Latvia’s environmental performance has improved in several areas, such as emissions of greenhouse gases and most air pollutants, residential energy efficiency, wastewater treatment and waste management. However, sustained economic growth is likely to intensify pressures on the environment and biodiversity. This chapter provides an overview of Latvia’s environmental achievements since the mid-2000s, and its remaining challenges. It reviews progress in reducing the energy and carbon intensity of the economy, improving air quality, strengthening waste and water management, and halting biodiversity loss.
OECD Environmental Performance Reviews: Latvia 2019
OECD Environmental Performance Reviews
Chapter 1. Environmental performance: Trends and recent developments
Abstract
“The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
1.1. Introduction
Latvia joined the European Union (EU) in 2004 and the OECD in 2016. Its small, open economy has been continuously growing since 2010, which helped increase per capita income and well-being of the country’s 2 million people. However, income levels are still well below those in many other OECD economies. Poverty, income inequality and regional disparity in accessing public services remain widespread. The population is ageing and declining.
A lowland country on the shores of the Baltic Sea, Latvia has abundant forest and water resources. Forests cover about half its territory, are a key economic asset and provide the country’s main domestic energy source, biomass. The use of renewable energy sources has expanded and energy efficiency increased. Environmental performance has improved in many areas, including greenhouse gas (GHG) emissions, air pollution, wastewater treatment, waste management and protected natural areas. However, more needs to be done. Some environmental pressures are likely to increase with sustained economic growth and higher income levels, requiring better alignment of environmental and development objectives.
1.2. Main economic and social developments
1.2.1. Economic structure and performance
The small and open Latvian economy has experienced strong growth in recent years. Growth is expected to continue at 2.7% in 2020 (OECD, 2019a). Latvia implemented wide-ranging structural reforms in response to the 2008-09 global economic crisis, such as in the areas of fiscal policies, social protection and the business environment. However, it took longer than the neighbouring Baltic countries Estonia and Lithuania to return to pre-crisis level (Figure 1.1). Although gross domestic product (GDP) per capita increased over the past decade, it is still lower than that of the other Baltic states and about two-thirds of the OECD average. Although unemployment has fallen, it remains above the OECD average (Basic statistics).
Latvia does not have many mineral resources other than peat, dolomite, sand and gravel. It is rich in forest and water resources, however. Its industrial base is smaller than in many other OECD countries (Basic statistics). Agriculture, forestry and fishing account for a larger share of value added and employment than in most OECD countries. Wood processing and food and beverages are the main manufacturing and exporting industries. Imports and exports of goods and services, mostly to neighbouring countries, accounted for more than 60% of GDP in 2016. The export performance has been improving in terms of product and destination diversification, but a general skill mismatch and weak innovation have kept firms from moving further up global value chains. Productivity growth slowed considerably in the past decade (OECD, 2019b).
Figure 1.1. The Latvian economy has been growing steadily since 2010
1.2.2. Well-being and quality of life
Territorial inequality, emigration and a decreasing and ageing population have been identified as major challenges to future sustainable growth prospects (Cross-Sectoral Coordination Centre, 2018). In 2017, Latvia had just under 2 million inhabitants, 13% below the 2005 level. Its population density (30 people/km2) is lower than in most OECD Europe countries, with population concentrated in a few urban areas. The sparse population makes it costly to provide widespread access to public services and infrastructure, which contributes to persistent regional disparity in economic and employment opportunities and, in turn, quality of life.
The capital, Riga, is at the centre of the economy. More than half the population lives in the city and surrounding municipalities in the Pierīga region. Riga has lost inhabitants mostly to this region in a process of unco‑ordinated low‑density development driven by middle- to high‑income households moving outside the city. Urban sprawl, which was fairly insignificant in the past, intensified, with an annual net take rate (0.38%) not far below the European average (0.41%) in 2006‑12 (EEA, 2017a). Urban sprawl reduces the extent of natural areas and causes landscape fragmentation (State Land Service, 2016). At the same time, rural‑to‑urban migration and ageing of the rural population have led to abandonment of farmland, contributing to persistent rural unemployment and poverty.
Latvia has experienced improvement in a large number of indicators of the OECD Better Life Index. Nevertheless, it performs poorly in many dimensions of the index, such as access to well-paid jobs, health care system and affordable, good quality housing (Figure 1.2). Poverty and income inequality are high (Basic statistics). Despite gains over the past decade, Latvian life expectancy is still six years below the OECD average, at 74 years, as a result of higher mortality from cardiovascular disease and cancer, as well as accidents and injuries.
Figure 1.2. Well-being indicators suggest room for improvement
Latvia ranks at about the OECD average in Better Life Index environmental quality indicators (Figure 1.2). Over 60% of Latvians who responded to an EU survey said growing waste generation was among the most important environmental issues – more than in other EU countries (Figure 1.3; Chapter 4). Nearly half of Latvian respondents thought pollution of air and of rivers, lakes and groundwater were also important. Fewer Latvians than in the EU as a whole flagged climate change and decline of species and ecosystems as a source of concern (EC, 2017a). Regional economic fragmentation is reflected in people’s concerns. Latvians have diverse views on what the main environmental issue is. People from Riga are concerned about pollution from vehicles and industries, those from Vidzeme about excessive use of natural resources and those from Zemgale and Kurzeme about agricultural pollution. A majority of Latvians, however, would prioritise investing in the country’s forests and the Baltic Sea if they had funds available for environmental protection (Baltic International Bank, 2017).
