OECD Environmental Performance Reviews: Costa Rica 2023

Report

OECD Environmental Performance Reviews

6 October 2023

Chapter 3. Biodiversity conservation and sustainable use

Abstract

A megadiverse country, Costa Rica is known globally for its success in reversing deforestation. The country’s extensive protected area network and pioneering programme of payments for ecosystem services have helped reduce biodiversity loss and extend forests’ carbon sequestration capacity. However, more should be done to tackle pressures on biodiversity from development of infrastructure and settlements, tourism, farming and fishing. This chapter discusses Costa Rica’s progress in preserving its rich ecosystems and species. It reviews the legal, strategic and institutional framework, as well as the policy and financing instruments for biodiversity conservation and sustainable use. Finally, this chapter assesses how biodiversity considerations have been mainstreamed into tourism, agriculture and fishing policies.

3.1. Introduction

Costa Rica is a megadiverse country whose biodiversity supports the country’s florid nature-based tourism, productive agriculture and artisanal fisheries. The natural environment is deeply rooted in the national cultural identity. Globally, Costa Rica is renowned as the first tropical country to reverse deforestation. This is partly the result of a mix of targeted policies, including a ban on mature forest clearing, a nationwide programme of payment for ecosystem services and a network of protected areas, which will all be discussed in this chapter. The country has a wide-ranging policy framework for the conservation and sustainable use of biodiversity, in recognition of its key economic and social role. However, there is scope to strengthen policy coherence, implementation and effectiveness to tackle persistent pressures on biodiversity.

3.2. Status, trends and pressures

Costa Rica is home to about 6% of the world’s known species and hosts a large variety of terrestrial, freshwater and marine ecosystems. It has a small terrestrial area of 51 100 square kilometres (km²), with a 1 254 km-long coastline on the Pacific Ocean and a shorter Caribbean coastline. It has an extensive marine area, more than ten times larger than its territory on land. The country boasts one of the ten largest forest coverages in the OECD. About 35% of land is used for agriculture (Figure 3.1).

Figure 3.1. Forests cover a large share of Costa Rica land area

Infrastructure development, urbanisation, tourism, farming, fishing, untreated wastewater, pollution and climate change are the main drivers of biodiversity degradation in Costa Rica. The conservation status varies across regions and ecosystems. The northern areas of the country, from the Pacific to the Atlantic coasts, are those facing the most cumulative pressures. The ecoregions with more pressures per area are mangroves in both the Pacific and Caribbean coasts, tropical humid forests of the Atlantic Isthmus and the Central American dry forests. The best conserved ecosystems are found in steep slope mountain areas and flood plains, which are usually found in officially protected areas (MINAE et al., 2018_[1]).

Climate-related extreme weather events, such as floods, droughts and coastal storms (Chapter 1), degrade and fragment the ecosystems and make them more vulnerable to the impact of a changing climate. Impacts on biodiversity include changes in distribution, composition and growth rates of forest ecosystems; changes in water bodies; sea level rise; coastal erosion; sedimentation; declines in the geographic range and reproductive capacities of species (mainly amphibians, reptiles, birds and bats); temporal and spatial imbalances in the distribution of marine species; and food availability (MINAE, 2015_[2]).

3.2.1. Terrestrial ecosystems

The country’s terrestrial ecosystems include dry forests, tropical rainforests, paramos, mangroves and other wetlands, covering more than half of the national territory.

Forest ecosystems

Costa Rica is one of the three countries in Latin America and the Caribbean (LAC) that increased forest cover since 2000 (Figure 8 in Assessment and recommendations). After decades of rampant growth, deforestation started to slow down with the collapse of the beef market in the 1980s, as well as the progressive internal migration to cities and the development of tourism (Ardila et al., 2020_[3]). Regulatory and incentive-based policies supported the reforestation and afforestation of the country (Sections 3.5 and 3.6). Today, forests cover 59% of the country’s land area (Figure 3.1), up from an all-time-low of 21% in 1987 but still far from 75% of 1940. About half of Costa Rica’s forested area is under some form of protection. A quarter is in the official network of protected areas and another quarter is private land included in biological corridors. Most of the remaining mature forest is in officially protected areas, often in inaccessible regions, although some remain exposed to illegal clearing (Section 3.5).

Reforestation and regeneration rates vary across types of forests and regions. Dry forests have benefited from high recovery rates, while humid and cloud forests show low to moderate deterioration levels (MINAE et al., 2018_[1]). Forest recovery is mainly the result of reforestation of ancient forest areas that had been converted into pastures and croplands over the previous decades. Regrowing forests are cleared on average within 20 years. Secondary forests on abandoned agricultural lands are ecologically different from the original forest of a site. These dynamics have led to substantial forest and habitat fragmentation. Forest fragmentation and logging degrade forests, reducing their contribution to climate change mitigation goals and possibly reducing their resilience (Ardila et al., 2020_[3]).

As in other countries, Costa Rican forests are exposed to multiple pressures. Climate change and temperature extremes are affecting forests, some of which have stored carbon that might be released (Chapter 1). In 2019-20, about one-third of the country’s forest-covered areas was exposed to very high or extreme wildfire danger (IEA/OECD, 2023_[4]). Land conversion from forests to pastures, crops and urban use declined considerably in the first half of the 2010s. However, evidence suggests that it grew in the second half of the decade (CONARE, 2021_[5]). The highest pressures are on areas closer to the so-called agricultural frontier, with high road accessibility, proximity to urban communities, lower land prices and lower socio-economic development.

Wetlands

Wetlands, including mangroves, have been severely deteriorating due to the eutrophication processes induced by residual fertilisers, as well as because of waste and wastewater pollution, sedimentation and salinisation. Many wetlands are located on private properties, which exacerbates their risk to be affected or drained for productive activities. National conservation strategies have primarily focused on the upper and lower parts of watersheds leaving out the middle sectors with the greatest alterations (MINAE et al., 2018_[1]). Costa Rica is home to 12 internationally recognised wetlands under the Ramsar Convention totalling about 570 000 hectares (ha). It has requested the designation of additional sites (35 000 ha).

3.2.2. Coastal and marine ecosystems

The long coastlines in the Caribbean and in the Pacific result in a wealth of coastal marine ecosystems, including coral reefs, mangroves, seabed coastal ecosystems, sandy and rocky beaches, seagrass meadows and estuaries. Costa Rica has around 670 000 ha of coral formations on both Pacific and Caribbean coasts, hosting 59 different species of reef-forming corals (which represent 7.4% of global diversity) (MINAE et al., 2018_[1]). More than two-thirds of the coral formations are within protected areas.

Only 5% of Costa Rica’s population live in coastal areas. Still, human pressures are high and include unsustainable exploitation of natural resources associated to poverty, unsustainable fishing practices (Section 3.10) and uncontrolled development of tourism-related infrastructures and buildings, as well as irresponsible tourist behaviour (Section 3.8) (Moreno Díaz et al., 2019_[6]). In addition, the country’s topography exposes coastal and marine ecosystems to runoffs, sediments, pollution, untreated sewage and waste produced in the Central Valley (where most people live) (Chapter 1).1 Natural phenomena, mostly the El Niño–Southern Oscillation and red tides, and climate change-induced sea level rise have already affected these ecosystems.

Knowledge about the health of marine ecosystems and species is limited. According to the Ocean Health Index (which includes environmental, social and economic criteria), the status of Costa Rica’s marine ecosystems slightly worsened between 2012 and 2022 (Figure 3.2). Its score of 63 is below the global score of 69, and Costa Rica ranks 175th of 220 regions. While most dimensions of the index had no

Figure 3.2. The Ocean Health Index indicates pressures on Costa Rica marine resources

unsustainable exploitation of marine fish resources (Section 3.10) (Ocean Health Index, 2022_[7]). Populations of many cartilaginous fish (like sharks and rays) are in decline. They are considered the marine group most directly impacted and threatened by human activities (MINAE et al., 2018_[1]). Costa Rica has not assessed the biological sustainability status of commercial fish stocks (OECD, 2022_[8]).

3.2.3. Threatened species

Costa Rica is home to more than 120 000 species, including some 7 000 marine species (MINAE et al., 2018_[1]). The country’s tropical rainforest areas host the largest number of species, many endemic. About three-quarters of the reported marine species can be found in the Pacific waters. Despite improved regulations, the extraction, transport, trafficking, trade and possession of species continue.2

About 7% of Costa Rica’s species are threatened. While this is relatively low compared to other megadiverse countries, the number has been increasing since the late 1990s. The number of threatened species included in the IUCN Red List and present in Costa Rica grew from 291 to 567 between 2011 and 2021. Most of the increase is due to improved knowledge (CONARE, 2022_[9]). The most threatened group is amphibians, followed by mammals and vascular plants (Figure 3.3). Bird populations have diminished. More than 3% of known bird species are threatened in the country. In dry forests, logging, wildfires and poaching have endangered populations of large mammals such as jaguars, pumas, tapirs, ocelots and peccaries (MINAE et al., 2018_[1]). Several invasive alien species exert pressures on the country’s biodiversity, especially on land (Figure 3.3). They can out-compete native species for space and resources, be predatory to native species and/or introduce disease. They can also cause economic harm by damaging agricultural production, forestry, fishing and water supplies (OECD, 2018_[10]).

