Costa Rica

Country Information

Important Dates

MRP first draft submission: 
October 2012
Allocation of Implementation Funding: 
March 2013

Key Documents & Presentations

Most Recent
Document Language Date
Costa Rica: Summary of the INDC Process English June 2015
Market Readiness Proposal
Document Language Date
Costa Rica: Final Market Readiness Proposal (MRP) English March 2013
Costa Rica: Final Market Readiness Proposal (MRP) Presentation English March 2013

Market-based Approach

The PMR will support Costa Rica to

  • Design a domestic carbon market;
  • Build capacity for GHG data reporting and registry;
  • Strengthen domestic demand for emission reduction units; and
  • Consolidate supply of emission units across a range of sectors.

Crediting and Offsetting

Costa Rica designed a financial instrument for placing greenhouse gas offsets in the international marketplace, called the Certifiable Tradable Offset, or CTO. A CTO represents a specific number of units of greenhouse gas emissions expressed in carbon equivalent units reduced or sequestered. The home-country verification process certifies that the offsets are of a sufficiently high quality so as to allow them to count against national and company-level GHG reduction commitments, if such crediting were eventually permitted under the UNFCCC.

Costa Rica's goal for CTOs is to trade them in a manner similar to the United States market for sulphur oxides (SOx). Conversations were held with Natsource Energy Brokers and The Centre for Financial Products, an active participant in the development of SOx, but the idea proved to be early for its time.

Costa Rican Compensation Unit (UCC) is a carbon offset class. It represents emissions that were avoided, reduced, removed, and stored and that have been monitored, reported and verified. UCC must be registered with the official entity that will manage the registry system and is tradable within the Costa Rican domestic market.

National Context

Mitigation Target

Costa Rica aspires to reach carbon neutrality by 2021, a pledge held since 2007. This commitment is incorporated into the 2011-2014 National Development Plan (NDP), the country´s highest-level statement on public policy, and the National Climate Change Strategy (NCCS), a long-term strategy for sustainable development that seeks to align the country’s low carbon growth and eco-competitiveness strategies.

Costa Rica's energy sector contributes 46% of its emissions while the agricultural sector (primarily livestock) adds an additional 37%. Waste management and industrial processes jointly add close to 16%. In addition to forest conservation, Costa Rica targets the following areas for mitigation: power generation, agriculture and livestock, solid waste management, transport, and sustainable building sectors. (Data based on 2005 National GHG Inventory.)

Costa Rica, through the NCCS, intends to establish a Domestic Carbon Market as the primary policy tool to achieve Carbon Neutrality. It is designed to assist Costa Rica to meet its target in the most flexible and cost-effective way, while also providing a financial incentive to the private sector for investment in low emissions technology research, development and commercialization, and to develop the country’s eco-competitive strategies.

Regulatory Framework

The Ministry of Environment and Energy (MINAE) is in charge of implementing the Strategy at the national level, mainly through its Directorate of Climate Change (DCC). The DCC was mandated by Decree No. 35669-MINAET, January 6, 2010. The Decree establishes the context for policy-making within the National Climate Change Program, explicitly through the creation of new capacities and the integration of a platform for knowledge exchange in climate change mitigation and adaptation. The DCC is finalizing NCCS´s Action Plan, which is envisioned as a reference point for policy design and implementation, while strengthening education and public awareness processes.

Other entities directly related to implementation of the country’s climate change agenda are the Costa Rican Office for Joint Implementation (OCIC) which was established in April 1996, National Forestry Financing Fund (FONAFIFO), the National System of Conservation Areas (SINAC), the Office for Environmental Quality Management (DIGECA) and the National Environmental Technical Secretariat.

News

Costa Rica takes a leadership role in Carbon Neutrality in the world.

Environment Ministry officials made public the first phase of Costa Rica’s carbon-neutral strategy.

Disclaimer: The World Bank does not guarantee the comprehensiveness and accuracy of the data and information included in the Market Readiness Proposal (MRP) and in presentations submitted by PMR participants. Further, the World Bank accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in the MRPs or on this website do not imply on the part of the World Bank any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries.