1. Overhead 1 Metodología para calculo de líneas base y mitigación. Dr. René Castro

2. Cost of TM of Carbon

3. Fuel Mix Switching

4. Overhead 4 The Costa Rican Dilemma Prepared by René Castro (castro_rene@post.harvard.edu) and Sarah Cordero (corderos@MIT.EDU) PEMEX November 1999 This presentation uses data from a research work in progress supported by the UNDP regional office for Latin America.

5. Overhead 5 Abstract Since 1987, successive Costa Rican governments developed market instruments to attract capital investments for forests and biodiversity conservation. This situation allowed the establishment of mechanisms to use those funds to compensate local farmers for some of the environmental services provided by their land. For example, by 1996 the first $2 million contract between Costa Rica and Norway for traded CTOs was signed under the United Nations Framework Convention on Climate Change (UNFCCC) Without delay, Mr. Tattembach, Costa Rican Ambassador to the UNFCCC, and Mr. Gorbitz, general manager of OCIC (Costa Rican Office of Joint Implementation) should assess the Joint Implementation pilot phase including recommending a price for the first 1 million tons of certified carbon, coming from the Protected Areas Project (PAP). Their recommendation should consider the implications of the new trading mechanisms for Costa Rica's potential foreign exchange earnings during the next decades.

6. Overhead 6 UNFCCC Time Line Ref: Castro and Cordero, Forthcoming

7. Overhead 7 Kyoto Targets and Forecast Emissions, Relative to 1990 Ref: Jacoby and Prinn, MIT, 1999.

8. Overhead 8 CO2 Emissions per Capita vs. GDP per capita Selected Latin America and OECD Countries Ref: Castro and Tattembach, 1998

9. Overhead 9 Recipients of Wildland Benefits in Costa Rica, 1998

10. Overhead 10 Forestry Environmental Services Payment Scheme

11. Overhead 11 Payments to landowners for the four environmental services named in the Forestry Law of 1996. (in $US per hectare) Ref: Castro and Tattembach, 1998

12. Overhead 12 Land Use in Costa Rica, 1998 Ref: Castro Salazar, 1999

13. Overhead 13 Hectares Consolidated in Each Protected Area Using Various Price Scenarios

14. Overhead 14 Marginal Cost of Carbon in Costa Rica According to Different Perspectives Ref: Castro Salazar, 1999.

15. Overhead 15 Normalized Analysis of Carbon Cost of Regions in the US and Costa Rica Ref: Castro Salazar, 1999

16. Overhead 16 Comparison of the Marginal Cost of Carbon Between Nine European Countries (US$) Ref: CEC, 1991

17. Overhead 17 Carbon Tax Required to Stabilize Emissions at the 1990 level Ref: Rosenthal et al. 1993.

18. Overhead 18 Discussion To help the Costa Rican team solve this dilemma: to sell or not to sell, come prepare to answer the following questions: Should OCIC's team recommend an additional marketing effort before the new phase of the year 2000? Should Costa Rica wait for the full definition of the CDM? Should Mr. Gorbits as a general manager develop the additional $500,000 received from the WB in more projects, in marketing efforts or in the on-going negotiation and the COP V? Should the Costa Rican government set a minimum price for a ton of carbon?