July 29, 2012

Money grows on trees

fca-mkt-piclr.jpgEnvironmental services in Costa Rica shows how money can grow on trees

As one of the pioneers of payments for environmental services (PES), Costa Rica has already established several long term income streams to compensate landowners for conserving their rainforest.  Trees and forests provide significant local and global environmental services, ameliorating climate change, maintaining rainfall patterns and, of course, protecting biodiversity.   


The concept, however, is certainly not without controversy.  Some argue that the “commodification” of nature will concentrate power and profit in the hands of banks, corporations and financial elite.  Others contest that the reason our forests have been disappearing fast is precisely because we have failed to allocate them their true value.

Costa Rica began to implement PES two decades ago following the 1992 Earth Summit. Rather than wait on the international community to prepare its environmental services framework, Costa Rica saw that urgent action was needed against deforestation and water course devastation.  Passing a law that prohibited deforestation and allowed for PES, the Costa Rican government formed a new institution – FONAFIFO – to broker environmental service deals.  Believing that it would be difficult to raise money internationally, the Costa Rican government set up a domestic system which stipulated that a share of fuel tax revenues was available to finance and kick-start the process.


Similarly, 25% of water tax revenue in Costa Rica is reserved for paying for environmental services in key watersheds.  Other innovations include a green bank debit card that raises money for conservation by people accumulating points as they use the card.  The points are donated by the bank to FONAFIO’s biodiversity fund.  Furthermore, small-scale farmers who protect forests can earn carbon credits which are sold to national industries to help them offset their greenhouse gas emissions.

As the price of land rises, however, the compensation is not always sufficient and it is increasingly difficult to stop farmers turning pockets of forest over to highly profitable cash crops such as pineapples.  Nevertheless, today, PES tends to be seen in a positive light since it supports projects that bring long-term benefits for all – such as small cocoa enterprises for women, furniture workshops, and scholarships for doctors and nurses.

According to Justa Romero, a midwife and indigenous community leader: “Trees are land, land is water, water is life ……..PES is helping us protect our own way of living.”

Source: The Guardian


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