions decreased due to the implementation of stricter vehicle emission standards while more stringent regulations regarding maximum sulphur content in liquid fuels (in stationary sources and transport) helped reduce sulphur dioxide (SO₂) emissions. Latvia reached its 2020 Gothenburg Protocol objectives for SO₂, NOx, NMVOC and ammonia (NH₃) emissions.

Emission of carbon monoxide (CO) and NOx per unit of GDP are higher than the OECD average, partly due to the old vehicle fleet, but other intensities are below.

Emission reductions went on par with air quality improvements. Average population exposure to fine particles (PM_2.5), nevertheless remains above the new guideline value of 5 µg/m³ recommended by the World Health Organization.

Freshwater resources

Use of freshwater resources

Latvia has abundant water resources and a low abstraction intensity, putting the country under low water stress. Abstractions for public supply per person decreased until 2017, but increased since 2018.

The share of population connected to public wastewater treatment increased and most people benefit from secondary or tertiary (advanced”) treatment. The low network connection rate, compared to many other OECD countries, reflects the high cost of connecting sparsely populated areas to the network, which affects tariff affordability.

Waste, materials and circular economy

Municipal waste

Municipal waste generation grew until 2007; it decreased in the aftermath of the crisis, with reduced household purchasing power, but has picked up again since 2012. Per person generation of municipal waste has increased but remains below the OECD average. Landfilling, though decreasing, still represents more than half of treatment. The recovery rate of municipal waste grew significantly after 2011 with the gradual introduction of separate collection, development of extended producer responsibility systems and increased landfill charges.

Material consumption

Material consumption declined significantly with the economic recession between 2007 and 2009. This was partly due to population decline and reduced purchasing power after the crisis. Material intensity per person, although fluctuating has generally increased since 2009. Material productivity increased in the past decade but did not reached pre-crisis level and remains below the OECD average. Non-metallic minerals dominates the materials mix, largely being construction materials. Biomass comes the second, the bulk of it is wood used as an input by the wood processing industry, and by the energy sector as an energy source. Biodiversity

Even though land use has significantly changed over time, Latvia is one of the least urbanised OECD countries. Nevertheless, recent urbanisation trends are increasing the fragmentation of natural environments.

There are 27 443 species known in Latvia (18 047 animals, including mammals and birds; 5 396 plants; and about 4 000 fungi). Common mammal species are squirrel, fox, hare, lynx and badger. About 907 species (3.3% of the total number) are rare and threatened. The main pressures on habitats and species are natural system modifications, which entail fragmentation and degradation of ecosystems as a result of human activity, including dam construction, changes of hydrological regime and land reclamation. Other threats are resource use (e.g. intensive forestry), pollution, agricultural expansion, urban development and climate change.

Protected areas

Latvia achieved the 2020 Aichi targets (under the Convention on Biological Diversity) to protect at least 17% of land area and far exceeded the 10% target for coastal and marine areas. However, only a limited number of marine sites have strict management objectives (IUCN categories I and II) and about 1.1% of the country’s land is covered by protected areas that have had management effectiveness assessments and the same is true for 0.3% of the EEZ. Protected Area Management Effectiveness (PAME) evaluations, can be defined as: “the assessment of how well protected areas are being managed – primarily the extent to which management is protecting values and achieving goals and objectives" (Hockings et al. 2006).

Policy instruments

Environmentally-related taxation

Latvia’s revenue from environmentally related taxes is high by international comparison, albeit declining in recent years. Like all OECD countries, Latvia collects most environmentally related tax revenue through taxes on energy products and to a lesser extend motor vehicles. Pollution and resource taxes do not raise much revenue. They are all part of the natural resource tax, in place since 1991. It includes a carbon tax and levies on air emissions, water abstraction, water/soil pollution, waste and packaging materials.

Government support to fossil fuels and effective carbon rates (ECR)

Latvia implicitly supports the consumption of fossil fuels through favourable tax treatments. The single largest support measure is the Guaranteed Payment which provides annual guaranteed payment for installed capacity or power component for combined heat and power plants using natural gas. In response to the changing energy market due to restrictions on Russian oil, Latvia has worked to establish alternative forms of supply through LNG. Additionally, fossil fuel support measures were implemented, providing reduced, regulated, or capped average energy prices and/or budgetary support.

Like many other EU countries, Latvia puts a price on GHG emissions via energy and carbon taxes and participation in the EU Emissions Trading System (EU ETS). Overall, less than 44% of GHG emissions from energy use are priced and 23% are priced above 120 EUR/tonne of CO₂. These shares increase to 91% and 47% respectively, when excluding emissions from the combustion of biomass, meaning that most emissions from biomass are not taxed.

Technology and innovation

Environmentally-related government R&D budget has increased from less than 2% of total R&D budget in 2005 to almost 10% in 2021, albeit with large year-to-year fluctuations.

Latvia is a marginal eco-innovation performer. The number of patent applications on climate change mitigation and environmental management, filed for protection in at least two jurisdictions by Latvian inventors, remains below 15 per year, a low number.

Environment-related official development assistance (ODA)

The objective of Latvia’s development co-operation policy is to contribute to the implementation of the 2030 Agenda, particularly in its priority partner countries. Latvia’s development and foreign policies are closely aligned. With a clear focus on the European Union’s (EU) Eastern Partnership and Central Asia, Latvia’s development co-operation aims to promote sustainable growth and stability. Latvia’s total official development assistance (ODA) (USD 84 million) increased in 2022, representing 0.21% of gross national income (GNI). This was mainly due to an increase in both its bilateral (including in-donor refugee costs) and multilateral ODA.

References and further reading

CBD (2022), Country profiles: Latvia, https://www.cbd.int/countries/profile/?country=lv

OECD (2023), OECD Inventory of Support Measures for Fossil Fuels: Country Notes, OECD Publishing, Paris, https://doi.org/10.1787/5a3efe65-en 

OECD (2023), "Latvia", in Development Co-operation Profiles, OECD Publishing, Paris, https://doi.org/10.1787/2dcf1367-en.

OECD (2022), OECD Economic Outlook, Volume 2022 Issue 1, OECD Publishing, Paris, https://doi.org/10.1787/62d0ca31-en.

OECD (2019), OECD Environmental Performance Reviews: Latvia 2019, OECD Environmental Performance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/2cb03cdd-en.

UNEP-WCMC (2024), “Protected Area Profile for Latvia”, the World Database of Protected Areas, www.protectedplanet.net