Figure 1.3. Latvians are most worried about waste and pollution of air and water
1.3. Moving towards an energy-efficient and low-carbon economy
1.3.1. Energy structure and consumption
The Sustainable Development Strategy until 2030 (Latvia 2030) and 2030 Energy Policy call for continuing to increase the use of renewables and implementing energy efficiency measures as ways to contribute to both energy independence and environmental sustainability. The National Renewable Energy Action Plan (NREAP) and National Energy Efficiency Action Plan lay out key targets and actions for 2020 (Table 1.1).
Table 1.1. Latvia’s renewables and energy efficiency targets
Note: Mtoe = million tonnes of oil equivalent.
Source: Cross-Sectoral Coordination Centre (2018), “Implementation of the Sustainable Development Goals”; Eurostat (2019), “Share of energy from renewable sources”, Renewable Energy Statistics (database); Ministry of Economy (2017), “Information report on progress towards the indicative national energy efficiency target in 2017-2019 in accordance with Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency”; Odysee-Mure (2019), Key indicators (database).
The energy mix and renewables
Latvia is among the leaders on renewables in the OECD. In 2017, renewables accounted for 40% of its total primary energy supply (TPES), well above the OECD average and the shares of Estonia and Lithuania (Figure 1.4). Solid biofuels (wood pellets, wood chips, charcoal, wood waste and residue, and straw) are the main renewable source. Biofuels and renewable waste account for a third of the energy mix, the highest share in the EU.
Figure 1.4. Renewables cover a large and increasing share of energy needs
Hydropower is the second largest renewable source, with three large plants on the River Daugava and several smaller plants. They deliver half the country’s electricity, on average, depending on precipitation levels. Favourable hydrological conditions have led to higher hydropower output in recent years (Figure 1.4). With less than 70 MW of installed capacity, wind power plays a limited role, despite good potential in the Baltic countries (Lindroos et al., 2018). Estonia, for example, has over four times as much installed wind capacity as Latvia, and Lithuania six times as much. Solar power is virtually non-existent.
Energy supply from renewables increased by 29% over 2005-17. This growth helped reduce the CO2 intensity of heat and power generation (Figure 1.5) and increase energy independence. However, Latvia remains heavily dependent on energy imports,1 especially of transport fuels and natural gas. Natural gas is mainly imported from the Russian Federation and used for electricity and heat generation in combined heat and power (CHP) plants. Overall, fossil fuels account for nearly 60% of TPES, well below the OECD average of 80% (Figure 1.4).
Figure 1.5. Latvia has made progress in decoupling economic growth from energy use and GHG emissions
Latvia is on track to reach its overall 2020 EU renewables target and has already exceeded the NREAP indicative target for the heating and cooling sector (Table 1.1). A generous support system fostered the use of solid biofuels and natural gas in high-efficiency CHP plants (Chapter 3), and helped increase electricity and heat production from renewables (Figure 1.4). Solid biofuels cover nearly half of heating needs, mostly as firewood in individual heating systems and biomass in CHP plants of district heating networks.
However, additional power generation is needed to meet the NREAP renewable electricity target of nearly 60% of electricity consumption. Renewables cover less than 3% of transport fuel consumption, far from the 2020 EU target of 10%. Most domestic biofuel production consists of biodiesel from rapeseed and rapeseed oil, the majority of which is exported (Chapter 3). Given the current and expected role of solid and liquid biofuels, Latvia should identify and assess synergies and trade-offs between further development of biofuel production and use, and the policy objectives related to climate, air pollution, water, land use and biodiversity (Box 1.1).
Box 1.1. Sustainability indicators for bioenergy
Bioenergy technology is projected to increasingly contribute to energy use for electricity, heating and transport. In the International Energy Agency 2°C Scenario, bioenergy provides nearly 17% of final energy demand by 2060, compared to 4.5% in 2015.
Bioenergy is a complex field, as it interacts with sectors such as agriculture and food production, forestry and waste management. For example, production of wood-based biomass or crop-based biofuels can affect land use, biodiversity, water and carbon absorption capacity. If bioenergy supply and use are to expand, they need to be sustainable.
The Global Bioenergy Partnership, an initiative bringing together 50 national governments and 26 international organisations, developed 24 indicators to help track bioenergy sustainability:
The environmental indicators are life-cycle GHG emissions; soil quality; harvest levels of wood resources; emissions of air pollutants; water use and efficiency; water quality; biological diversity in landscape; and land use and land-use change related to bioenergy feedstock production.
The social indicators are allocation and tenure of land for new bioenergy production; price and supply of a national food basket; change in income; jobs in the bioenergy sector; change in unpaid time spent by women and children collecting biomass; bioenergy used to expand access to modern energy services; change in mortality and burden of disease attributable to indoor smoke; and incidence of occupational injury, illness and fatalities.
The economic indicators are productivity; net energy balance; energy diversity; gross value added; change in fossil fuel consumption and traditional biomass use; workforce training and requalification; infrastructure and logistics for bioenergy distribution; and capacity and flexibility of bioenergy use.
Source: IEA (2017), Delivering Sustainable Bioenergy.
Energy intensity
Energy use and intensity have declined, but there is scope for significant energy savings. Between 2005 and 2016, TPES decreased by 6% and total final energy consumption (TFC) by 7%, despite sustained economic growth for most of the period (Figure 1.5). As a result, the primary energy intensity of the economy (as measured by TPES per unit of GDP) fell below both the OECD average and those of many economies in transition. However, it picked up again in 2017, mostly due to increased used of diesel for transport. Final energy intensity (as measured by TFC per unit of GDP) also declined, but remains steadily above the OECD average (Figure 1.5). This indicates that Latvia has a relatively efficient energy transformation sector compared to other OECD countries, but efficiency in final energy use is below the OECD average.
