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         Costa Rica: Forest Strategy and the Evolution of Land Use


(The full report is available below)

Costa Rica was once one of the most deforested countries in the world. Today it is a pioneer in reforestation, forest management, and forest protection policies. This Operations Evaluation Department re-port describes the evolution of Costa Rican forest policies since the 1950s, and focuses on internal and external influences, particularly those of the World Bank.

The main change in Costa Rican land use since 1950 has been the transformation of forests into pastures and farmland. The predominant vision of development and economic growth was linked with agro-export production, which supported the expansion of agriculture and cattle ranching. In the 1980s, however, Structural Adjustment Programs (SAPs) introduced by the World Bank reduced the profitability of agriculture and cattle ranching in marginal forest lands. SAPs, along with Costa Rican policies that created special conservation areas and promoted reforestation and forest management, have significantly reduced rates of deforestation.

This evolution of Costa Rica’s forest policies would have been impossible without a strong system of governmental and nongovernmental organizations capable of adapting to new situations. The forest sector in Costa Rica has evolved from an inactive sector without private organizations, technology, or specialized education, to a proactive sector with multiple organizations that lobby effectively for forest sector measures. The Costa Rican government contributed to the evolution of several private forest sector associations. Many new public sector agencies were developed to handle forest issues, often in creative ways. Contrary to the command-and-control structure that typifies many government agencies, the government now works to facilitate private sector participation in and responsibility for forest management.

Costa Rica may not yet have a completely integrated forest sector model, but it does provide a framework that may inspire other countries to innovate. However, all countries must consider their own conditions when adopting new policies and implement reforms at their own pace.

Influence of the World Bank

The World Bank has influenced Costa Rican forest policies, although this influence has primarily been in conceptual and methodological areas and in the provision of seed money. The SAPs, which supported policy changes in agriculture, and the Bank’s 1993 Forest Sector Re-view of Costa Rica probably have had the greatest impact.

The 1993 review introduced many ideas that have influenced Costa Rican policy or that the Costa Rican government is now considering: (1) The review calculated that about 66 percent of the benefits of Costa Rica’s forests are enjoyed globally, and stated that the global community should compensate Costa Rica for conserving, managing, and planting forests; (2) It calculated the total value of Costa Rica’s forests and an average dollar value per hectare; (3) It suggested improving the financial management of national parks as a means of protecting biodiversity; (4) It recommended deregulating harvesting in forest plantations and the import and export of forest products; (5) It argued that subsidies for natural forest management are justified; (6) It suggested reorienting incentives to protect environmental values; and (7) It called attention to issues such as ensuring that natural forest management is compatible with conservation objectives, establishing criteria for forest protection, and allocating institutional responsibilities in the Conservation Areas.

The Bank has taken almost no significant action until now to pro-vide funding for forest activities, largely because it has been divided about which strategies to adopt in relation to the Biodiversity and Climate Change Conventions. The Bank supported a small loan to Costa Rica for the sale of wood futures, which improves the cash flow of small landowners for planting new tree species and managing natural forests. The Global Environment Facility (GEF) and the Bank together funded the Biodiversity Resources Development Project to demonstrate that increased knowledge and information about particular species enhance their value and the marketability of biodiversity services. The Bank also funded the Ecomarkets project to develop the market for environmental services and consolidate the Payment for Environmental Services model that Costa Rica has implemented since 1997. The Bank lending program has also been limited by a shortage of counterpart funds for externally supported projects.

Costa Rica’s Influence

Costa Rica is one of the few countries in Latin America to promote reforestation through incentives such as tax credits, direct payments, and subsidized loans that have benefited landowners, large and small. Among the important steps Costa Rica has taken are the following:
  • The Natural Resources Administration has merged the administration of forest and protected area activities into one unified organization.
  • It has successfully developed a National System of Protected Areas that has a minimum of infrastructure and an institutional presence in each region of the country.
  • The National Forest Fund was established to handle financial issues for forests and natural resources.
  • Important legislation has been passed to protect the nation’s forests, including the Environment Law, the Biodiversity Law, and the Forest Law.
  • The "polluters pay" principle was introduced through the establishment of a tax on fossil fuels to pay for environmental services.
  • Many efforts have been made to protect biodiversity and generate income from it.
  • The Costa Rican Office of Joint Implementation was established to trade carbon emissions in the international market and Carbon Tradable Offset Certificates were developed that could serve as a model for trading other environmental services.
  • The government instituted a national system to certify good forest management practices.
  • Costa Rican forest owners have strong organizations that give them technical support for reforestation, forest management, and forest conservation. In recognition of this, Costa Rica has delegated much responsibility for forest management and conservation to private landowners.

Costa Rican forest policy is a mix of international policies and strong national ideas. This mix has not resulted in a perfect forest model, but certainly in one that deserves support. To ensure such support, it is important to create more opportunities for mutual understanding and learning between Costa Rica and the World Bank.

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