Water and Payment of Environmental Services in Costa Rica
Ricardo O. Russo
EARTH University, Costa RicaPresented at
21st Century Watershed Technology: Improving Water Quality and Environment.
International Conference organized by ASABE (American Society of Agricultural and BiologicalEngineers) and EARTH University (Guácimo, Limón, Costa Rica) focusing on water quality.21-24 February, 2010, Guácimo, Costa Rica
Costa Rica has been a leader among Latin American countries in the design of and development of a system of payment for environmental services (ES) to preserve its forests. Since 1997, a program locally called “Pagos de Servicios AMBIENTALES (known as PSA in Spanish, or Payments for Environmental Services, PES in English), has been providing payments to farmers and forest owners for reforestation, forest conservation, and sustainable forest management activities. Costa Rica's Forest Law 7575 recognizes four ES provided by the forest ecosystems: i) Carbon sequestration and storage(mitigation of GHG emissions); ii) Watershed protection (hydrological services); iii) Biodiversity protection (conservation); and iv) Landscape beauty (for recreation and ecotourism). Furthermore, this PES program has been an instrument of wealth redistribution that comes to fortify the family economiesin rural areas.
Payment for Environmental Services, environmental services, watershed protection, hydrological services, Costa Rica.
In Costa Rica, there has been a shift toward more sustainable and integrated forms of water resources management jointly with a noteworthy spread of ecosystem based financial instrumentsas mechanisms of support for conservation activities. Payment for environmental services is one of these initiatives. Since 1997, a program locally called “Pagos de Servicios Ambientales” (known asPSA in Spanish, or Payments for Environmental Services, PES in English), has been providing payments to more than 4,400 farmers and forest owners for reforestation, forest conservation,sustainable forest management and agroforestry activities. This program has been recognized for helping the country to achieve deforestation control and increasing forest cover since the early2000s. Forest Law No.7575, enacted in 1996, explicitly recognized four environmental services provided by forest ecosystems: (i) mitigation of greenhouse gas emissions; (ii) hydrologicalservices, including provision of water for human consumption, irrigation, and energy production;(iii) biodiversity conservation; and (iv) provision of scenic beauty for recreation and ecotourism.The law provides the regulatory basis to contract landowners for the services provided by their lands, and establishes the National Fund for Forest Financing (Fondo Nacional de FinanciamentoForestal, FONAFIFO).
The PSA Program is managed by FONAFIFO, a semi-autonomous agencywith independent legal status. FONAFIFO’s governing board is composed of three representativesof the public sector (one each from the Ministry of Environment, Energy and Telecommunications,the Ministry of Agriculture, and the National Banking System) and two representatives from the private forest sector (appointed by the board of directors of the National Forestry Office).This paper emphasizes the experience of Costa Rica’s PSA program in relation to hydrologicalservices, including provision of water for human consumption, irrigation, and energy production.
What Environmental Services Means
Traditionally, environmental services (ES) have been understood and defined quite narrowly interms of facilities that provide water and waste-treatment services, often by the public sector.However, there is a need of moving beyond this stage, and to consider ES holistically.Therefore, ES can be defined as a set of benefits generated for society by the existence and