Energy use
Latvia needs to tackle increasing energy consumption in agriculture, industry and transport, along with persistently high energy use in buildings, to achieve the 2020 energy intensity and energy savings targets in the National Energy Efficiency Action Plan (Table 1.1). While agriculture accounts for a relatively minor 4% of energy use, its energy consumption has increased more than in all other sectors (by 22% over 2005-16) with growing production and extension of cultivated area. Industry accounts for a lower share of energy use than the OECD average (Figure 1.5), reflecting the relatively small industrial base. However, industrial energy use rose by 12% between 2005 and 2016. While energy use in most manufacturing sectors declined, it boomed in the wood and wood products sector to reach 60% of all industrial energy use.
The residential sector is the main energy user, accounting for 30% of energy consumption, higher than the OECD average (Figure 1.6). Latvia has implemented several measures to improve energy performance of buildings, including minimum energy performance requirements and thermal insulation standards. It has also provided financial support for investment in upgrading district heating networks and thermal renovation of residential buildings, with large EU funding contributions (Chapter 3). Energy efficiency gains and population decline drove consumption down by 26% over 2005-16. However, most of the building stock is over 25 years old and consists of multi-owner buildings with poor energy performance. In 2016, heat consumption per square metre was about 14 kg of oil equivalent (kgoe), among the highest in Europe and well above that of most other northern European countries (which also experience freezing winter temperature) (Odyssee-Mure, 2019).2 Continuing to improve efficiency in residential buildings would have multiple benefits, including reducing GHG and air pollutant emissions and energy poverty risk (Chapter 3). In 2018, 7.5% of households could not keep their home adequately warm, more than twice the share in most other northern European countries.3
Figure 1.6. Household buildings and transport are the main energy users
Transport is the second largest energy user, accounting for more than a quarter of energy consumption, as well as the main source of GHG emissions (Figure 1.6; Section 1.3.2). Rail accounts for 76% of freight transport, its largest market share in the EU. However, the share has decreased in the 2010s in favour of roads, and most trains run on diesel. The role of rail in passenger traffic is low and declining, accounting for less than 5% of passenger travel. The sparse and declining population makes it costly to provide widespread access to public transport (Chapter 3). Hence cars are by far the dominant mode of transport (80% of passenger travel).
Energy consumption in road transport, which accounts for over 90% of energy used in transport, has increased by 5% since 2005. Motor vehicle ownership is below the OECD average, but is expected to increase along with income level and suburbanisation, despite population decline. Close to 80% of the passenger vehicle fleet is over ten years old (Figure 1.7), as in many other Central and Eastern European countries. The fleet age hinders development of renewables in transport. Dieselisation of the car fleet has been rapid: the number of diesel cars rose from a third of the fleet in 2010 to more than half in 2017. Although newly registered passenger cars in Latvia are less carbon intensive than in the past, they still are the second most carbon-intensive cars in the EU. Their emissions are just below the 2015 target, but far from the 2020 target (Figure 1.7).
Figure 1.7. The vehicle fleet is old and carbon-intensive
1.3.2. Climate change mitigation and adaptation
GHG emission mitigation performance
Latvia more than achieved its Kyoto target of reducing emissions by 8% in 2008‑12 from 1990 levels. Gross GHG emissions (without emissions and removals from land use, land‑use change and forestry, or LULUCF) declined by 60% between 1990 and 2000 due to the shift from central planning to a market-based economy, with a shrinking industrial base and growing service sector.
After having broadly followed the economic cycle in the 2000s, gross GHG emissions slightly declined in the early 2010s and have stabilised at around 11 million tonnes of CO2 equivalent (Mt CO2 eq.) since 2013, despite steady economic growth. As a result, since 2011, Latvia has decoupled GHG emissions and CO2 emissions from fuel combustion from economic growth (Figure 1.5), thanks to a gradual switch from fossil fuels to biomass for heat and power production and to improved energy efficiency (Section 1.3.1). The GHG emission intensity of the economy has thus declined, and has remained well below the OECD average (Basic statistics). This also reflects the small industrial base and still relatively low incomes.
Overall, gross GHG emissions decreased by 1.3% between 2005 and 2016. This puts Latvia on track to meet its 2020 target, under the EU Effort Sharing Decision, of limiting the increase in GHG emissions to 17% of the 2005 level (Figure 1.8). The target covers emissions from sectors outside the EU Emissions Trading System (EU ETS), mostly transport, agriculture, buildings, small industrial facilities and waste.
Figure 1.8. Further efforts are needed to meet the 2030 EU target
The EU‑wide cap-and-trade system covers only about a fifth of Latvia’s emissions, i.e. those from large power plants, most energy-intensive industrial installations and aviation. By comparison, the EU ETS covers about half of EU emissions. The difference reflects Latvia’s limited number of industrial installations above the capacity threshold, the large share of renewables in the energy mix and the large shares of emissions from transport and agriculture (Figure 1.9), which are excluded from the cap.
Transport is the largest source of GHG emissions. Transport emissions rose by 3% over 2005-16, to 28% of total GHG emissions (Figure 1.9). Latvia is among the OECD countries with the highest shares of emissions from agriculture (25%) and where emissions from agriculture have grown the most (by 4% over 2005-16) (Figure 1.9). This is due to increases in cultivated area, cattle and fertiliser consumption.