Figure 3.3. Nearly a third of known amphibian species are threatened and invasive species exert pressures on terrestrial habitats

3.2.4. Economic valuation and ecosystem services

Costa Rica’s numerous and diverse ecosystems provide several services to the country’s population and economy. The country’s natural capital is estimated at no less than USD 15 billion per year, equivalent to 23% of gross domestic product (GDP) in 2019 (Hernández-Blanco and Costanza, 2021_[11]).3 More than 40% of this value arises from cultural services such as recreation and tourism; regulating services – such as climate regulation, erosion prevention and pollination – generate some 37% of the total ecosystem service value. These are followed by provisioning services (e.g. food and water) and supporting services (providing habitats for species). The evaluation of ecosystem services should guide the revision of the Programme of Payment for Environmental Services (Programa de Pago de Servicios Ambientales, PPSA), allocation of financial resources and policy making more broadly (Sections 3.6 and 3.7).

Hernández-Blanco and Costanza (2021_[11]) estimate that mangroves are the ecosystems that provide the highest economic benefits to society per hectare, followed by rivers and coral reefs. Nevertheless, when considering their total area, oceans are the most valuable ecosystems in Costa Rica (Figure 3.4). There is a significant variation in the value of services provided by different ecosystems. Most of the value of forest ecosystems comes from regulation services. Pollination is the most valuable regulation service, followed by erosion prevention and climate regulation. The provision of biological and genetic resources (e.g. for production of pharmaceuticals), support for species life and erosion prevention are among the most valuable services provided by mangroves. In the case of coral reefs, the most valuable services are tourism and recreation.

Figure 3.4. Mangroves are the ecosystem that per hectare provides greatest economic benefit, while oceans are the most valuable ecosystem

3.3. Setting the governance for biodiversity management

In the mid-1990s, Costa Rica overhauled its institutional and legislative frameworks for biodiversity conservation. This move aimed to halt deforestation, recover lost forests and promote economic activities based on the sustainable use of biodiversity. The 1996 Forestry Law and 1998 Biodiversity Law introduced a ban on mature forest clearing, the nationwide PPSA and a governance system for integrated natural resource management based on conservation areas. These, together with the 1992 Wildlife Conservation Law and the network of protected wilderness areas (Áreas Silvestres Protegidas, ASPs), remain the pillars of the country’s policy to combat deforestation and manage ecosystems and species.

3.3.1. Institutional setting

As in other sectors of Costa Rica’s public administration, several institutions at central and subnational levels share responsibilities over biodiversity management together with the Ministry of Environment and Energy (MINAE). This often creates conflicting objectives and overlapping responsibilities (Chapter 2). Three subsidiary bodies of MINAE are at the core of biodiversity governance. The National Biodiversity Management Commission (CONAGEBIO) formulates policies for the conservation and sustainable use of biodiversity, including access to genetic resources and protection of traditional knowledge associated to their use. The National Forestry Financing Fund (FONAFIFO) finances afforestation and reforestation and manages the PPSA. The National System of Conservation Areas (SINAC) oversees the ASPs and is tasked with the integrated management of natural resources within and outside protected areas.

Costa Rica adopted a unique approach to multi-level governance for natural resource management. The country’s territory is organised into 11 jurisdictions – called conservation areas – for the integrated management of the ASPs and natural resources (forest, wildlife and water). The boundaries of conservation areas contour the ASPs and their areas of influence and interactions, thereby differing from the borders of the country’s seven provinces (Figure 3.5). A multi-stakeholder body – the Regional Council of Conservation Areas – is the decision-making body of each conservation area. The National Council of Conservation Areas – the governing board of SINAC – co‑ordinates biodiversity policy design and implementation between the national level and all conservation areas.4 There are also local councils for conservation areas, as well as other territorial multi-stakeholder bodies for biological corridors and watershed committees. Despite the original ambition, SINAC and the conservation areas have largely focused on managing the ASPs and biological corridors rather than on integrated natural resource management (Castillo and Soto Navarrete, 2017_[12]).

3.3.2. The policy framework

Costa Rica has proactively engaged in international fora related to various aspects of biodiversity conservation and sustainable use, primarily the UN Convention on Biological Diversity (CBD).5 The National Biodiversity Policy 2015-30 and the National Biodiversity Strategy 2016-25 and Action Plan (ENB2) are the main documents guiding the country’s biodiversity policy and are aligned to the country’s international commitments. A wide array of biodiversity-related strategies and programmes are also in place, such as the National Wetlands Policy 2016-25, the National Forest Development Plan, the REDD+ Strategy, the National Landscape Restoration Strategy 2021-50 and the National Bioeconomy Strategy 2020-30, just to name a few. However, ensuring policy coherence and effective implementation of the multitude of biodiversity-related programmes and policy measures, often with overlapping objectives, is a challenge. It is unclear to what extent they have yielded the expected results and at what costs. As in other Latin American countries, inadequate resources, administrative capacity and co‑ordination hamper execution of plans and programmes (OECD, 2018_[10]).

Figure 3.5. Eleven conservation areas are the territorial units for integrated natural resource management

The ENB2 adopts a result-based approach. It sets 100 targets (with intermediate target to 2020), identifies the administrations responsible for achievement of each target and establishes an inter-institutional committee to monitor progress, under CONAGEBIO’s leadership. Most ENB2 targets have been achieved or are on track to be achieved, including those for protected areas management, connectivity, forest cover and area under the PPSA. However, progress on some key targets has been slower. This slow progress relates primarily to the targets on enforcement of environmental legislation and spatial planning, recovery of mangrove ecosystems and coral reefs, illegal extraction and trade of species, pesticide use, knowledge of marine biodiversity and environmental education (MINAE, CONAGEBIO and SINAC, 2023_[13]).

The planned revision of the ENB2 aims to align the strategy with the targets of the Kunming-Montreal Global Biodiversity Framework (GBF) for 2030. This provides the opportunity to increase the role of nature-based activities as a source of economic and social development and to address barriers to achieving biodiversity-related targets in a cost-effective way. The updated strategy should bring the multitude of biodiversity-related programmes and policy measures into a coherent framework and identify concrete actions to mainstream biodiversity considerations in agriculture, fisheries, tourism and spatial planning policies (Sections 3.4, 3.8, 3.9 and 3.10). It should also consider how to reduce institutional fragmentation, which hinders implementation and risks increasing the costs of achieving targets. Increasing cost effectiveness is even more crucial given the fiscal constraints Costa Rica is likely to face in the years to come. Further improving knowledge and data, particularly on marine and freshwater ecosystems, is essential to build consensus around biodiversity policy, identify priorities for action and manage natural resources effectively. This is a challenge Costa Rica shares with other countries in the region (OECD, 2018_[10]).

In 2015, Costa Rica adopted its ten-year strategy and action plan for the adaptation of biodiversity to climate change. Among the priority actions identified by the plan are strengthening the protected areas and biological corridor networks and incorporating biodiversity considerations in land-use plans (MINAE, 2015_[2]). The subsequent National Climate Change Adaptation Plan (PNACC) 2022-26 also has a strong focus on reducing the climate vulnerability of tourism, water resources, biodiversity and forestry (Chapter 1). Nature-based solutions (NbS), including the sustainable management of forest, marine and freshwater ecosystems, are among the main lines of action of the PNACC. This is welcome, as NbS may be more cost effective and adaptable to uncertain future climate conditions than traditional approaches, such as hard defences or other “grey” infrastructure (OECD, 2018_[14]). Further extending the use of NbS would provide multiple benefits, including reducing greenhouse gas (GHG) emissions and biodiversity loss, as well as creating employment and income opportunities for local communities (OECD, 2020_[15]).

3.3.3. Stakeholder participation and engagement of Indigenous Peoples

Costa Rica has made remarkable progress in enhancing public participation in environmental decision making. In 2018, the government introduced the General Mechanism for Consultation of Indigenous Peoples to implement the legal obligation to consult Indigenous Peoples before implementing policies, measures and projects that can potentially affect their communities (Chapter 2). There are eight Indigenous Peoples in Costa Rica, with a population of over 100 000 or about 2.4% of the country’s population. The Indigenous Peoples estimate that 16% of the country’s cloud forests, 15% of wetlands and 5% of mangrove ecosystems are in the 24 indigenous territories (CONAGEBIO, 2023_[16]). Forests cover 70% of the areas of the indigenous territories, with overlaps between these territories and the official ASPs (CONAGEBIO, 2023_[16]; FAO and FILAC, 2021_[17]).

The National Biodiversity Policy and the ENB2 aim to foster social inclusion and active citizen engagement. The ENB2 is itself the result of a broad participatory process that included Indigenous Peoples in an effective manner for the first time, through working groups and workshops. The Intercultural Dialogue Roundtables allow the indigenous organisations to make their comments and proposals. Similar arrangements for participation have contributed to improve relationships between the government and organisations working with Indigenous Peoples.

Progress has been made in identifying areas for ancestral uses, where Indigenous Peoples carry out their traditional activities such as fishing and extraction of medicinal plants. One of the ENB2 objectives is identifying the areas dedicated to biodiversity conservation and sustainable use that will be managed by Indigenous Peoples (Áreas de Cuido). The restrictions to resource use and ancestral activities in the ASPs have been a source of conflict with indigenous communities. There are positive examples of co‑operation between institutions and indigenous communities, such as the Raíces incubation programme to support sustainable tourism ventures in indigenous territories.6 There is scope to extend these experiences, as well as to further involve the Indigenous Peoples in the PPSA (Section 3.6). More resources should be devoted to engaging and empowering Indigenous Peoples.

Environmental non-governmental organisations (NGOs) provide crucial support to public institutions for the design of biodiversity policy and the management of natural resources, as well as for creating bridges between the public and the private sector. As of 2017, there were 14 international, 39 national and 29 local NGOs working in Costa Rica for the preservation and promotion of biodiversity (SINAC, 2017_[18]). NGOs have been key partners for, among others, patrolling protected areas, providing veterinary services for wildlife, generating scientific knowledge and innovative conservation practices, organising education and training courses, and raising awareness. Some NGOs have been instrumental in encouraging farmers and other landowners to enrol in the PPSA and comply with its requirement in the interest of the public good (Wallbott, Siciliano and Lederer, 2019_[19]) (Section 3.6). Others own and manage private protected areas or have led to the establishment of biological corridors – a key form of participatory management of biodiversity (Section 3.5).

3.4. Integrating biodiversity into land-use planning and permitting

In line with OECD standards, the legislation requires an environmental impact assessment (EIA) prior to issuing the licence for any activity, work or project that entails risks of adverse impacts on the environment, including on ecosystems and species (Chapter 2). The National Environmental Technical Secretariat (SETENA) manages the EIA procedure and issues the corresponding Environmental Viability or Licence (VLA). However, as in other countries, consideration of biodiversity impact and mitigation measures in EIA, as well as the overall effectiveness of the assessment process, can be strengthened (OECD, 2018_[10]). Some weaknesses in SETENA’s governance and procedures negatively affect the quality of its EIA (CGR, 2022_[20]).

The lack of land-use planning has been a major indirect driver of biodiversity loss in Costa Rica. The ENB2 acknowledges the need of better integrating biodiversity into spatial planning on land and sea. Some initiatives have been taken in this direction, such as the San José Biodiver_City Project and the National Urban Environment Agenda, but it is too early to appreciate their results. A regulation to include environmental considerations within cantonal regulatory plans (PRCs) was under development at the time of writing.

There is evidence that uncontrolled land conversion continues outside protected areas, where spatial management is regulated through the PRCs (CONARE, 2021_[5]). As of July 2021, 40 of the country’s 82 municipalities had PRCs. Half of these plans are more than 20 years old, 60% cover only a part of the municipal territory and 70% have not undergone strategic environmental assessment (which is required to obtain the VLA) (Chapter 2). Only four PRCs integrate vulnerability to hydrogeological risk, which is expected to increase with climate change (Chapter 1). Overall, this results in a quarter of all construction occurring in areas without an adequate land-use planning instrument (CONARE, 2021_[5]). About 30% of municipal construction works are undertaken without a building permit (CONARE, 2020).

Much of the new infrastructure and building development linked to tourism occurs in coastal areas, while 85% of the few adopted PRCs in these areas lack a VLA (CONARE, 2021_[5]). Many of the country’s maritime terrestrial zones (ZMT) have experienced illegal development and buildings, which has threatened marine-coastal ecosystems, as well as the quality of tourist attractions. The absence of marine spatial plans exacerbates cumulative pressures on coastal zones. In 2009, the Costa Rica Tourism Board (ICT) and the National Housing and Urbanism Institute (INVU) released methodological guidelines to support coastal municipalities to develop integrated management plans for the ZMTs (ICT, 2022_[21]). However, administrative capacity in coastal municipalities is even weaker than in the rest of the country, as these areas are sparsely populated, and with higher-than-average unemployment and poverty. A fragmented regulatory framework, weak interinstitutional co‑operation, little participation of local communities and strong pressures from interest groups have further impeded the effective development and use of ZMT plans (Moreno Díaz et al., 2019_[6]). In response to these challenges, in 2022, the government established an interinstitutional technical group for the revisions and approval of cantonal and coastal regulatory plans.

There is an urgent need to complete spatial planning and mainstream biodiversity in it, in line with GBF Target 1.7 Costa Rica could consider adopting zoning processes for environmentally vulnerable areas outside the ASPs. For example, Brazil has been implementing ecological-economic zoning (ZEE) since 2002 (OECD, 2015_[22]). ZEE is a landscape-scale planning and management tool to allocate compatible activities in defined environmental areas, with a view to using their natural resources sustainably.

3.5. Managing protected areas effectively

3.5.1. Extension and ecological representativeness of the protected area network

Costa Rica has an extensive system of protected areas, with a strong focus on forested areas. As of 2022, there were 151 ASPs, under nine management categories (Figure 3.6).8 National parks and national wildlife refuges are the most extensive categories of terrestrial ASPs; marine management areas and national parks cover nearly all marine protected areas. Wildlife refuges are the only officially protected areas that can include privately owned land.

Figure 3.6. Costa Rica has an extensive and variegated system of protected areas

According to SINAC data, as of 2022, terrestrial ASPs covered about 25% of Costa Rica land. This is higher than many other LAC countries and above the OECD average of 16%. This is also well above the CBD Aichi Target 11 to protect at least 17% of land area by 2020. The ASPs cover a quarter of total forested land, while another quarter is in privately owned land within biological corridors. With the establishment and extension of the protected areas around Cocos Island in 2021, the share of marine protected areas jumped from less than 3% of the exclusive economic zone to 30%. This is the second highest share among LAC countries and above the OECD average of 22% (Figure 3.7).

Therefore, Costa Rica is not far from achieving the GBF Target 3 calling for 30% of each country’s land and sea to be conserved through the establishment of protected areas and other area-based effective conservation measures (OECMs).9 However, it will need to accelerate the pace of progress for terrestrial areas compared to the last decade. Indeed, the share of terrestrial protected areas has remained virtually constant since 2005. Costa Rica has not yet reported any OECMs in the world database maintained by the UN Environment Programme World Conservation Monitoring Centre.10 At the time of writing, the country was working on identifying OECMs and establishing a nationwide legal framework for the implementation of these measures.

Figure 3.7. Costa Rica protects a larger share of its land and marine areas than most LAC countries

More efforts are needed to improve the ecological representativeness of terrestrial and marine ASPs in line with the GBF Target 3. As of mid-2021, all the country’s eight terrestrial ecoregions were at least partly included in ASPs, with coverage ranging from 12% (dry and seasonal moist forests in the North) to 100% (Cocos Island moist forests).11 On average, ASPs covered 44.5% of the area within all the country’s terrestrial ecoregions and 27 key biodiversity areas (KBAs) (i.e. sites that contribute significantly to the global persistence of biodiversity) (CBD and UNDP, 2021_[23]). The least represented KBAs are rivers and coastal and mangrove areas on the northern Pacific and central Caribbean coasts (Figure 3.6).

With regards to marine areas, as of June 2021, the ASPs covered 16.2% of the five ecologically or biologically significant marine areas (EBSAs) present in Costa Rica. This percentage is probably underestimated as it does not consider the enlargement of the marine protected areas around Cocos Island, which sits in the Corridor Marino EBSA in the Pacific Ocean. Still, ASPs cover less than 2% of the wide and biodiversity reach Costa Rica Thermal Dome in the country’s northern Pacific exclusive economic zone. The EBSAs off the Caribbean costs are better represented, with about 35% of their area within ASPs (CBD and UNDP, 2021_[23]).12

As in all countries, there are several barriers to the enlargement or establishment of new ASPs. The cost of and procedure for buying private land are major obstacles. A financial mechanism for such purchases is still lacking, despite the objective of the ENB2. In general, establishing a new terrestrial or marine ASP requires extensive consultations with local communities, which would face constraints to their activities. They would accept ASPs only if offered the prospect of better jobs. For example, the Tortuguero National Park has generated enough tourism to offset the losses associated with reduced access to fishing grounds (Madrigal-Ballestero et al., 2017_[24]).

3.5.2. Management and effectiveness of protected area

Management of protected areas has improved since the mid-2010s, although with disparities across the ASPs and management categories. Many ASPs have conducted more activities for protection and control and the demarcation of the land area under protection. Since 2010, the “Forever Costa Rica” programme – a public-private initiative in collaboration with the NGO Asociación Costa Rica por Siempre – has supported many ASPs in developing their management plans and in monitoring the state of habitats and species. However, gaps remain with respect to financial and human resources, as well as goods and services for administrative and technical functions (CGR, 2020_[25]).

