How Costa Rica reversed deforestation and raised hundreds of thousands for conservation – A greener life, a greener world

A ship passes by way of a forest alongside Costa Rica’s Sierpe river. The Central American nation has gained reward for its conservation efforts, together with in reforestation, and continues to draw worldwide finance to help its initiatives. Picture credit score: Christoph Lischetzki / Alamy.

By Sebastián Rodríguez

The Central American nation has secured greater than US$135 million in finance for nature in recent times, one other leaf in its conservation success story.

Throughout final November’s COP26 local weather change convention, the president of Costa Rica, Carlos Alvarado, signed an settlement that may see US$20 million stream in direction of the conservation of the nation’s forests, funds earmarked to extend safety and assist keep away from deforestation.

This new financing comes from the LEAF Coalition, a partnership between the governments of the USA, UK and Norway, alongside among the world’s largest corporations, together with Amazon, Nestlé, BlackRock and Walmart. Half of the allotted funding is about to reach by way of the coalition, with the remaining US$10 million a part of a personal association between Norway and Costa Rica.

On saying the settlement, the nation’s atmosphere minister, Andrea Meza, mentioned it signified “the start of nice advances in local weather finance”, whilst LEAF and its big-name sponsors confronted accusations of company “greenwash”.

For Costa Rica, nevertheless, this welcome stream of finance is the newest success for a small nation that has garnered a lot reward for its conservation efforts, together with a reversal of deforestation over the previous few many years. It is only one of a number of such agreements it has struck in recent times, because it leverages an ever-stronger fame for efficiently implementing conservation initiatives regardless of financial challenges.

Costa Rica pioneers conservation in fiscal deficit

Traditionally, the Costa Rican conservation mannequin has been profitable as a result of it primarily operates with home assets. However at occasions of excessive financial strain, corresponding to the continued COVID-19 pandemic, worldwide funds for conservation present aid to the nation, defined Roger Madrigal, a forestry researcher on the nation’s Tropical Agricultural Analysis and Larger Schooling Middle (CATIE).

“In the end, Costa Rica is a middle-income nation with a restricted finances for investments in nature. These cooperation funds have traditionally been crucial within the complete finances,” indicated Madrigal.

Sustaining this funding is significant to Costa Rica, which has come to be seen as a conservation success story, for instance, as the one nation in Latin America to reverse deforestation, after having had excessive charges up till the Nineteen Eighties.

Firstly of the twentieth century, Costa Rica had centered its financial growth primarily on agricultural exercise, enacting legal guidelines that inspired deforestation to show land into agriculture, such because the land and colonisation legislation of 1961. In consequence, the nation misplaced half of its mature forest between 1940 and 1980, in response to a 2016 report from the REDD+ initiative. A number of components led to a change of mentality in direction of forests within the nation, the report provides, together with progress in tourism throughout the Nineteen Eighties.

In consequence, Costa Rica started to implement stricter environmental laws, new conservation insurance policies and modifications within the agricultural market. These components halted web deforestation and allowed forests to regenerate. Presently, 59% of its territory is roofed by forests, after having fallen to as little as 40% in 1986.

One other necessary element to this achievement was a programme of funds for environmental companies (PES). The Costa Rican PES system has had a easy however confirmed precept: the state pays personal farmers to guard the forest on their land, with the funding primarily coming from gas taxes.

This has labored nicely for many years, however just lately crises arising from the COVID-19 pandemic have put extreme financial strain on the conservation system, each in PES programmes and in protected areas. On the one hand, the pandemic led to decrease tax incomes and restrictions on car use which means decrease gas consumption. This, in flip, left the PES system with fewer assets to pay farmers and a gap within the finances of round US$1.5 million in 2020, in response to official information.

Then again, the Legislative Meeting of Costa Rica made sturdy cuts in 2020, with deputies slashing greater than a 3rd of the finances for protected areas.

“An necessary a part of our work has been finding sources of financing, figuring out necessities and making an attempt to get assets to enter as quickly as potential,” defined Jorge Mario Rodríguez, director of the Nationwide Forest Financing Fund (Fonafifo), the establishment that administers the PES programme.

Funds for nature

Within the final two years alone, Costa Rica has secured agreements for greater than US$135 million in funds for nature – an achievement pushed by its successes in restoring forests.

The potential for bushes to seize carbon emissions by way of photosynthesis appears essential to the latest upsurge. This brings profit for your entire planet, however its financial advantages haven’t traditionally been recognised or simple to worth – one thing Costa Rica has made efforts to alter, of late.