Figure 1.9. Transport and agriculture are the main sources of GHG emissions
GHG emission mitigation outlook to 2030
Projections show GHG emissions excluding LULUCF declining to 9% below the 2005 level by 2030, or to 60% below the 1990 level. Hence Latvia is projected to exceed the 2030 target of a 45% reduction set by the Sustainable Development Strategy. Emissions from power and heat generation, transport, and the residential and commercial sectors are projected to decrease. These projections refer to a with-existing-measures scenario, i.e. they take into account the effect of planned measures to promote switching to renewables and improve energy efficiency in buildings and industry. The adoption of cleaner vehicle technology and alternative transport fuels is expected to mitigate GHG emissions associated with increasing freight and passenger traffic (LEGMC and MEPRD, 2019). To realise the projections, it is essential for Latvia to fully and timely implement those measures.
However, according to the same projections, emissions from agriculture are expected to continue rising with expansion of agricultural land, cultivation of organic soil, rising amounts of production and livestock, and increased use of nitrogen fertilisers (LEGMC and MEPRD, 2019). Agriculture is projected to account for 30% of gross GHG emissions in 2030. This growth is projected to partially offset reductions in other non-EU ETS sectors, such as transport and the residential and commercial sectors. Overall, projections show non-EU ETS emissions decreasing by 4.4% by 2030, compared to their 2005 levels. Thus Latvia is expected to miss the 2030 target of reducing these emissions by 6% from 2005 (Figure 1.8).
With LULUCF, total GHG emissions are projected to more than double from the 2005 level by 2030 (Figure 1.8). The LULUCF sector’s carbon sequestration capacity declined markedly, by 78%, over 2005-16. The sector became a net GHG emitter in 2014 for the first time. LULUCF had positive net emissions in 2014-15 (Figure 1.10). Increased logging and forest ageing will continue to reduce GHG removal capacity, as will do conversion of grasslands into croplands (LEGMC and MEPRD, 2019).
Figure 1.10. Increasing forest harvesting reduced net GHG removals
Latvia is preparing its National Energy and Climate Change Plan 2021‑30, in line with EU requirements, and its Low Carbon Development Strategy 2050, as required by the Paris Agreement under the United Nations Framework Convention on Climate Change.4 The draft of the strategy, which is expected to be approved by the end of 2019, envisages reducing GHG emissions by 80% by 2050 from the 1990 level. The strategy should be accompanied by a plan that identifies the expected contribution of each economic sector to domestic emission mitigation and lays out gradually stricter targets. Several municipalities have also developed climate change mitigation plans and set mitigation targets (Box 1.2).
There is a need to improve the knowledge base on available mitigation options. Given the key economic and environmental roles of agriculture and forestry in Latvia, any climate change mitigation plan or strategy should include analysis of options for mitigating GHG emissions from these sectors, taking into account economic, social and environmental considerations. The long-term climate mitigation strategy should be based on a quantitative assessment of the climate mitigation and environmental benefits and impact of using domestically produced biofuels, compared with those for other energy sources.
Box 1.2. Climate action at the local level
Twenty municipalities, accounting for about 60% of the Latvian population, have submitted climate change mitigation plans under the Covenant of Mayors for Climate and Energy. Latvia is one of the EU countries with the largest number of people covered by the covenant. All the plans include 2020 CO2 emission reduction targets, one includes 2030 targets and two also cover adaptation.
Riga has committed to reducing its CO2 emissions by 55% from the 1990 level by 2020 via increased energy efficiency and renewables. It has also developed a Hydro Climate Strategy to help the city council adopt adequate flood management measures in light of increased flooding risk resulting from climate change.
Source: Covenant of Mayors (2018), Covenant of Mayors for Climate and Energy (website); EC (2017), “The EU Environmental Implementation Review Country Report – Latvia”.
Climate change impact and adaptation policy
Latvia has experienced a relatively stable increase in mean annual temperature over the past 50 years (1961-2010). The number of summer days has increased and the number of ice days decreased. There has also been an increasing trend in precipitation levels since the 1960s, along with higher intensity and frequency. Long-lasting period of intense rainfall resulted in severe flooding events, such as in August-October 2017, when floods destroyed crops and caused widespread damage to watercourses, the drainage system, water treatment installations and transport infrastructure.
Higher temperatures are expected to affect ecosystems and the health and well-being of Latvians. Half the population lives in an area 5-10 km wide, along the Baltic Sea and Gulf of Riga, which is vulnerable to sea level rise and flood risks. The Latvian Environment, Geology and Meteorology Centre is making efforts to analyse past and projected climate change as a basis for developing adaptation measures. Latvia developed flood risk assessments and flood hazard and risk maps as required by the EU Floods Directive.
Planning for adaptation to climate change is at an early stage. In 2018, the government developed a draft plan for climate change adaptation up to 2030. The plan aims to reduce risk and maximise benefits arising from climate change. It provides information on the past and future impact of climate change, analyses risk and vulnerability in six vulnerable sectors,5 presents adaptation measures and envisages the establishment of a monitoring system. Latvia should adopt this plan at the earliest opportunity and ensure systematic monitoring and evaluation of its implementation.
The country needs to accelerate implementation of adaptation actions. In 2018, Latvia amended its legislation on environmental impact assessment to require an evaluation of the impact of climate change on development projects. It now needs to ensure that the legislative requirements are thoroughly implemented. Some municipalities have started developing local climate change plans, but most lack the human and financial capacity to integrate climate change adaptation actions in their land-use and development plans and to put adequate adaptation measures in place.
1.4. Improving air quality
Latvia’s Environmental Policy Strategy 2014-20 presents objectives and actions for improving air quality. In line with EU requirements, Latvia set emission targets and air quality limit values that polluting activities need to comply with.