The development and systematic review of management plans for all ASPs and Ramsar sites should remain a priority to improve management effectiveness. As of 2020, 70% of protected areas had a management plan, up from 43% in 2010, which is in line with the ENB2 target. However, only half of protected areas have management effectiveness evaluations, below the ENB2 target of 70% by 2020. The quality and the details of management plans differ substantially across the ASPs (CONARE, 2022_[9]). SINAC’s Wetland Project, launched in 2014, helped define the national wetland inventory and the National Wetland Policy 2017-30. Thanks to the project, 9 of the 12 Ramsar sites have a management plan. However, only three had been approved and were under implementation at the time of writing.

The National Biological Corridors Programme aims to reduce forest fragmentation and increase connectivity between protected areas and ecosystems outside the ASPs. At the same time, it actively engages local communities in the management and sustainable use of natural resources. Local multi‑stakeholder committees are the management bodies of biological corridors. At the end of 2021, 51 biological corridors covered 38% of the land area. Six interurban biological corridors have been established since the introduction of this category in 2017. All such corridors are in the Greater Metropolitan Area around San José. They aim to improve connectivity between the ASPs and landscapes within neighbouring urban areas.

However, many corridors do not have the management tools to ensure their effectiveness in halting biodiversity loss. Local management committees were in place for 35 biological corridors; 28 corridors had adopted a management plan defining the priority of actions, targets and monitoring indicators, and 19 had evaluated their management effectiveness (SINAC, 2022_[26]). The areas bordering the ASPs, including biological corridors, experience the same trends in land-use change as areas with no protection beyond the usual environmental requirements such as EIA (Chapter 2). This is because spatial management outside an ASP is a municipal competence through land-use plans. However, PCRs are often lacking (Section 3.4); even when in place they do not generally consider biological corridors and do not restrict land use or land-use change in those areas (CONARE, 2022_[9]).

On the positive side, this shows that, despite some management weakness, the ASP system has controlled human pressures on land effectively. The intensity of pressures – including hunting, logging, extraction of flora and fauna, and agriculture – depends on the ASP location and management category. This is higher for the ASPs where some private activities are permitted. The ASPs in remote mountain areas are at lower risk of deforestation and other land-use changes. Nonetheless, irrespective of the management categories, land-use change is much lower within the ASPs than outside, including in biological corridors (CONARE, 2022_[9]). A specific payment mechanism could be established to compensate the conservation and sustainable management efforts of communities surrounding the protected areas.

3.5.3. Financial resources for protected areas

Protected areas have helped reduce biodiversity loss, while generating development opportunities and economic value. The ASPs were estimated to contribute USD 1.8 billion to the national economy in 2016, or 3% of GDP (Moreno Díaz and Villalobos Salas, 2019_[27]). This is more than three times the generous estimate of biodiversity-related public expenditure (0.8% of GDP per year in 2015-20) (Molina‑Escalante, 2021_[28]) (Section 3.7). This indicates the high economic returns from biodiversity‑related spending. About 78% of the ASP’s economic contribution is related to tourism, and 14% to the provision of water for hydropower generation. The ASP system plays other important roles not considered in the estimate. Primarily, the ASPs contribute to maintaining ecosystems that provide valuable services (Section 3.2.4). These include a climate mitigation role, as forests in large national parks are among the major carbon sinks (CONARE, 2022_[9]).

Costa Rica should make sure the ASPs are properly funded and staffed. Between 2015 and 2020, the SINAC budget averaged nearly CRC 40 billion (USD 71 million) and increased by about 5% per year. However, it was cut by 36% in 2021 as part of the government’s fiscal consolidation efforts. SINAC needs to improve implementation, as budget execution varied between 70-85% of annual allocations (Molina‑Escalante, 2021_[28]). The 2022 legislative proposal to consolidate MINAE (Chapter 2) also aims to establish a trust for improving the collection and management of SINAC’s financial resources. There is a need to ensure adequate human resources for the SINAC, in terms of quantity and training, including replacing a large part of staff about to retire. Due to understaffing, many activities on the ground within and outside the ASPs take place thanks to the co‑operation of civil society and NGOs. For example, the National Park Volunteers Association recruits foreign volunteers to work alongside park rangers.

Fees to access the ASPs are a major source of revenue for SINAC. In 2015-19, revenue from entrance fees averaged 24% of SINAC’s income. In 2011-19, this revenue increased considerably together with the number of visits to the ASPs, prior to a sharp decline in visits linked to the 2020 COVID-19 pandemic (Figure 3.8; Section 3.8). Four ASPs attract half of all visitors to protected areas and generated most of the revenue. About two-thirds of protected areas do not generate any revenue from tourism. All revenue accrues to SINAC and is redistributed to all the ASPs to help them cover their costs. The fees do not reflect visitors’ willingness to pay (WTP) and the operating costs for managing increasing tourist inflows (Hernández-Blanco, Pacheco-Jiménez and Elizondo-Barboza, 2020_[29]). For Costa Rica’s residents, fees vary between CRC 600 and CRC 1600 (about USD 1.0-2.5) for most ASPs.13 This is about the price range of a kilogramme of rice. As in many developing countries and emerging economies, entrance fees are much higher for foreign tourists, who pay between USD 5-15. Fees have not been updated for several years, not even adjusted to the consumer price index as required by law. This has caused substantial revenue losses. The official methodology for setting entrance fees dates to 2004 and has not been systematically implemented (Hernández-Blanco, Pacheco-Jiménez and Elizondo-Barboza, 2020_[29]).

Figure 3.8. More and more visits to protected areas have generated revenue for biodiversity

There is scope to review the entrance fees to increase cost recovery, as well as to use more tourism‑related fees (e.g. for diving and climbing) to raise revenue. Costa Rica should adopt a consistent methodology for fee setting, based on marginal costs and WTP, among other variables. At the very least, fees should be systematically adjusted for inflation as required by law. Increasing the fees for international tourists by just one dollar would increase revenue by 7% (Hernández-Blanco, Pacheco-Jiménez and Elizondo-Barboza, 2020_[29]). Costa Rica should also assess whether its dual pricing policy is fit for purpose.Generally, the price discrimination between local and foreign tourists recognises that residents have helped establish and manage protected areas through their general taxes, while foreigners often have higher income than locals and higher WTP (Apollo, 2014_[30]). However, WTP of Costa Ricans has likely increased with their per capita income. This dual policy effectively subsidises the wealthier population groups. The fees for residents could be gradually raised, with a view to converging with those for foreigners. Other forms of price discrimination based on age and socio-economic status could be introduced, as done in most OECD countries. Also, differentiating the fees between high and low seasons may help reduce pressure on fragile natural areas at peak tourism times.

The use of concessions for tourism-related services in the ASPs should be extended and made more efficient. The Biodiversity Law opens to concessions for non-essential services (SANE) in protected areas, such as restaurants, shops and parking. SANE concessions are a key tool to generate revenue (through concession fees) for the ASP system and improve the quality of tourism services, while contributing to the economic development of neighbouring communities. As of 2020, only 29 ASPs had analysed the economic viability of SANE concessions out of 61 ASPs where such concessions could be deployed. In the same year, there were only two active SANE concessions. The Office of the Comptroller General signalled some irregularities in contracts for tourism-related services, which often circumvent the bidding process required for concessions (CGR, 2020_[25]). In 2021, MINAE and SINAC, with the technical support of UNDP-BIOFIN, released technical guidelines for management of SANE concessions (BIOFIN‑PNUD, 2021_[31]). These should be systematically implemented to take best advantage of this financing mechanism.

The private sector can help expand and finance protected areas. Costa Rica has traditionally encouraged land donations and the creation of protected areas on private land through tax incentives such as exemptions from the property tax (Fabiano and Ahmed, 2019_[32]). National wildlife refuges – an official ASP category – can include private land (i.e. be set on a mix of state-owned and private land) or be established on exclusively private land. They can be established for renewable terms of 5, 10 or 20 years. In 2022, more than two-thirds of wildlife refuges were on “mixed” land, accounting for 12.5% of all terrestrial area in the ASPs. In the same year, 217 fully private reserves were outside the official ASP system and registered with the Costa Rican Network of Natural Reserves, falling short of the 2020 ENB2 target of 220. Private natural reserves cover about 2% of national territory. Several such reserves are owned and managed by NGOs, and conduct tourism activities, environmental education and scientific research. In some cases, these reserves are in buffer zones between larger state-owned protected areas, as in the case of the Monteverde Reserve (Box 3.1). Owners of private reserves or of land within national wildlife refuges can access the PPSA (Section 3.6).

Box 3.1. The Monteverde Cloud Forest Biological Reserve

The region of Monteverde has been one of the main ecotourism destinations in Costa Rica since the late 1980s. The highland region features cloud forests, coffee production and wildlife (including 100 mammal, 400 bird and 120 reptile species). The Tropical Scientific Centre – a non-governmental organisation dedicated to biodiversity research – has owned and managed the Monteverde Cloud Forest Biological Reserve since its establishment in 1972. It progressively expanded its coverage to more than 4 000 hectares. The reserve serves as a buffer zone between the state-owned Protected Zone of Arenal Monteverde and the Monteverde-Golf of Nicoya Biological Corridor.

The collaboration between the Tropical Scientific Centre and local communities has been essential for maintaining the biological richness of the reserve, while providing economic opportunities in tourism-related activities and environmental education.

Source: (Fabiano and Ahmed, 2019_[32]), https://cloudforestmonteverde.com/.

3.6. Reinforcing the programme of payment for ecosystem services

Costa Rica is a pioneer and world leader in the use of payment for ecosystem services (OECD, 2018_[10]). The long-standing national PPSA, in place since 1997, has been a key driver of forest coverage growth, together with the deforestation ban and the extensive protected area network. The programme, managed by FONAFIFO, pays landowners that commit to forest conservation, reforestation, regeneration of pastures, sustainable forest management or agroforestry on their lands, thereby contributing to providing ecosystem services.14 The PPSA recognises four forest-related ecosystem services: carbon sequestration, water provision, biodiversity (support to life and bioprospection) and natural scenic beauty.

The programme has largely contributed to restoring degraded forestlands and, to a lesser extent, preventing forest clearing (CONARE, 2022_[9]). It also contributed to increase carbon sequestration (Chapter 1). Of the 1.3 million ha covered by the PPSA since its inception, more than 560 000 ha were added in 2011-21, mostly under forest conservation contracts (Figure 3.9). In the same period, nearly 5 million trees were planted under the agroforestry mechanism. Two-thirds of the new area under the PPSA is within biological corridors, and about 28% is in national wildlife refuges that include private land. Between 1997 and 2021, the PPSA has paid more than USD 600 million to small and medium producers.

Figure 3.9. Less and less area is added to the PPSA every year

The programme has led to the creation of 3 500‑4 000 direct jobs each year (ILO, UNEP and IUCN, 2022_[33]). In so doing, it has provided income opportunities to small producers, women and indigenous communities. This is in line with the Gender Action Plan of the REDD+ strategy (Box 3.2). The PPSA could further engage women and indigenous communities. Women accounted for some 15% of beneficiaries of the new PPSA contract in 2011-21, and Indigenous Peoples for less than 2% (Figure 3.9).

FONAFIFO has been active in mobilising finance for the PPSA, through private donations, international co‑operation and carbon credits produced through forest plantations and REDD+. However, the PPSA funding remains highly dependent on fuel tax revenue, which is expected to decline with the progressive decarbonisation of transport (Chapter 2). A 3.5% share of annual fuel tax receipts is ring-fenced for the programme and accounts for nearly 90% of its funds. The remainder comes from 25% of the revenue from the Water Utilisation Levy, a tax on timber value, other charges and carbon credits.

Between 2015 and 2021, the new area registered with the PPSA declined (Figure 3.9), partly due to decreasing fiscal transfers to FONAFIFO. This corresponded to a decline in reforested area per year (CONARE, 2022_[9]). Since 2016, FONAFIFO has consistently received less than the amount due based on fuel tax revenue. In 2020, it suffered an additional cut due to the pandemic-related drop in fuel use and associated tax revenue. This shows vividly the impact that transport decarbonisation will have on the PPSA funding and area coverage, as well as on the capacity to monitor landowners’ compliance with the programme requirements. As recommended by OECD (2023_[34]), new financing sources should be mobilised, with a view to reducing the programme’s reliance on fuel tax revenue.

UNDP-BIOFIN proposed extending the PPSA to other ecosystems beyond forests and improving its governance. Other ecosystems would include mangroves, agricultural areas, wetlands, coral reefs, estuaries and open seas, in recognition of additional services such as water and food provisions, air quality regulation, erosion prevention and pollination (Hernández-Blanco, 2020_[35]). This would be in line with the high value of these ecosystem services (Section 3.2.4). MINAE has been working to include other ecosystems in the PPSA, in consideration of the goals of the National Decarbonisation Plan 2018-50 (Chapter 1) and the need to broaden the financing mechanisms for biodiversity.

Box 3.2. Improving women’s participation in biodiversity-based activities

Strengthening the role of women in biodiversity conservation can help achieve better environmental results and improve income distribution, as women in rural communities tend to be poorer than men. About 12 600 women are food producers, but they own only 15.6% of all farms and 8% of the total agricultural area. In addition, women have often inherited knowledge of the use of nutritive and medicinal plants. However, women’s participation in decision-making process linked to biodiversity remains limited. In 2018, women represented only 28% of the National Council of Protected Areas, only 32% in Local Councils of Conservation Areas of marine areas and there was no representation of women in the Local Forest Councils.

Several multi-stakeholder initiatives aim to support women’s participation in biodiversity-related activities, in recognition of their key social role in local and indigenous communities in Costa Rica. The Gender Action Plan of the National Strategy REDD+ aims to strengthen the role of women in biodiversity conservation and close the employment and income gaps in the forest sector. The +Women +Nature Programme, co‑ordinated by MINAE and UNDP’s Biodiversity Finance Initiative (BIOFIN), facilitates women’s access to financial instruments. As part of the programme, between 2020 and 2021, three financial instruments worth around USD 30 million granted access to woman in biodiversity activities usually monopolised by men. The Foundation for Development (Fundecooperacion para el Desarrollo) together with the National Institute for Social Welfare’s Trust Fund (FIDEIMAS) launched the “Women Natura Credit”, which grants private capital loans for rural women to launch their ventures. Projects led by women have preferential scores in accessing the PPSA. In addition, FONAFIFO provides concessional credits for women to develop projects related to forest conservation and/or sustainable use.

Source: (World Bank, 2019_[36]); (BIOFIN, 2021_[37]).

Costa Rica should swiftly approve the draft legislation on reinforcing the PPSA that was submitted to Parliament in April 2022. The bill proposes extending the PPSA to a fully-fledged programme of Payment for Ecosystem Services (PSE). To that end, it would transform FONAFIFO into a sort of natural capital trust (National Fund for Financing Ecosystem Services) for financing the conservation and restoration of all ecosystem services. The bill also proposes a biodiversity offset system, whereby public and private stakeholders could mitigate or compensate for the environmental impact of their activities by purchasing “natural capital credits”. The National Fund would use the proceeds of the credits to finance conservation and restoration activities. These are all welcome proposals. However, while the draft legislation broadens the funding sources to the PSE, it still uses an inefficient earmarking logic that may hamper the long-term financial sustainability of the extended programme. In addition, the details of the new PSE programme will have to be carefully defined in implementing regulations.

3.7. Scaling up finance for biodiversity

Costa Rica’s public spending on biodiversity conservation and sustainable use is relatively large in international comparison, reflecting the country’s policy emphasis. According to estimates, biodiversity‑related spending averaged between 0.6% and 0.8% of GDP per year in 2015-20 (Molina‑Escalante, 2021_[28]).15 This included spending directly linked to the protection of biodiversity and landscape and expenditures with biodiversity conservation as a co-benefit or secondary purpose. The average biodiversity-related spending in 2015-20 is double the amount of total public spending in all environmental protection domains based on the Classification of the Functions of Government (COFOG) of the national accounts (Chapter 2).

As in other sectors of public administration, there is a need to reinforce the capacity of institutions dealing with biodiversity to spend their budget effectively and carry out their functions (Chapter 2). Indeed, a large part of the estimated biodiversity-related budget was not spent in 2015-20. This includes unspent budget for wastewater treatment (Molina-Escalante, 2021_[28]).

More conservative calculations based on COFOG indicate that public expenditures directly linked to the protection of biodiversity and landscape averaged about CRC 33 950 million (USD 62.4 million) per year. This represented 0.1% of GDP and 25% of total public environmental spending in 2012-19 (OECD, 2023_[38]).16 Spending directly linked to biodiversity declined (in real terms) in the same period. Despite a recovery, in 2019 it was still 18% below the 2012 level (Figure 3.10). The central government spends nearly 95% of biodiversity-related expenditure, mainly through its decentralised institutions such as SINAC, CONAGEBIO and FONAFIFO. Investments represent a negligible part of total public expenditure in biodiversity, although they increased slightly in 2016-19.

Figure 3.10. After a decline, expenditure for protecting biodiversity and landscape increased in 2017-19

Public budget allocations do not seem commensurate with the objectives Costa Rica set for itself and are focused on covering current spending (such as staff costs). Costa Rica is not on track to achieve the ENB2 target of increasing investment in biodiversity to 0.8% of GDP by 2025. Human resources for biodiversity management are insufficient. As in other Latin American countries, this impairs protected area management, enforcement of environmental law and monitoring of biodiversity status (OECD, 2018_[10]). The objectives of the ENB2 have been mainstreamed in the PNDIP 2023-26. However, the funding gap is estimated at USD 90 million per year (0.18% of GDP) for 10-15 years (MINAE, CONAGEBIO and SINAC, 2023_[13]).

