Deforestation and climate change are closely interlinked. Indeed, forest lossaccounts for approximately one fifth of global greenhouse gas emissions.In response to this situation, the international community is envisioning the creationof a mechanism –called REDD– that would provide financial compensation for countries to avoid deforestation. This system would involve channelling money fromthe global carbon financing sector to individual forest users with the purpose of making forest conservation more profitable than contending non-forest uses.The objective of this project is to assess Costa Rica’s prospects in becoming animportant destination of financial incentives generated by REDD. The relevantcharacteristics of the country are thus measured against the main factors that willdetermine the country’s participation in the mechanism.The results of the investigation show that Costa Rica’s forestry evolution positions itin an unfavourable situation with regards to essential
. It appears thatthe next climate change mitigation agreement would predominantly channelfinancial incentives to deforesting countries, a group in which Costa Rica does nottake part due to its successful conservation policies and actions.Nevertheless, there is still room for the country to have a significant participation inREDD. If the mechanism embraces countries that are currently enhancing their carbon stocks –rather than depleting them through deforestation– Costa Rica is in agood position to benefit from the synergies of forest conservation and market-basedinstruments.