In accordance with official information, between 1986 to 2013, Costa Rica’s forests drew down 107 million tonnes of CO2. “No one recognised us for this – this can be a present that Costa Rica has given to the world,” mentioned Rodríguez.

Just lately, the nation has tried to raised measure this seize of emissions, by extra exactly calculating its hectares of forest and estimating how a lot carbon they’ll take up. On this method, it hopes to cease merely ‘making a gift of’ these advantages – and begin pricing them as an alternative.

These makes an attempt have gone a way to assist Costa Rica acquire latest financing for its nature. In 2020, for instance, the nation acquired US$54 million from the Inexperienced Local weather Fund, in recognition of proving to have captured 14.7 million tonnes of CO2 between 2014 and 2015.

That very same 12 months, Costa Rica reached one other settlement, a US$60 million deal with the World Financial institution, for related causes, “buying” emissions reductions of 12 million tonnes to be achieved earlier than 2025. After which, most just lately, got here the COP26 announcement of an additional US$20 million by way of the LEAF Coalition and the Norwegian authorities.

Situations differ between these agreements. For instance, the Inexperienced Local weather Fund granted the nation non-reimbursable funds, which shall be used to strengthen PES programmes, stop forest fires and finance indigenous territories. These initiatives should be executed earlier than 2026.

The circumstances of the LEAF Coalition funding, in the meantime, correspond to a “letter of intent” submitted by Costa Rica, which specifies the emissions that the nation goes to seize between 2022 and 2026. Meaning the funds is not going to arrive for a number of years, for the reason that seize of emissions has not but occurred.

Rodríguez defined that in an effort to obtain these recognitions, an important step is to create strong monitoring techniques. On this method, the nation can negotiate primarily based on stronger information and with extra actual figures on the seize of emissions.

Costa Rica has additionally managed to obtain funds with barely extra versatile mechanisms. In 2021, the nation was the first winner of the Earthshot Prize, an initiative pushed by the UK’s Prince William that seeks to spotlight profitable instances of conservation. It was chosen as a consequence of the success of the PES system in recovering the nation’s forests, and awarded a prize of US$1.3 million.

On this case, as funds are extra versatile, they are going to reportedly be used to create a marine PES system, as a technique to pay coastal populations to guard the ocean. The precise mechanism continues to be unclear, as it’s within the very early phases of design.

Debt-for-nature swaps in Costa Rica

The nation has additionally experimented with different methods to finance the conservation of its forests, corresponding to debt-for-nature swaps. In brief, these permit nations to alternate their exterior debt for funds for nature conservation, that are incessantly distributed by way of a 3rd organisation, corresponding to an NGO.

These mechanisms had been in style throughout the Nineteen Eighties, following the Latin American debt disaster, however ones which nations within the area are as soon as once more contemplating amid present difficulties. In 2007 and 2010, for instance, Costa Rica carried out its first debt-for-nature swaps with the US. The primary allotted US$26 million for conservation in communities surrounding protected areas, whereas the second contributed US$27 million on to funding protected areas.

At the moment, the nation didn’t have an NGO able to managing the funds. Because of this, the Costa Rica Endlessly Affiliation was created, with the specific objective of filling this void and managing each side of the alternate in swaps, because the organisation’s conservation programmes supervisor, Pia Paaby Hansen, defined.

“Probably the most optimistic factor [about this mechanism], and what facilitates the execution of the funds, is the kind of governance it has. It permits us to deal with funds in a clear method,” Hansen advised me.

In brief, the affiliation responds to an oversight committee that options, in these instances, representatives of the US authorities, the federal government of Costa Rica, and representatives of different NGOs. This committee is necessary for negotiation and making use of strain on eventual tasks, in addition to clarifying monetary circumstances, Hansen defined.

The funds created from these swaps have facilitated the planting of greater than 60,000 bushes, the creation of 10 brigades to battle forest fires, and the acquisition of lands for conservation for greater than US$2 million.

“The necessary factor is that we’ve been very energetic in figuring out wants and monetary gaps, in an effort to obtain efficient conservation,” mentioned Hansen.

Debt-for-nature swaps might characteristic extra prominently in finance discussions at this 12 months’s phase of the COP15 convention on biodiversity, the place Costa Rica’s successes in conservation – and its capability to leverage such successes to usher in additional finance – are prone to be highlighted as soon as extra.

First revealed in Dialogo Chino.

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