One of the key ENB2 goals is scaling up finance for biodiversity and improving spending efficiency. Financing for biodiversity comes from a variety of fiscal sources. Part of the revenue from fuel taxes, water‑related charges and stamp duties is earmarked for the institutions with environment-related responsibilities.17 In particular, a share of the fuel tax revenue finances the PPSA (Section 3.6). Except for fuel taxes, revenue is negligible. A comprehensive green tax reform would help raise revenue to finance biodiversity management, among other purposes (Chapter 2). Priority should be given to removing subsidies harmful to biodiversity, including for agriculture and fishing (Sections 3.10 and 3.11), in line with the GBF Target 18.18 The fiscal savings could be partly redirected to finance biodiversity policy. Reforming entrance fees to the ASPs (Section 3.5.2) and charging fees to tourism companies (Section 3.8) would provide additional revenue.

Development finance is also a significant resource for biodiversity. In 2012-19, bilateral donors that are members of the OECD Development Assistance Committee disbursed USD 26.5 million for projects targeting biodiversity as principal or significant objective in Costa Rica (OECD, 2023_[39]). This corresponds to an average of USD 3.3 million per year, or roughly 5% of the annual government expenditure on protection of biodiversity and landscape in the same period. This amount underestimates official development flows related to biodiversity as it does not consider assistance from multilateral organisations and other official flows.

Costa Rica could further build on its experience with conservation trust funds, debt-for-nature swaps and green bonds.19 FONAFIFO and the NGO Asociación Costa Rica por Siempre are members of the Network of Environmental Funds in Latin America and the Caribbean (RedLAC). The Sustainable Biodiversity Fund (FBS), established in 2010, is a conservation trust fund managed by the National Bank of Costa Rica. With assets of USD 25 million, the FBS supports the Biodiversity Conservation Programme, which provides financial and technical support to landowners for sustainable economic activities on their land. The use of conservation trust funds could be extended. Green bonds can be used to attract finance for investment in biodiversity conservation, environment-related infrastructure and NbS for adaptation to climate change (Chapter 2). At the time of writing, the government was working, with the support of UNDP-BIOFIN, to issue a green bond for securing funds for investing in infrastructure in protected areas.

Actions to reduce carbon emissions from deforestation and forest degradation (REDD+) have vast fund‑raising potential. In 2022, Costa Rica became the first country in LAC to receive payments from the Carbon Fund of the Forest Carbon Partnership Facility for reducing GHG emissions in 2018-19. Costa Rica is on track to unlock up to USD 60 million for cutting up to 12 megatonnes of carbon dioxide emissions by 2025 through actions in the forest sector (World Bank, 2022_[40]). The PPSA and protected areas are key tools for implementing the national REDD+ strategy and reaching net zero by 2050 (Chapter 1). Blue carbon credits from conserving and restoring coastal ecosystems such as mangroves are also a source of potential finance. In 2022, Costa Rica participated, along with more than 50 governments, NGOs and private partners, in establishing the Global Blue Carbon Coalition to accelerate investments in coastal carbon sinks. It also presented its National Strategy for Blue Carbon.

There is much scope to engage the business sector, including through more use of private-public initiatives such concession contracts for tourism-related services in protected areas, land donation and establishing private nature reserves (Section 3.5.2). Businesses spend little in biodiversity conservation. In 2018‑20, they spent less than 1% of their total expenditure on environmental activities (Chapter 2). The National Bioeconomy Strategy 2020-30 promotes equitable use of genetic and biochemical resources as a driver of innovation and business opportunities (Box 3.3).

Box 3.3. Costa Rica’s approach to access and benefit sharing

Costa Rica has put in place a coherent system for regulating access to its genetic resources and ensuring a fair sharing of benefits arising from their use (or access and benefit sharing, ABS). CONAGEBIO oversees access to genetic and biodiversity resources and releases the related permits. Use of genetic and biochemical resources is conditional to prior informed consent and mutually agreed conditions with local producers to share the benefits of the research and commercialisation of the products using such resources. Since 2016, seven companies have been granted this permit and have concluded contracts for benefit sharing. This is second in the world after Colombia, which has granted nine such permits.

In 2018, Costa Rica launched the Distintivo ABS, a label certifying that a product using the country’s genetic resources complies with the ABS regulations and good practices. This is a first for Latin America. Since 2021, six products have obtained the ABS certification.

However, an agreement on access to, and use of, genetic resources in indigenous territories and on the preservation of indigenous practices and knowledge, is still pending. This has impeded the ratification of the Nagoya Protocol on ABS, which entered into force in 2014.

Source: (CONAGEBIO, 2023_[41]).

3.8. Mainstreaming biodiversity considerations in tourism policy

3.8.1. The strong nexus between biodiversity and tourism

Tourism is well developed and a major driver of economic growth in Costa Rica. In 2021, the country had the fourth highest score of the World Economic Forum’s Travel and Tourism Development Index among LAC countries (after Chile, Mexico and Brazil). This is the result of a long-standing emphasis on investing in the sector and promoting the country’s brand abroad (WEF, 2022_[42]). COVID-19 hit the sector strongly. In 2019, before the pandemic, tourism accounted for 4.8% of GDP, nearly 8% of formal employment and 37% of service exports (well above the OECD average of 20.5%). Tourism recovered in 2021 but not to its pre-crisis level. In 2021, international tourist arrivals were 1.3 million compared to more than 3.3 million in 2018-19, equivalent to about 60% of the country’s population (OECD, 2022_[43]). Costa Rica expects international visitors to return to pre-pandemic levels by 2024.

Costa Rica’s long coastlines and rich biodiversity are the main tourist attraction. In 2017-19, 72% of travellers to Costa Rica visited the country to enjoy its beaches and 65% to engage in nature-based activities (such as visiting volcanos and observing flora and fauna) (ICT, 2022_[44]). Natural protected areas have been a driver of Costa Rica’s success as tourist destination, generating income and jobs (Section 3.5). In 2011-19, the number of visitors to the ASPs increased by 50% to about 2 270 000 (Figure 3.8). Tourism contributes to generate financial resources for biodiversity conservation through ASP entrance fees and concessions for tourism-related services, whose revenue goes to the SINAC budget (Section 3.5). At the same time, the management of growing flows of tourists in fragile natural areas requires more resources. Tourism is highly seasonal in Costa Rica and concentrates in relatively few areas of the country. This is also where most road infrastructure and accommodation services are located (the Pacific coast, South Caribbean coast, the Central Valley and the protected areas in the centre-north of the country).

Massive tourist flows concentrated in a few months and areas have exerted pressures on ecosystems and species, within and outside the ASPs. In addition to direct disturbances to fauna and flora,20 pressures include increased sewage and waste flows in coastal and mountain areas, where treatment infrastructure and services are insufficient even for residents (Chapter 1). This results in pollution of rivers, beaches and oceans. Continued unregulated development of tourism infrastructure and residential areas is of concern, especially in coastal areas (Section 3.4). In many cases, road and electricity networks have been extended to provide accessibility and services to natural areas without the necessary mitigation measures. This has negatively impacted charismatic fauna species, such as sloths, armadillos and monkeys, which have been run over or electrocuted (CREST, 2010_[45]).

Like other megadiverse tourism destinations, Costa Rica needs to balance the challenge of developing infrastructure with maintaining the integrity of ecosystems and their accessibility to the public (Echeverri et al., 2022_[46]). As recognised by the ENB2 and other government policy documents, addressing tourism pressures on ecosystems primarily requires completing land-use planning and ensuring that territorial plans consider biodiversity (Section 3.4). It is also essential to improve the treatment of waste and wastewater (Chapter 1).

3.8.2. Policies and actions for sustainable tourism

Costa Rica tourism policy has long recognised the key role of a healthy biodiversity for the competitiveness of tourism, as well as the potential negative impact of the sector on ecosystems and species. The ITC’s National Plan for Tourism of Costa Rica 2022-27 explicitly prioritises sustainable tourism and the conservation of natural sites. For more than a decade, SINAC has run a tourism programme to improve infrastructure and tourism services in the ASPs in collaboration with municipalities, promote tourism in selected priority areas and increase tourism-related revenues to contribute to protected area management (Section 3.5.2).

The country has branded itself as an ecotourism destination, including through voluntary certification and labelling schemes, such as the country’s brand “Essential Costa Rica” (Chapter 2), the Ecological Blue Flag (BAE) for beaches and the Certification for Sustainable Tourism (CST) (OECD, 2023_[47]) (Box 3.4). Costa Rica should consider assigning the audit for the CST and BAE to accredited bodies, as done for the country’s brand. This would guarantee that certification procedures meet international principles for transparency, impartiality and competence, thereby further consolidating their credibility. Costa Rica could consider levying fees on tourism companies to recognise the benefits they receive from a preserved nature and use the revenue to finance biodiversity conservation. Peru has a similar scheme for companies operating in the Manu National Park (OECD, 2018_[10]).