1.4.1. Air emissions
As in most OECD countries, air emissions have generally declined since the mid-2000s, despite GDP growth for most of the period (Figure 1.11). The intensity of air pollutant emissions, both per capita and per unit of GDP, is lower than the OECD average. Latvia met its 2010 targets under the EU National Emission Ceilings Directive for sulphur oxides (SOx), nitrous oxides (NOx), ammonia and non-methane volatile organic compounds (NMVOCs). However, according to projected emissions, more efforts will be needed to meet the 2020 and 2030 targets for NOx and ammonia, and the 2030 target for fine particulate matter (PM2.5). Thoroughly enforcing compliance with emission standards and promoting adoption of best available techniques in the residential, transport, industry and energy sectors would help reduce the distance to targets.
Figure 1.11. Air emissions have declined
Road transport, fuel combustion in the residential and commercial sectors, and industrial processes are the main air emission sources. Fuel use in the residential and commercial sectors is the main source of PM2.5 and NMVOCs, though these emissions have declined since 2005 (Figure 1.11). In particular, emissions of PM2.5 from these sectors fell by about 29% over 2005-16 thanks to lower use of fuelwood in individual heating installations. However, PM2.5 emissions from industry more than doubled with the switch from natural gas to solid biofuels in industrial facilities.
Road transport is the largest source of NOx emissions. Total NOx emissions decreased by 17% over 2005-16, largely due to an emission decline in the transport sector with the implementation of stricter vehicle emission standards. Still, in 2016, road transport was responsible for a third of NOx emissions. More stringent regulations regarding maximum sulphur content in liquid fuels (in stationary sources and transport) helped reduce SOX emissions.
Agriculture is the main source of ammonia emissions, which rose by 10% between 2005 and 2016, mainly due to increased use of mineral fertilisers. NOx emissions from agriculture increased as well. Latvia should ensure that air quality objectives and measures are taken into account in agriculture and rural development plans with a view to reducing emissions from NOX and ammonia.
1.4.2. Air quality
Air quality has improved over the past decade. Concentration levels of NO2 and ozone are lower than in most EU countries (EEA, 2017b).The mean population exposure to PM2.5 declined by 21% over 2005-17 to 13.6 micrograms per cubic metre (µg/m³). This is still higher than in most OECD countries, however. People are no longer exposed to very high concentration levels (above 25 µg/m³), but close to 90% of the population is exposed to concentration levels higher than the World Health Organization guideline value of 10 µg/m3 (Figure 1.12). Concentration levels of PM10 and NO2 increase with more intense heating use and road traffic.
Figure 1.12. Most of Latvia’s population is exposed to high PM2.5 concentrations
Riga suffers most from air pollution, with a mean concentration of PM2.5 higher than in other parts of the country. Exceedances of the PM10 daily limit value and NOx yearly limit prompted the municipality to implement action programmes in 2004-09, 2011-15 and 2016-20 to address emissions from vehicle use (e.g. infrastructure projects to reduce traffic on bridges, promotion of biking) and industrial activity. Riga and surrounding municipalities should co‑ordinate to accelerate implementation of air quality action programmes, which should reflect Riga’s metropolitan scale. The city could consider establishing low-emission zones while providing adequate public transport services.
Latvia’s population is vulnerable to the health impact of air pollution due to the compound effect of its relatively poor health status, ageing, the persistence of risk factors (e.g. smoking, alcohol consumption, obesity) and uneven access to good health care (OECD, 2016). This mix of factors explains Latvia’s high estimated mortality and welfare costs from exposure to outdoor PM2.5, with an estimate of over 600 premature deaths per million inhabitants, more than double the OECD average.6 The welfare cost of PM2.5 pollution has declined, but is still put at 6.9% of GDP, the second highest level in the OECD (OECD, 2019c).
Latvia has 11 state-managed monitoring stations, including 5 in the Riga agglomeration. However, several do not comply with EU requirements concerning reference methods, data validation and location (Directive 2015/1480). The air quality monitoring network needs to be extended and upgraded to provide more detailed information (e.g. hourly PM10 and PM2.5 measurements). An EU-funded project aims to address these issues.
1.5. Moving towards a circular economy
1.5.1. Material consumption
Biomass dominates material inputs and consumption. It represents 58% of domestic material consumption (DMC) and 70% of the materials exported. The bulk of it is wood that is used as an input by the wood processing industry, and by the energy sector as an energy source. Non-metallic minerals represent about a third of material inputs, largely in construction.
Material inputs and consumption declined significantly with the economic recession between 2007 and 2009. Over 2005-16, material consumption fell by 8%, while the economy grew by 18%. This was partly due to population decline and reduced purchasing power after the crisis. Still, in 2016, every inhabitant consumed, on average, 20 tonnes of materials, much more than the EU average of 13 tonnes and the OECD average of 16 tonnes.
The material productivity of the economy (GDP/DMC) improved by 29% over 2005-16. However, productivity gains were mostly driven by socio‑economic developments; improved resource efficiency seems to have played a minor role (Chapter 4). Latvia still generates less than half the OECD average for economic value per tonne of materials consumed (Figure 1.13).
1.5.2. Waste generation and treatment
Total waste generation has more than doubled since 2004, despite a decrease due to the economic crisis. Municipal waste generation grew till 2007; it decreased in the aftermath of the crisis, with reduced household purchasing power, but has picked up again since 2012 (Figure 1.13). In 2017, every Latvian inhabitant generated, on average, 436 kg of municipal waste, less than the OECD average of 524 kg/capita, but 37% more than the Latvian average in 2005.
Latvia has long relied mainly on landfilling. The country has gradually closed more than 500 unregulated landfills and dumps and replaced them with new regional landfills complying with EU standards. Landfilling, though decreasing, still represents more than 20% of treatment. Alternative waste treatment options are not yet well developed, but are expanding rapidly.
