The Republic of Costa Rica
Avantha Arachchi & Sage Dalton
Emissions Trading
High Technology High School
Costa Rica is a small, middle-income Central American country that has high levels of
biodiversity. Costa Rica is seen as a leader in environmental issues and has implemented several
programs involving emission trading.
Costa Rica is a supporter of many international treaties and agreements regarding emissions and
other environmental issues. Most significantly, Costa Rica has signed and ratified the Kyoto
Protocol.1 Costa Rica is also a party to the U.N. Convention on Biological Diversity, the
Convention on the International Trade in Endangered Species of Wild Flora and Fauna, the U.N.
Framework Convention on Climate Change, and the Montreal Protocol on Substances that
Deplete the Ozone Layer. 2
Costa Rica has established several successful emission trading programs. Most notably, Costa
Rica has implemented a carbon commodity program that provides funds for reforestation and
forest protection on private lands though the sale of carbon certificates to industrialized
countries. In this program, Costa Rica pays private land owners to protect and manage forests by
using selective harvesting and establishing plantations on their lands. These abatement programs
are worth Carbon Tradable Offsets (CTOs). Costa Rica sells CTOs to other countries, especially
Norway, who can use these Carbon offsets against their Kyoto Protocol agreements under the
Clean Development Mechanism established by the Kyoto Protocol. 3
Costa Rica is also a member of a coalition of tropical developing countries that proposed a
“rainforest conservation for emissions” agreement at the UN summit on climate change in
Montreal in 2005. 4 This agreement allows developing nations to sell carbon credits to wealthy
nations for the actions they take to conserve their rainforests. Because deforestation accounts for
20-25% of greenhouse gas emissions, this program aims to slow climate change by giving
developing nations a financial incentive to protect their tropical rainforests. 5
Environmental issues are of great concern to Costa Rica because although it is now an
environmental leader, it once had one of the highest deforestation rates in Latin America.
Through ambitious programs, it decreased its deforestation rate from 85% in the 1940s to 35%
today. Two-thirds of Costa-Rica’s forests are now protected. 4 Costa Rica plans to continue to
take major strides with regards to environmental issues. Specifically, Costa Rica plans to reduce
its net greenhouse gas emissions to zero by 2030 and be the first country to offset all of its
carbon. 6 This goal sets Costa Rica apart as a country with a real commitment towards
environmental issues. Costa Rican president Oscar Arias says on Costa Rica’s environmental
goals, "we do this with the hope that, eventually, we will be able to show the world that what
ultimately needs to be done, can be done." 7
Costa Rica plans to reduce it’s own emissions and work with other countries to mitigate climate
change through a five-step program. With regards to emission trading, Costa Rica hopes to
enhance carbon sink programs through reforestation and natural forest regenerations. Also, Costa
Rica supports the establishment of a metrics system that is accurate, reliable, and verifiable, with
built in mechanisms for monitoring. In addition, Costa Rica advocates the development of
carbon markets at the local and international levels. 7 Costa Rica would also like to see its carbon
commodity program established on an international scale. Proposals for international emission
trading have been opposed by developing countries because they feel they could not sell
emission permits at a reasonable price. However, Costa Rican officials feel that their CTO plan
solves this problem. Under the CTO plan there is a minimum price set at 10 dollars per ton of
carbon and the selling country is in control of sales and implementation. 3
Costa Rica also suggests the establishment of an international advisory committee (possibly a
subcommittee of the World Trade Organization) that would permanently monitor the trading of
emissions and would award appropriate carbon credits. This organization would prevent such
problems as countries emitting more than their credits allow and the purchase of worthless
credits that don’t result in emission reduction, which have hindered the advancement of carbon
markets. An additional function of this committee would be to “buy back” excess credits from
countries to encourage nations to decrease emissions as much as possible.
Costa Rica is a world leader with regards to emissions trading and other environmental issues. It
sees sustainable development and environmental protection as a high priority and is supportive
of international cooperation to expand and improve carbon markets and to establish other trading
programs to mitigate climate change.
1. “Kyoto Protocol Status of Ratification.” 2006. 28 October 2007.
<unfccc.int/files/essential_background/kyoto_protocol/application/pdf/kpstats.pdf>.
2. Veillette, Connie. “Costa Rica: Background and U.S. Relations.” CRS Report for Congress. 2005. CRS Web. 28
October 2007. <fas.org/sgp/crs/row/RS21943.pdf>.
3. Subak, Susan. “The Case of Costa Rica’s “Carbon Commodity.”” Forest Trends Workshop: New Market
Mechanisms for Managing Forests. 1999. National Resources Defense Council. <www.foresttrends.org/documents/misc/CarbonCommodity.pdf>.
4. “Costa Rica: Environmental Profile.” 2006. Mongabay.com. 28 October 2007.
<http://rainforests.mongabay.com/20costarica.htm>.
5. Butler, Rhett A. “UN agrees to "rainforest conservation for emissions" deal.” 2005. Mongabay.com 28 October
2007. <http://news.mongabay.com/2005/1211-forests.html>.
6. Reuters, John McPhaul. “Costa Rica aims to win “carbon neutral” nation race.” USA Today. 2007. Reuters. 28
October 2007. <http://www.usatoday.com/weather/climate/globalwarming/2007-05-24-costa-rica_N.htm>.
7. Mora, Roberto Dobles. “Costa Rica’s Commitment on the Path to becoming Carbon-Neutral.” UN Chronicle
Online Edition. 28 October 2007. <http://www.un.org/Pubs/chronicle/2007/issue2/0207p42.htm>.