PES Program Highlights

Costa Rica, itself a founder of the United Nations Framework Convention on Climate Change (UNFCCC), has been a leader in establishing and defining a category of environmental services, well ahead of other global efforts such as the Kyoto Protocol.  Costa Rican citizens have taken bold action to protect their natural heritage.  Theirs was the first tropical nation where a network of government and non-government organizations joined forces to establish twenty-eight  national parks and reserves, creating a comprehensive national park system in this tiny country.

Extraordinary for a developing country, Costa Rica has created a self-financed system of fees imposed primarily on fossil fuels that help support payments to farmers and landowners for preserving forests. While providing these locally valuable services, these protected forests also preserve the country’s incomparable and priceless biodiversity and also trap vast amounts of carbon - far more than Costa Rica itself pumps into the planetary atmosphere.

Such “carbon sequestration” is yet another environmental service, in this case, most valuable to those internationally who produce more carbon than they can sequester themselves.  The burgeoning international exchange system whereby foreign buyers might pay tropical countries for forest carbon sequestration is assuring an economic motive for preserving and replanting forest-lands while providing an environmental service with global impact. While the international system for such carbon emission trading credits is still in its infancy, with issues of valuation and verification still unresolved in most tropical areas, Costa Rica’s pioneering role in the market, stable government, scientific sophistication and domestic experience have established a reliable system of administration, guarantee and enforcement for these credits.  This system, the National Fund for Forestry Finance, whose Spanish acronym is FONAFIFO, was established twenty years ago under Costa Rica’s forestry reforms and during that period has been responsible for the preservation and reforestration of almost a quarter of Costa Rica’s land area.  It’s ground-breaking Payment for Environmental Services (PES) program has been in full operation for the last ten years and is widely recognized as being single-handedly responsible for this unparalleled success.  Foreign institutions, primarily European power utilities and some governments, have already purchased carbon offsets from Costa Rica.

FONAFIFO’s PES program is so successful and so well received that there is a long waiting list of Costa Rican landowners willing to participate.  Costa Rica’s own limited domestic resources derived from its self-imposed carbon tax have so far prevented the program’s further expansion.  At the suggestion of the Pax Natura Foundation, FONAFIFO is now looking to “export” this valuable carbon sequestration service, the earnings from which will allow the PES program to expand to meet its potential for both the nation and the world.

The PES program is credited with stopping the destruction of the Costa Rican rain forest and

Re-capturing 26% of the country’s land-mass to forest cover from 1987 to 2000. To date the program has benefited over 7,000 small to medium scale private land owners for the environmental services their property provides for watershed protection, scenic beauty, biodiversity conservation, and carbon sequestration. In essence, the program recognizes the economic and spiritual value of forests in tack versus forests cleared for cattle pasture or other purposes.

The PES Program Goals

*          Mitigation of greenhouse gas

emissions (carbon reduction, absorption, fixation and storage)

*          Protection of water for rural and urban use

*          Protection of biodiversity, ecosystems and life forms

*          Protection of scenic beauty

PES Funding Sources

*          Carbon tax on oil imports

*          Watershed tax on consumption

*          Voluntary purchase of CO2 offsets

PES Project Scope

*          Prevent emissions of approximately 500,000 metric tons of carbon (equivalent to 1,935,000 metric tons of carbon dioxide (CO2) ) on 24,000 hectares near Guapiles, Costa Rica

*          Preserve 12,000 hectares of biodiversity, watershed, scenic beauty and carbon sequestration in the Conservation Area of the Central Volcanic Mountain Range of Costa Rica

*          With ongoing monitoring provided by FONAFIFA (National Fund for Forestry Finance), which oversees the PES program, create certified carbon emission trading credits for avoided deforestation of tropical rainforests.

*          Document a model of sustainable economic development and equity for developing nations

*          Facilitate international cooperation for preserving forests

*          Restore the balance of natural laws, the government of nature