Figure 1.13. Progress on material productivity and waste recovery needs to be consolidated and strengthened
In recent years, the focus has been on production of biogas and compost to divert waste from landfill and contribute to renewable energy targets. Since 2016 some biodegradable waste has undergone anaerobic digestion with biogas recovery in specially engineered cells. Expansion of recovery and recycling capacity is planned by 2023 (Chapter 4).
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 (Chapter 4). From basically zero in 2000, the rate had risen to 30% by 2016 (Figure 1.13). This is still lower than the EU and OECD averages, however, and the 2020 EU target of 50% of municipal waste being prepared for reuse, recycling or recovery may be difficult to reach. However, the recovery rate would rise to 45% if the recovery of biodegradable waste through anaerobic digestion with biogas generation is accounted for (Figure 1.13). Still, many recoverable and biodegradable materials are sent to landfills, and Latvia missed the 2013 EU target of reducing the amount of biodegradable waste landfilled to 50% of the 1995 level.
1.6. Protecting biodiversity
Latvia is a lowland country with some hilly elevations and about 500 km of coastline. Forests, grasslands, wetlands and agricultural land are home to abundant biodiversity and ecosystems. Latvia is among the top six OECD countries in terms of forests, which cover about half the territory. The largest are in the northwest, on the Kurzeme Peninsula; along the banks of the Daugava; and in the northeast. Agricultural land is also extensive, covering more than 30% of the land area. As a result of agricultural land expansion over the last five decades, biodiversity-rich grasslands have shrunk to around 0.3% of the land area (Chapter 5).
1.6.1. Forest ecosystems
Forest area has slightly increased since 2005 (by 2%), as has the growing stock (Chapter 5).7 This has been driven by natural regeneration, complemented by seeding and planting on former agricultural land.
Forests provide cultural and recreational benefits and deliver ecosystem services, including habitat provision, carbon sequestration, water regulation and erosion prevention. They are also home to protected fauna species such as wolf, lynx and lesser spotted eagle. Latvian forests are nesting areas for 5% of the world black stork population.
Forests are a significant economic resource for Latvia. More than 70% of the forest area is used for production, mostly of sawnwood, wood-based panels and further processed products, as well as firewood, wood chips and pellets, of which Latvia is a leading exporter (Ministry of Agriculture, 2017). Exports of forestry-related products account for a larger share of GDP than in any other OECD country (Figure 1.14). The sector accounted for 2% of value added in 2017, the highest share in the OECD, and employed about 50 000 people.
Figure 1.14. Forests are a key economic asset
The intensity of forest use is lower than in other countries with a large forestry sector, such as Estonia, Finland and the Slovak Republic (Figure 1.14). Productivity of forest stands has dramatically improved in recent decades. Since 1960, the average amount of wood available for harvesting, an indicator of sustainable use, has more than doubled through technological advances and use of scientific information to select and log trees (Pierhuroviča and Grantiņš, 2017). About half of forests are certified (Chapter 5). However, between 2007 and 2013, forest habitats significantly deteriorated, mostly due to increased pressures from forestry and agricultural activities (EC, 2017b) (Chapter 5). Increased logging has resulted in decreasing GHG emission removals (Figure 1.10).
1.6.2. Agricultural land
Agricultural land has increased by 11% since 2005. About half is used for intensive production. The other half is used either extensively for pastures and meadows or not used. The Farmland Bird Index has increased in Latvia while it has declined in most other OECD countries, signalling that agricultural land is more favourable to birds and to biodiversity in general than in other countries (Chapter 5). However, environmental pressures have increased with the growth and intensification of agricultural production and livestock density (OECD, 2019d). Pressures include GHG and ammonia emissions associated with increased used of mineral fertilisers (Sections 1.3.2 and 1.4.1).
Between 2006 and 2016, nitrogen fertiliser consumption per hectare of fertilised agricultural area increased by 72%. As a result, the nitrogen surplus has risen by 47% since the mid-2000s, albeit from relatively low levels, and could grow further with the expected intensification of agricultural activity. In most other European countries the nitrogen surplus declined (Figure 1.15). Sales of pesticides have also increased since the mid-2000s.
Figure 1.15. Nitrogen fertiliser consumption and the nitrogen surplus have increased
In line with the EU Nitrates Directive (91/676/EEC) to prevent nitrate pollution from agricultural sources, more stringent regulations regarding manure and fertiliser use apply in Nitrate Sensitive Areas or Nitrate Vulnerable Zones such as Zemgale, which has rich soil and a large amount of crop farming. The area under organic farming more than doubled between 2005 and 2016, to 13.4% of agricultural land, nearly double the EU average.
The Rural Development Programme for 2014-20 focuses on “restoring, preserving and enhancing ecosystems related to agriculture and forestry” (EC, 2018). This goal entails assigning 14% of the agricultural area to biodiversity-related objectives, 17% to water management and 17% to soil management. The programme also aims at boosting energy‑efficient technology in agriculture and forestry and developing infrastructure in rural areas. Examples include upgrading the outdated drainage systems on which Latvia largely relies.
1.6.3. Conservation status of habitats and species
Protected areas are the main instrument for protecting biodiversity and cover slightly more than 18% of the land area, of which 12% is Natura 2000 sites. Latvia achieved Aichi target 11 for 2020 on marine and terrestrial areas, which calls for protecting at least 17% of terrestrial and inland water and 10% of coastal and marine areas (Figure 1.16).
