Costa Rica reverses deforestation, becoming a global example
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In 1987, Costa Rica had reduced its forest cover to just 21 percent after losing half of its forests since 1940. The country responded by implementing policies to reverse this trend, and now more than half of its land area is again covered by forest.
Expansion of cattle ranching and agriculture, particularly for beef, bananas, coffee, and cacao, drove the initial deforestation.
In 1996, the Costa Rican government passed the Forest Law No. 7575, which required authorization to cut down trees and established the Payment for Environmental Services (PSA) program. This program financially incentivized landowners to conserve or reforest their land. FONAFIFO, the agency administering the PSA, has spent 524 million dollars over 20 years and protected over one million hectares of forest, roughly one-fifth of the country.
The PSA program operates by having landowners register their land with FONAFIFO for inspection and classification. FONAFIFO then offers contracts lasting three to 15 years, depending on the land’s characteristics and intended use. Since its inception, the program has impacted 1,472,544 hectares, 30 percent of Costa Rica, and distributed around 750 million dollars to 21,000 landowners. Funding for the program comes primarily from a tax on fossil fuels levied on oil companies, currently generating 26.5 million dollars annually.
