Costa Rican President Laura Chinchilla signed a decree on Tuesday morning announcing the first carbon market in the developing world. The market is the latest effort to bring the country toward its goal of becoming carbon-neutral by 2021.
The Costa Rican Voluntary Domestic Carbon Market, or MDVCCR, aims to establish guidelines for the generation, issuance and exchange of carbon credits, called Costa Rican Compensation Units (UCC) from projects or activities originating in Costa Rica.
Under the cap-and-trade scheme, companies will trade UCCs for the right to release carbon dioxide into the air to compensate for any emissions that cannot be reduced, according to a statement from the Casa Presidencial.
The UCCs are tied to reforestation and conservation efforts that capture and sequester carbon dioxide, along with projects designed to reduce emissions and improve energy efficiency.
The Department of Climate Change will oversee the market’s administration, registration of projects and other technical needs.
The carbon market is domestic and not currently open to foreign traders.
The newspaper El Financiero reported Tuesday that the first trades could begin toward the end of 2014.