Figure 1.16. Protected areas have reached the Aichi targets
Despite a relatively large share of protected areas, the latest available report on habitat conservation status under the Habitats Directive (92/43/EEC) shows that the condition of natural environments is quite poor (2013 data). A majority (51%) of habitats have unfavourable/bad conservation status, significantly higher than the EU average (30%). Only around 10% of all habitats have favourable conservation status. Forest, grassland and peatland habitats’ status are among the worst (EC, 2017b).
Latvian marine waters are affected by nutrient pollution and eutrophication, discharges of hazardous substances, invasive species and marine litter (EC, 2017b), which all put pressure on marine biodiversity. Some commercial fish stocks in the Baltic Sea have declined or are depleted (Chapter 5).
Large shares of species groups also show unfavourable conservation status. Over 400 species are listed as threatened, accounting for 2% of total known species, with amphibians and reptiles being the most vulnerable (OECD, 2019e). Protected species account for less than 3% of total known species (Chapter 5).
1.7. Improving water resource management
As in other policy areas, most of Latvia’s water policy requirements, objectives and targets are based on EU policies and legislation.8 Latvia is also a party to the Convention on the Protection and Use of Transboundary Watercourses and International Lakes and to the Convention on the Protection of the Marine Environment of the Baltic Sea Area, which aims to achieve good marine environmental status in the Baltic Sea by 2021.
In line with the EU Water Framework Directive, Latvia developed river basin management plans (RBMPs) for the Daugava, Lielupe, Venta and Gauja river basin districts for 2009-15 and 2016-21. The RBMPs provide information on the status of surface water and groundwater, analyse pressures on water quality and quantity, and list measures for improving water management. The four river basin districts are transboundary with Estonia, Lithuania, Belarus and/or the Russian Federation.
1.7.1. Water quantity
Latvia has abundant resources of surface water and groundwater, with about 17 000 m3 of renewable freshwater resources available per capita. It has more than 2 000 natural lakes and more than 12 000 rivers. Gross freshwater abstractions per capita are comparatively low. Public water supply accounts for about half of freshwater abstractions, higher than in other Baltic states, followed by agriculture, forestry and fishing (Figure 1.17). Projections prepared for the 2016-21 RBMPs show no significant changes in water demand to 2021. Given that Latvia’s freshwater resources exceed present and future requirements, water abstraction is not considered a key environmental pressure.
Figure 1.17. Per capita freshwater abstractions are among the lowest in the OECD
1.7.2. Water quality
The quality of surface water bodies is generally below the EU average, although knowledge gaps make international comparison problematic. The latest RBMPs show that about 20% of identified surface water bodies have high or good ecological status and a large majority have moderate status (Figure 1.18).9 About 20% of surface water bodies have poor or bad ecological status, mainly due to barriers to migrating fish (e.g. dams). The chemical status of most surface water bodies is unknown (Figure 1.18). About 70% of the water bodies for which the chemical status is known achieve good chemical status regarding priority pollutants.10 However, this corresponds to only 6% of water bodies’ area. No coastal or transitional (estuarine) water bodies achieve good chemical status (EEA, 2018a). Still, bathing water quality of lakes, rivers and coastal waters has improved with extended wastewater collection and more advanced treatment (Section 1.7.3). In 2017, the quality of 95% of Latvia’s bathing waters was excellent or good (EEA, 2018b).
Figure 1.18. The quality of surface water bodies is generally below the EU average
Diffuse pollution from agriculture, point-source pollution and morphological alterations are the main pressures on water bodies. Increased nitrogen surplus potentially affects water and soil quality (Section 1.6.2). Latvia needs to address these pressures on water bodies and to improve monitoring and evaluation of water quality. Water monitoring activities are planned as part of the Environmental Monitoring Programme 2015-20.
1.7.3. Public water supply, sanitation and sewage treatment
Public investment, largely EU-funded, has helped improve water service infrastructure and widen access to water supply and wastewater management services (Chapter 3). Water losses have declined substantially since 2004, especially in public water supply systems. Drinking water quality has generally improved, but varies depending on whether it is from large or small water supply zones.11 The 30 large water supply zones, covering about 60% of the population, reached a very high level of compliance (over 99% in 2013) for all parameters (microbiological, chemical, pesticides and indicators) in the EU Drinking Water Directive (EC, 2016). Small water supply zones have lower rates of compliance with chemical parameters. Exceedances are mainly due to naturally high concentrations of iron and manganese. This, combined with the costs of installing de‑ironing systems and upgrading the supply network, results in exceedances for iron concentrations in 17% of small water supply systems.
The share of population connected to public wastewater treatment increased from 70% in 2005 to nearly 82% in 2017. Most people benefit from secondary or tertiary treatment, which puts Latvia close to achieving full compliance with the EU Urban Waste Water Directive. The remaining 18% of the population is connected to independent treatment systems (Figure 1.19). 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. However, some wastewater in 14 agglomerations is treated in individual systems potentially inappropriate for environmental protection (EC, 2019). National and municipal regulations set the minimum frequency for emptying on-site sanitation systems, as well as procedures for monitoring decentralised sewerage systems and wastewater collectors. Latvia needs to ensure that independent wastewater treatment systems comply with environmental regulations.
Figure 1.19. Most of the population has access to advanced wastewater treatment
There is limited wastewater reuse (EC, 2017c), as water resources are abundant. Production of sludge from urban wastewater treatment plants has grown since 2008, but its use is limited in forestry and agriculture. About half the sludge produced is disposed of in temporary storage sites, and new and improved plants mean larger quantities to manage. The cost-effectiveness of options for sludge reuse or disposal, in light of the socio‑economic and environmental impact, remains to be assessed. The problem of treatment and safe disposal of sewage sludge is an issue in many countries. In Korea, for example, sludge is recycled into solid fuel and sold to thermal power plants (OECD, 2017).
