Costa Rica's Payment for Ecosystem Services

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Costa Rica's Payment for Ecosystem Services (PES) programme is a pioneering initiative that provides financial incentives to landowners for conservation and reforestation efforts. Established by the 1996 Forestry Law, it focuses on four key ecosystem services: carbon sequestration, biodiversity protection, water regulation, and landscape beauty. The programme offers five-year contracts for activities like forest protection, reforestation, sustainable forest management, and agroforestry, benefiting over 8,000 landowners by providing additional income. Managed by FONAFIFO, the programme is funded through a combination of government allocations, private donations, and a tax on fossil fuels. It has significantly reduced deforestation and increased forest cover, promoting environmental sustainability while supporting local communities. The PES model is widely studied and has inspired similar schemes globally, highlighting its effectiveness in balancing economic and environmental goals.