In recent decades, Costa Rica has undergone a significant transformation in forest management. In 1987, only 21% of the country was covered by forests, but today, that figure has considerably increased to approximately 51%. This shift is largely due to ambitious environmental policies, particularly the adoption of the Payment for Environmental Services (PES) program in 1997.
When ecology becomes politics
Costa Rica, a small country of 51,100 km², is now considered one of the world’s most ecological nations. Why? Because its government has made environmental protection a national priority.
Between 1970 and 2000, Costa Rica lost more than half of its forests. Faced with this crisis, the country’s leadership took action. Three presidents played a crucial role in making Costa Rica a global leader in conservation: Óscar Arias Sánchez (president from 1986 to 1990 and again from 2006 to 2010), José María Figueres Olsen (president from 1994 to 1998), and Carlos Alvarado Quesada (president from 2018 to 2022).
Óscar Arias Sánchez
During his first term, he implemented measures to protect the country’s remaining biodiversity, which by 1987 covered only 21% of the national territory. He declared 1988 as the year of natural resources, conservation, and environmental protection, and promoted investment in renewable energy—hydroelectric, wind, and solar power. In 2010, he committed Costa Rica to achieving carbon neutrality by 2021 (a goal that has since been postponed but remains in progress).
However, his most notable achievement was the creation of SINAC (Sistema Nacional de Áreas de Conservación) in 1989. This system merged multiple environmental institutions into a single entity, ensuring integrated management of national parks and natural reserves.
Despite winning the Nobel Peace Prize in 1987, Óscar Arias Sánchez remains a controversial political figure. He repeatedly attempted to amend the Constitution to remove the ban on former presidents running for office again. In 2003, he succeeded and ran for the 2006 presidential election, a move that former president Luis Alberto Monge denounced as a “coup d’état.”
José María Figueres Olsen
In 1997, he launched the Payment for Environmental Services (PES) program and established FONAFIFO1, the agency responsible for its funding. His government recognized the importance of forests and biodiversity for the country’s economic and ecological future and created this program to encourage landowners2 to protect and restore forest ecosystems.
He also strengthened SINAC, initially established by his predecessor, by consolidating different organizations into a single entity for more efficient forest management.
Additionally, the 1996 Forest Law No. 75753 marked a historical turning point. It completely banned deforestation of primary forests4 and reinforced sanctions against illegal logging.
This law, along with PES, helped reverse deforestation trends, allowing Costa Rica’s forest coverage to increase from 21% in 1987 to over 50% today.
Carlos Alvarado Quesada
Continuing the country’s ecological policies, he imposed the 2018-2050 National Decarbonization Plan, which aims to phase out fossil fuels in transportation and industry. He also invested in electric mobility, promoting greener public transportation.
Biodiversity protection mechanisms
Two major conservation initiatives were implemented by Costa Rican policymakers in response to the ecological crisis: the National System of Conservation Areas (SINAC) and the Payment for Environmental Services (PES) program.
The National System of Conservation Areas (SINAC)
Created under Article 22 of the 1998 Biodiversity Law (No. 7788)5, SINAC was the result of a long development process. It is based on the concept of the Three Ds: Deconcentration, Decentralization, and Democratization.
- Deconcentration of financial resources grants more power to regional authorities, allowing for more effective management of protected areas.
- Decentralization gives local communities greater autonomy to adapt decisions to their specific needs.
- Democratization gradually integrates civil society into environmental governance.
The Payment for Environmental Services (PES) Program
Officially launched in 1997 under Law No. 7554, PES is managed by the National Forestry Financing Fund (FONAFIFO) and SINAC. This program aims to protect primary forests, allow secondary forests6 to regenerate, and promote tree plantations to meet industrial needs.
Based on a contractual system between the government and landowners, it provides direct payments in exchange for adopting sustainable forest management practices.
Costa Rica’s Forest Law recognizes four environmental services provided by forest ecosystems:
- Mitigation of greenhouse gas emissions.
- Hydrological services, including water supply for human consumption, irrigation, and energy production.
- Biodiversity conservation.
- Provision of natural landscapes for recreation and ecotourism.
PES funding comes from various sources, including a fuel tax, a water usage fee, a forestry exploitation tax, as well as international contributions and public-private partnerships.
Costa Rica also channels part of its ecotourism revenues into funding the program, which has played a crucial role in increasing the country’s forest coverage. Today, it is recognized as a model for other nations seeking sustainable solutions.
Now more than ever, the world must take inspiration from Costa Rica’s ecological policies. After all, if they succeeded, why can’t we?
1 FONAFIFO or National Forest Financing Fund: A Costa Rican public organization created in 1997 to manage and fund the PES (Payment for Environmental Services) program.
2 Landowners: Individuals, businesses, or entities that legally own land or real estate.
3 Forest Law No. 7575 of 1996: Aimed at preserving forest ecosystems, limiting deforestation, and promoting sustainable natural resource management. Its main objectives include the prohibition of primary forest deforestation, recognition of the environmental services of forests, the creation of the PES program, strengthening sanctions against illegal deforestation, and encouraging reforestation and natural regeneration.
4 Primary forests: Also known as virgin forests, these are forest ecosystems that have not been significantly altered or disturbed by human activities.
5 Law No. 7788 of 1998 on Biodiversity: Considered one of the most advanced laws in the world for biodiversity conservation and sustainable management, it recognizes the importance of ecosystems, species, and genetic resources as a national heritage and establishes a legal framework for their conservation and responsible use. It created SINAC, applies the 3D principle, recognizes the rights of local communities and indigenous peoples, introduces the concept of ecosystem services, which justifies the establishment of the PES, strictly regulates access to genetic resources by requiring permits and prohibiting biopiracy, and promotes environmental research and education.
6 Secondary forests: Forests that have regenerated after undergoing significant disturbances, such as clear-cutting, fires, or intensive agriculture. Unlike primary forests, they are not completely pristine, and their plant composition may differ from that of the original forests.