Despite improvement, investment needs in the water sector remain high. Access to safe water and sanitation remains an issue in rural areas. Nearly a quarter of the population is not connected to public water supply. Water service infrastructure is ageing and in generally poor condition. Wastewater collection and water supply systems suffer frequent leaks, infiltration and ruptures. In 2015, water utilities of agglomerations with more than 2 000 inhabitants estimated that over EUR 200 million was needed to renovate and rebuild urban wastewater systems (OECD, 2018b).
Municipalities are in charge of providing water services through municipally owned utilities, but they face significant financial constraints. Water tariffs are set by the state (through the Public Utility Commission) for large wastewater treatment and water supply systems and by local governments for smaller ones. Tariffs are set to cover water utility costs and allow for a profit margin. However, income from tariffs is not sufficient to cover investment costs and ensure a good-quality and sustainable functioning of the water systems in the long term (OECD, 2018b). Affordability issues, especially in rural areas, limit the ability to increase tariffs. Public investment in water infrastructure has heavily relied so far on EU transfers, which are expected to decline over time (Chapter 3). There is a need to complement EU funds with national public and private investment to upgrade wastewater treatment and water supply infrastructure.
Recommendations on climate, air and water management
Mitigating climate change and adapting to its impact
Ensure that any new climate mitigation strategy is consistent with a cost-effective pathway towards being a net zero GHG emission country by 2050; guide this transition with a plan that identifies the expected contribution of each economic sector to domestic emission mitigation and lays out gradually stricter targets.
Improve the knowledge base on available mitigation options, especially in the agriculture and forestry sectors, along with their costs and trade-offs, building on sound socio-economic and environmental indicators; assess and quantify the climate mitigation and environmental benefits and impact of using domestically produced biofuels, comparing them with those of other energy sources.
Adopt the draft national plan for climate change adaptation to 2030 and monitor its implementation; ensure compliance with the legislative requirement of considering climate change impact and resilience in EIA procedures; assist municipalities in integrating climate change adaptation in their land-use and development plans.
Improving air quality
Improve and extend the air quality monitoring network; promote adoption of best available techniques in the household, transport, industry and energy sectors and thoroughly enforce compliance with emission standards; integrate air quality objectives and measures in climate, energy, transport, agriculture and tax policies and plans, with a view to reducing emissions from PM2.5, NOX and ammonia.
Strengthen implementation of the current air quality action programme in the Riga metropolitan area to reduce emissions from vehicles, industrial facilities and households; update the programme to introduce additional measures for the post-2020 period; consider establishing low-emission zones while ensuring adequate public transport services.
Ensuring good water quality and services
Improve monitoring and evaluation of the quality of water bodies; identify environmental pressures and possible risks.
Reduce diffuse water pollution from agriculture through a combination of measures: regulatory (e.g. technology, performance standards), economic (e.g. taxes on fertilisers and pesticides) and voluntary (e.g. awareness-raising initiatives, training).
Complement EU funds with national public and private investment to upgrade wastewater treatment and water supply infrastructure; ensure that independent wastewater treatment systems comply with environmental regulations; improve small-scale water supply systems (e.g. wells) to extend access to good quality drinking water.
Undertake a feasibility study to assess cost-effectiveness of alternative sludge reuse or disposal options and prepare to implement the best solution.
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Notes
← 1. Latvia’s energy independence (production divided by total primary energy supply) increased from 41% in 2005 to 55% in 2017, but this level is still below the OECD average of 78%.
← 2. By comparison, heat consumption per square metre was 11.9 kgoe in Denmark, 15.3 kgoe in Estonia, 12.3 kgoe in Finland, 11.3 kgoe in Lithuania and 9 kgoe in Sweden (Odyssee-Mure, 2019).
← 3. Denmark, Estonia, Finland, Norway and Sweden all had shares below 3% in 2017.
← 4. Latvia ratified the Paris Agreement in 2017.
← 5. The six vulnerable sectors are biodiversity and ecosystem services; forestry and agriculture; tourism and landscape planning; health and welfare; building and infrastructure planning; and civil protection and emergency planning.
← 6. Indicators on mortality and welfare costs from exposure to air pollution use the mortality estimates produced as part of the Global Burden of Disease 2017 project (https://vizhub.healthdata.org/gbd-compare). The welfare costs are calculated using a methodology adapted from OECD (2017), The Rising Cost of Ambient Air Pollution thus far in the 21st Century: Results from the BRIICS and the OECD Countries.
← 7. The growing stock is the volume of all living trees in a given area of forest or wooded land that have more than a certain diameter at breast height.
← 8. The main EU water-related directives are the Water Framework Directive (2000/60/EC), Drinking Water Directive (98/83/EC), Bathing Water Directive (2006/7/EC), Urban Waste Water Directive (91/271/EEC), Floods Directive (2007/60/EC), Nitrates Directive (91/676/EEC), Marine Strategy Framework Directive (2008/56/EC) and Ground Water Directive (2006/118/EC).
← 9. “Ecological status and potential” is an assessment of the quality of the structure and functioning of surface water ecosystems, including rivers, lakes, transitional waters and coastal waters. It shows the influence of both pollution and habitat degradation. Ecological status is based on biological quality elements and supporting physico-chemical and hydromorphological quality elements.
← 10. Good chemical status means no concentrations of priority substances exceed the relevant Environmental Quality Standards established in the related Directive 2008/105/EC.
← 11. More than half of drinking water comes from groundwater (60%), 19% from surface water and 19% from artificially recharged groundwater.