Carbon offsets are voluntary donations made by individuals, companies, or governments that compensate, or offset, greenhouse gas emissions from transportation, electricity use, and other sources. In an effort to promote sustainable development and tourism, the Costa Rican Ministry of Environmental Affairs has created a program in which tourists can compensate the carbon emissions caused by their international flights by investing in programs that preserve and reforest natural areas within Costa Rica.

If you would like to calculate and offset the emissions caused by your flight to Costa Rica, visit here.

What is a “Carbon Market”?
 
The carbon market is a growing industry where countries, individuals, or businesses can trade "carbon credits" for mandatory or voluntary purposes. 

The 1997 Kyoto Protocol imposes caps on greenhouse gas emissions in most developed countries, but allows the countries to meet their commitments through an arrangement known as the CDM (Clean Development Mechanism).  Under the CDM, countries can meet commitments through the sponsoring of emission reduction projects in developing countries. These projects generate “carbon credits,” which can then be traded in markets such as the European Climate Exchange. 

A secondary, "voluntary" market exists where private businesses and individuals can buy and sell carbon credits for non-compliance reasons.  Businesses may be interested in carbon markets for corporate sustainability reasons, green marketing initiatives, or as trial runs in anticipation of future emission reduction requirements. Merril Lynch, for example, invested $9m in a deforestation project in Indonesia earlier in 2008. 

The voluntary market operates through registries like the Chicago Climate Exchange, and non-governmental organizations like Carbonfund, The National Carbon Offset Coalition, and Powertree. Other groups cater to individuals wanting to offset "personal emissions," including TerraPass. 

Carbon Markets in Costa Rica 

In Costa Rica, five current projects are generating tradable carbon credits through the Clean Development Mechanism. These include hydro power, wind power, landfill gas, and waste projects. 

Unfortunately, projects that reduce greenhouse gas emissions from deforestation cannot be used under the CDM, and reforestation/afforestation projects are costly and burdensome for developing countries. There are not any CDM-affiliated afforestation or reforestation projects in Latin America. 

Costa Rica's forests have, however, created carbon credits in the voluntary markets. In fact, the first forestry offset project recorded on the Chicago Climate Exchange was one involving the reforestation of pasture land in Costa Rica, led by the Precious Woods Group. 

The CCBA (Climate, Community, and Biodiversity Alliance), a partnership between research institutions, corporations, and environmental groups, has facilitated voluntary projects in Costa Rica, as well as in Brazil, Nicaragua, and Panama. Recently, the CCBA has approved a program that will make approximately 1,935,000 metric tons of carbon emission reductions available for trading, through the avoided deforestation of rainforests in the Central Volcanic Mountain Range in Costa Rica. 

Costa Rica's future presence in the carbon market will depend on whether the successor to the Kyoto Protocol includes reduced emissions through deforestation projects (also known as REDD projects). These projects, although excluded from the Kyoto Protocol, are becoming increasingly more important: deforestation is responsible for 22% of carbon emissions.  Additionally, they may be easier to administer in developing countries than reforestation/afforestation projects.