Module 5 Short Answer: Information on Carbon Markets
1. Is there a C market that serves the place that you live? The place where you grew up?
Which one(s)? Is it a compliance market or a voluntary market?
Yes, there is a C market in Costa Rica, Voluntary Domestic Carbon Market of Costa Rica (Mercado
Doméstico Voluntario de Carbono de Costa Rica - MDVCCR. The market is voluntary. According to
(Salgado, Dumas, Feoli, & Cedeño, 2013), a voluntary domestic carbon market is defined as a
voluntary participation mechanism that establishes the guidelines for generating, issuing, and
trading carbon credits from projects or activities, defined by the mechanism and located in the
territory defined by the legislation, in order to achieve a specific greenhouse gas emission
reduction target cost-effectively within the domestic system.
The MDVCCR is a voluntary mechanism that will contribute to achieving the country’s carbon
neutrality, through carbon credit generation and trading, defined as Costa Rican Offset Units
(UCC: Unidad Costarricenses de Compensación). A UCC is understood as the equivalent of one
ton of CO2 from projects, programs, or activities that avoid or reduce emissions and/or remove
and/or store greenhouse gases. UCCs are national, registered with the competent official entity,
monitorable, verifiable and reportable, verifiable and reportable, through which Costa Rican
organizations can offset their emissions.
2. Is there any indication of how large this market is? Which emissions are covered?
The MDVCCR will issue only UCC and not greenhouse gas emission allowances, which are mostly
linked to markets with emission limits and trading systems (Cap and Trade).
Being a voluntary mechanism, the MDVCCR is open to the participation of all those individuals or
organizations interested in generating, buying, or trading UCC. Although the MDVCCR is a
domestic market, the possibility that UCC can be purchased by foreign entities that trust in the
environmental integrity of the System is not ruled out. Considering the evolution of the global
climate regime, the design of the MDVCCR should also consider the possibility of interacting with
other domestic or regional markets in the future.
The market covers CO2 emissions.
3. What is the current price of C on this market?
The current price of a UCC is $7.5, which I considered is a low price, in addition that participation
is voluntary. The carbon credits (UCC) can be bought via National Fund for Financing Forestry
(FONAFIFO). FONAFIFO is a public entity founded in 1996, which pays landowners to maintain
forests and reforest cleared areas (Zúñiga, 2020).
Recently, the Government of Costa Rica is encouraging tourists that visit the country to purchase
carbon offsets (of their air travel) that will directly fund FONAFIFO, which in turn aids landowners
who conserve or protect nature.
Works Cited
Salgado, L., Dumas, M., Feoli, M., & Cedeño, M. (2013). Mercado Doméstico Voluntario de
Carbono de Costa Rica. San Jose: MINAE.
Zúñiga, A. (2020, October 29). Costa Rica bets on carbon offsets to conserve environment,
support eco-tourism. Retrieved from The Tico Time:
https://ticotimes.net/2020/10/29/costa-rica-bets-on-carbon-offsets-to-conserveenvironment-support-eco-tourism