Several initiatives have sprung up to reduce the negative environmental impact of tourism development. Many such initiatives involve public institutions in partnership with tourism business organisation and/or companies, local communities, academia and NGOs. For example, some tourism companies have led initiatives to repopulate coral reefs. The ICT and FONAFIFO launched a tool to calculate and voluntarily offset GHG emissions of international flights, with proceeds used for financing the PPSA. The government‑led “#stopanimalselfies” campaign aims to break tourists’ habit of taking selfies and photos in direct contact with wild animals, which is cruel to animals and risky for people (Stop Animal Selfies, 2022_[48]). Raising awareness of tourists and tourism companies is essential to achieve better conservation outcomes (Echeverri et al., 2022_[46]).

Box 3.4. Tourism-related certification programmes

In 2018, Costa Rica restructured and updated the Certification for Sustainable Tourism (CST), launched in 1997, to address some weaknesses and adapt it to new international standards (OECD, 2022_[43]). The Global Sustainable Tourism Council recognised the renewed CST as compliant with its criteria for sustainable tourism. The certification is based on business, social and environmental criteria, including a company’s energy efficiency, water, wastewater and waste management, and actions towards biodiversity conservation, pollution reduction and climate change mitigation and adaptation.21 The CST is voluntary and lasts two years. To encourage companies to seek certification, the CST procedure is free of charge and companies earn benefits such as information on environmental good practices, promotional material and marketing support (OECD, 2022_[43]). The ITC verifies that applicants meet the requirements for certification. The CST is awarded by a technical commission composed by representatives of ICT, MINAE, Ministry of Culture and Youth, National Chamber of Tourism and/or National Chamber of Ecotourism and Sustainable Tourism. At the end of 2021, 216 organisations were CST-certified, mostly hotels (ICT, 2022_[21]). At the time of writing, three ASPs (the national parks of Carara, Manuel Antonio and Volcán Poás) were also CST-certified.

The Ecological Blue Flag (BAE) for beaches, launched in 1995, recognises beaches that meet certain ecological criteria. It also aims to engage local communities, including tourism businesses, in the sustainable management of the coastal area. The BAE is awarded by a national commission composed of representatives of 15 public and private entities, including ICT, MINAE, the Institute of Aqueducts and Sewers, the ministries of agriculture, health and education, National Chamber of Tourism, National Union of Local Governments, and Institute for Municipal Development and Advisory. The certification was extended to certify climate mitigation actions undertaken by industrial businesses (Chapter 2). At the time of writing, 140 beaches were BAE-certified, mostly with one of a maximum of five stars (ICT, 2022_[21]).

Source: (ICT, 2022_[21]; OECD, 2022_[43]).

3.9. Mainstreaming biodiversity considerations in farming practices

Costa Rica’s agriculture is productive and export-oriented, accounting for about 5% of GDP and 12% of employment in 2020. The country is the largest global producer of pineapple, and a major exporter of bananas and coffee. Productivity levels in agriculture in Costa Rica are twice as high as in other Central American economies (Roosendaal et al., 2021_[49]). However, land conversion to pastures and cropland grew in the second half of the 2010s (CONARE, 2021_[5]). Unsustainable monocultures and uncontrolled use of agrochemicals have degraded soil, polluted water, and damaged aquatic ecosystems and species, as well as human health (Roosendaal et al., 2021_[49]; OECD, 2023_[47]). The agricultural sector is also the largest consumer of water in the country. Costa Rica continues to have higher nutrient balances for nitrogen and phosphorus than the respective OECD averages (OECD, 2022_[50]).

The intensity of pesticide use declined by 26% between 2010 and 2018. However, by 2020, it was slightly higher than at the beginning of the decade. At 8 kg/ha of agricultural land, Costa Rica has among the highest intensity of pesticide use among OECD and LAC countries (Figure 3.11). Many of these pesticides are highly hazardous and have not been assessed for environmental risk since their first registration in Costa Rica. In many cases, this dates back several years (Vargas Castro, 2021_[51]). A new regulation on the environmental risk assessment and approval of agrochemicals entered into force in early 2023. It streamlines and improves a complicated registration process for new agrochemicals, which had resulted in a lack of new registered pesticides over the last ten years. The new regulation aims to ensure all pesticides are submitted to an appropriate environmental risk assessment. The country should also remove from the market those that exceed acceptable hazard levels for ecosystems and human health.

Figure 3.11. Intensity of pesticide use is one of the highest among OECD and LAC countries

The agricultural policy framework, as set by the 2019-22 Policy Guidelines for the Agricultural, Fishing and Rural Sector, includes a cross-cutting focus on climate change and preparedness to natural disasters. The first priority axis of the National Bioeconomy Strategy 2020-30 aims to promote environmentally sustainable and low-carbon farming and fishing. The Sustainable Landscape Initiative 2022-30 foresees maintaining zero-net deforestation in agricultural landscape, reducing use of agrochemicals in agriculture and implementing good agricultural practices (Chapter 1). These actions are expected to help curb GHG emissions from agriculture, forestry and other land-use sectors but will also benefit biodiversity.

The government and the private sector have developed several initiatives to address the adverse environmental impacts of farming. These include promoting good agricultural practice through guidance and capacity building (e.g. for pineapples, bananas and sugarcane) and Buenas Prácticas Agrícolas, the voluntary certification programme. The Agricultural Extension Programme led to almost 4 000 models of sustainable production in the country’s main agricultural activities through various initiatives, including training and capacity building for producers (OECD, 2023_[47]).

The Nationally Appropriate Mitigation Actions (NAMAs) for coffee and livestock production were launched in 2013 and 2015, respectively, in collaboration with the private sector and international partners. In 2022, in line with the National Decarbonisation Plan 2018-50, Costa Rica was piloting additional NAMAs to cover all the main production sectors (sugar, rice and musaceae). Within the NAMA framework, the government provides training and technical assistance to public servants, farmers and producers. The NAMAs focus on reducing GHG emissions from farming, but they also identify technologies and practices that help agriculture adapt to climate change and minimise the impacts on biodiversity and water. These include reducing fertiliser and pesticide use (Chapter 1).

Costa Rica has been an early mover in the field of organic production, with the first related law passed in 1995. However, organic production remains marginal. Less than 1% of total agricultural area was under organic farming in 2020, compared to the OECD average of 4.8% and the LAC average of 2.4% (FAO, 2023_[52]). Organic farming faces several barriers, including insufficient technical assistance and innovation, and the high cost of certification and organic fertilisers. Small-scale organic farmers encounter difficulties in accessing international markets and receiving price premiums for their organic products.

Costa Rica’s agricultural support for producers has declined since 2000 and is relatively limited. It amounted to 4.9% of gross farm receipts in 2019-21, well below the OECD average. It includes support to advisory services and innovation, with significant emphasis on environmental protection. Farmers also receive payments for practices such as the use of green or living fences and terraces, organic production or soil condition improvements.

Progress has been made in reducing market-price support to rice by eliminating the reference price and reducing import tariffs. Ultimately, this would also facilitate access to basic goods at lower prices, benefiting low-income households (OECD, 2023_[34]). Prior to this move, in 2019-21, 89% of support was based on market-price support (through border tariffs and minimum reference prices).22 This is one of the most production-distorting forms of support and, therefore, can increase pressures on natural resources (OECD, 2022_[50]). In addition, sales of agricultural inputs, such as fertilisers and pesticides, have long benefited from a total sales tax exemption, which has encouraged their use. In 2018, this was replaced by a nearly full exemption from the value added tax.23

The government should phase out market-price support and subsidies to agrochemicals. It could replace them with time-bound payments targeted to producers in need and/or redirect support to incentivise environmentally beneficial practices. In addition, Costa Rica could consider a tax based on the amount of active ingredients in pesticides, as well as one based on the quantity of nitrogen and phosphorous in chemical fertilisers, following the example of other countries (UNEP, 2020_[53]).

3.10. Mainstreaming biodiversity considerations in fishing

Fishing and aquaculture represent a low share of Costa Rica’s GDP and employment.24 Nonetheless, fishing has high social value and is a major source of income for artisanal fishers in the rural and isolated communities in coastal areas (UNCTAD, 2019_[54]). The 24 coastal cantons that depend highly on fishing are among the poorest in Costa Rica. Overexploitation of coastal fisheries, as well as invasive alien species such as the voracious lionfish, led to a drop in the volume, size and market value of the catch of small-scale fishers in the last decade, which has affected the livelihood of traditional fishers. Offshore pelagic fisheries generate most catches and revenues. These species, including tuna, are mainly captured by foreign vessels licensed to operate in Costa Rican waters (World Bank, 2020_[55]). Between 2010 and 2020, tonnes of marine capture increased by 88%. Small-scale fisheries are estimated to account for about 10% of total landings (wild capture).

