Costa Rica is a hub for ecotourism and attracts visitors from around the world interested in exploring its lush jungles and diverse wildlife. However, in the 1980s, Costa Rica had one of the highest deforestation rates in the world. In response to those issues, in 1996, Costa Rica established the Payments for Environmental Services (PES) programme.
The PES programme is a financial mechanism promoting forest ecosystem conservation and preventing land degradation. It is the first scheme of its type in the country and the region. The programme pays landowners about $60 per 2.5 acres annually for four environmental services associated with conserving the forest: water sources, scenic beauty, biodiversity, and carbon capture. Currently, the programme enrols over 680,000 acres.
Despite this success, the country faces a new challenge. The PES programme, paying landowners for not cutting down trees for the past 25 years, depends almost entirely on fuel-tax revenue. However, with Costa Rica striving towards achieving net-zero emissions by 2050, the revenue from fuel taxes is expected to decline. This has led the government to search for alternative funding options to sustain its reforestation efforts. One proposed solution is to introduce new taxes or adjust the existing ones.
Tourism in Costa Rica has grown tremendously over the years, and agriculture's share of the economy has decreased from 25% in 1982 to 4.2% in 2019. Meanwhile, visits to protected natural areas have increased from about 500,000 in 1990 to over 1.7 million in 2019. With this rapid growth in tourists’ interest in protected natural areas, one way Costa Rica might fund the PES programme is by adding a small amount of nature taxes on hotel bills to support forest conservation efforts.
Another solution is to put pressure on developed countries, the world's biggest polluters, to compensate countries like Costa Rica that are making significant efforts to store carbon. In 2021, Costa Rica's reforestation efforts were significantly boosted when the World Bank granted the country $16.4 million for forests that reduce carbon emissions.
The PES programme is expected to bring in a total of $60 million by the end of 2025, which Costa Rica hopes will double the number of protected forests. This money is an essential step towards preserving valuable forests and should be a shared responsibility of the international community.
Costa Rica's reforestation efforts have come a long way, and it is vital to ensure that they continue. The World Bank's grant is a crucial step towards achieving this goal, but more needs to be done. Finding additional funding that covers other environmental services beyond carbon is essential. It is also crucial for developed countries to take responsibility for the damage caused by their pollution and compensate countries like Costa Rica, striving towards a greener future.
Costa Rica is an extraordinary example of how consistent nature restoration can bring a tangible impact. Every step and effort toward nature conservation can bring much-needed positive change to nature and natural habitats. At DGB Group, we offer different ways for businesses, investors, and individuals to contribute to nature.
