We were very fortunate to have a presentation by Carlos Manuel Rodriguez, Conservation International’s Regional Vice President and Conservation Biodiversity Center Regional Director for Mexico and Central America. He previously served as Minister of the Environment of Costa Rica, where he built upon Costa Rica’s strong conservation history through the introduction of a system of Payments for Ecosystem Services (PES).
By identifying and determining economic value for standing forests local communities receive economic incentives to act as stewards of nature’s bounty, providing an attractive alternative to selling the natural resources for short-term gain. The groundbreaking strategy has helped Costa Rica conserve ecosystems that would likely have been pillaged for resources. This system has allowed the country to become one of Central America’s strongest economies.
Between the 1940s and 1980s, most of Costa Rica’s forests were destroyed and replaced with cattle farms and croplands. The government encouraged agriculture and ranching and to further promote this, the Costa Rican congress passed a law taxing “unproductive” land, eliminating any remaining incentive to retain forest. In just over four decades, rampant deforestation stripped Costa Rica of 80 percent of its forest cover. After losing so much forest, Costa Rica finally made deforestation illegal in 1992. According to Mr. Rodríguez, the government sought innovative ways to enforce the law without using armed guards to protect the forests. Instead, the government instituted income tax exemptions for people who planted trees. Furthermore, the government decided people should be compensated for the environmental services provided by their land, including ensuring water resources and mitigating greenhouse gases.
Results from the environmental services program were quickly evident: In the first five years “we went from 21 percent forest to 42 percent with this program,” Mr. Rodríguez said. In 2000, the forest cover grew to 45 percent; and early data for 2005 shows 52 percent forest cover, he noted. Beyond achieving its environmental goals, the program also resulted in great social gains, largely poverty alleviation. “We’ve realizing that indigenous communities are the biggest beneficiaries of environmental service payments,” he said. Between 2000 and 2004, indigenous participation rose more than 100 percent and female farm ownership grew eight-fold.
Branching out from the successful payment-for-service program, the government decided to also charge for usage of environmental services. The resulting revenue has be pumped back into the environment to sustain the environmental services program. A 1.5 percent fossil fuels tax generates between $10-15 million per year.
Mr. Rodríguez said he faced no major opposition to that tax, but he knew that proposing a tax on water would be harder. “There’s a lot of water in Costa Rica. There isn’t a real value to it because it’s a free resource. And I was going to increase 2000 percent the water access fees.” With presidential support, however, he was able to push the tax through. “Now, every user will pay the ecological cost of water,” he said.
While the current system has created a successful give-and-take between services payment and usage taxation, the next step would be to expand taxation to those who benefit from the country’s biodiversity. Mr. Rodríguez specifically targeted one industry: eco-tourism, a major factor in Costa Rica’s GDP. “The owner of a bus, lodge, airplane, taxi—there are a lot of people who work around the eco-tourism industry who depend on beautiful land,” he said. Tourists come from around the world to marvel at Costa Rica’s wildlife, plant life, and other natural resources. To preserve these resources, Mr. Rodríguez has expanded payment of environmental services to biodiversity conservation, with specific payment for preservation of rare animals like jaguars.
After the presentation Duke Students and Mr. and Mrs. Rodriguez joined us for dinner and wine at a unique Asian restaurant where we swapped stories and asked more questions. Mr. Rodriguez told us that Costa Rica was originally the poorest of the Spanish colonies, with no gold or minerals. With little to cause internal or external conflict, the country has existed peacefully, fighting no wars in its 180-year history. According to Mr. Rodríguez, political stability has allowed long-term plans to continue, rather than change with each new administration. “Consistency has worked,” he said. Costa Rica is certainly blessed with many natural wonders and we have been blessed to have the opportunity to see some of them.