The status of fishery resources in Costa Rica is uncertain. The country has not recently assessed the biological sustainability of fish stocks, which is the basis for the sustainable management of fisheries. As of early 2023, such assessment was ongoing. Fishery resources are estimated to be overexploited within the first 20 km along the coasts. High-capacity fishing gear with low selectivity and harvesting during reproductive seasons threatens several marine species and habitats (MINAE et al., 2018_[1]). In addition, as in other countries, ghost gear (i.e. lost, abandoned or discarded at sea) causes the unintended capture of marine fauna, abrasion and smothering of the seabed, and generates marine litter. Fishers are obliged to report lost gear so it can be subsequently located and recovered. However, more could be done to control ghost gear by adopting best international practices such as gear marking; creating disposal facilities at port; and introducing extended producer responsibility for fishing gear (especially when made of plastics) (OECD, 2022_[8]).

Costa Rica adopts regulatory tools to manage fisheries’ stocks. These include limits to fishing licences and days at sea and restrictions on fishing practices to manage fisheries’ stocks. None of the five commercially important species of fish stocks, including tuna, are subject to total allowable catch limits, i.e. time-bound limits set on the quantity of fish that can be caught or landed by the fishery (OECD, 2023_[56]). Licensing of fishing rights for small-scale fishers has started but is incomplete, with many fishers operating illegally. The government adopted regulations for monitoring the tuna captured with and without mortality of dolphins, as well as to prohibit the fishing or unintentional capture of hammerhead sharks. As of 2020, it was developing three fisheries management plans (OECD, 2021_[57]). In 2021, Costa Rica launched the Pura Vida label to certify sustainably caught and processed fish and seafood.

In 2008, Costa Rica introduced a voluntary area-based management tool – the Marine Area of Responsible Fishing (AMPR) – where small-scall fishers commit to comply with sustainable fishing requirements and participate in the zoning, management and vigilance of fisheries. Each AMPR establishes its management plan and code of responsible fishing conduct. As of early 2023, 13 AMPRs had been established, mostly in the Gulf of Nicoya. The experience of the first AMPRs showed benefits for small-scale fishers, which became more involved in the conservation of the marine resources they exploit. However, the environmental benefits of the AMPRs were less clear (Fargier, Hartmann and Molina-Ureña, 2014_[58]).

Fishing is heavily subsidised in Costa Rica. Support to fisheries was 35% of the value of landings in 2018‑20, the fifth highest share in the OECD (OECD, 2022_[8]). While nominal support to fishery doubled between 2010-12 and 2018-20, the country has made progress in reducing support that can lead to harmful environmental outcomes. Indeed, growing support was provided to management, monitoring, control and surveillance, as well as education and training. These can help improve the efficiency and sustainability of the sector and maintain coastal employment (Figure 3.12). However, in 2018-20, 46% of fishery support was still targeting fishing inputs, through tax exemptions and price discounts on fuel use and other subsidies that lower input costs. The excise tax exemption on fuel used in fishing is 14% of all revenue losses due to the exemptions from the fuel duty, the second highest item (Chapter 2).

Figure 3.12. Potentially harmful support to fishing declined in the last decade but remains high

Costa Rica should continue to remove fishery support linked to input use, primarily fuel use, as such support can encourage unsustainable fishing in the absence of effective fisheries management. It is also more likely to increase illegal fishing, resulting in higher impacts on marine species and ecosystems, as well as higher GHG emissions (OECD, 2022_[8]). Support that lowers input costs is generally not effective at raising fishers’ incomes and tends to disproportionally benefit large fuel-intensive fishing companies. In so doing, it reduces the competitiveness of smaller-scale fishers, making them worse off. Financial resources saved from subsidy reform could be repurposed for targeted direct income support to fishers in need and for improving the environmental sustainability of fishing more generally. To that end, Costa Rica could provide financial support to sustainable fisheries management, enforcement and improved knowledge about the pressures on fish stocks and the impact of fishery policy on marine biodiversity. As recommended by OECD (2022_[8]), the government has been working towards the acceptance of the 2022 World Trade Organization Agreement on Fisheries Subsidies to eliminate some of the most potentially harmful types of subsidies. These are defined as those that benefit illegal, unreported and unregulated fishing; fishing of overfished stocks; and fishing in unregulated high seas.

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Notes

← 1. The Central Valley is a broad, flat plain located at an altitude of between 800 and 1 500 metres above sea level.

← 2. Egg harvesting and hunting of adult green turtles for food provision represents one of the strongest threats, as does the use of dolphin meat as shark bait.

← 3. Due to information constraints, this value excludes the evaluation of ecosystem service provided by rivers (Hernández-Blanco and Costanza, 2021_[11]).

← 4. CONAC comprises the environment minister, the executive directors of SINAC and CONAGEBIO, the directors of each conservation area and one representative of each regional council.

← 5. Other international agreements include the Convention on International Trade in Endangered Species of Wild Fauna and Flora and the Convention to Combat Desertification and the Ramsar Convention on Wetlands.

← 6. For more information: https://raicescr.com/english.

← 7. Target 1 of the GBF states, “Ensure that all areas are under participatory integrated biodiversity inclusive spatial planning and/or effective management processes addressing land and sea use change.”

← 8. The protected areas management categories are marine management area, absolute nature reserve, biological reserve, national park, wetland, national monument, forest reserve, protective zone and national wildlife refuge. There are no areas established under the category of “urban natural parks” (PANU), which was introduced in 2021 to address the specific pressures on ecosystems within urban areas.

← 9. Target 3 of the GBF states “Ensure and enable that by 2030 at least 30 per cent of terrestrial, inland water, and of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem functions and services, are effectively conserved and managed through ecologically representative, well-connected and equitably governed systems of protected areas and other effective area-based conservation measures.”

← 10. According to the CBD’s definition, an OECM is a “a geographically defined area other than a protected area, which is governed and managed in ways that achieve positive and sustained long-term outcomes for the in situ conservation of biodiversity, with associated ecosystem functions and services and, where applicable, cultural, spiritual, socioeconomic, and other locally relevant values”.

← 11. The terrestrial ecoregions of Costa Rica are: Central American dry forests; Cocos Island moist forests; Costa Rican seasonal moist forests; Isthmian-Atlantic moist forests; Isthmian-Pacific moist forests; Mesoamerican Gulf-Caribbean mangroves; Southern Mesoamerican Pacific mangroves; Talamancan montane forests.

← 12. The EBSAs off Costa Rica’s Caribbean cost, and fully in under country’s jurisdiction, are Cahuita – Gandoca and Tortuguero – Barra del Colorado.

← 13. Fees are higher for the national parks Chirripó and Isla del Coco.

← 14. The forest conservation requires required owners to protect existing forest for five years. Under the reforestation scheme, landowners commit to plant trees in abandoned cleared lands and maintain them for 15 years. The sustainable forest management contract requires having low-intensive logging while maintaining ecosystem services for the logged forests. The agro-forestry scheme allows small-scale landowners to combine agriculture activities and forest conservation.

← 15. The lower end of the range refers to the annual average of biodiversity-related expenditure executed by decentralised institutions. The upper bound is the average sum of expenditure executed by central government ministries and decentralised institutions. The upper bound is a likely overestimation, as it includes transfers from the central government to the decentralised institutions such as FONAFIFO and SINAC.

← 16. “Protection of biodiversity and landscape” is an expenditure category under the national accounts COFOG.

← 17. Stamp duties include the Wildlife Stamp on vehicles and the National Park Stamp on passports. Proceeds are earmarked to MINAE Wildlife Directorate and SINAC, respectively.

← 18. The GBF Target 18 states, “Identify by 2025, and eliminate, phase out or reform incentives, including subsidies harmful for biodiversity, in a proportionate, just, fair, effective and equitable way, while substantially and progressively reducing them by at least 500 billion United States dollars per year by 2030, starting with the most harmful incentives, and scale up positive incentives for the conservation and sustainable use of biodiversity.”

← 19. A trust fund generally collects resources from international donors, states or private sector stakeholders enabling them to generate, through diversified investments, a financial return paid back in the form of grants to protected areas or NGOs that act in favour of biodiversity conservation.

← 20. These range from irresponsible habits (e.g. throwing waste in nature, harvesting of flora species, touching wild animals, anchoring of boats on reef areas) to unintended consequences of some leisure activities. For example, lighting of beaches and boats can affect the orientation of sea turtles during nesting; acoustic pollution can harm the communication and orientation capacity of cetaceans.

← 21. The CST has two levels – basic and elite. Organisations that meet all the mandatory requirements have the basic certification. The elite level is for organisations that commit to continuous improvement and positive spillovers.

← 22. Market-price support is defined as the “monetary value of gross transfers from consumers and taxpayers to agricultural producers arising from policy measures that create a gap between domestic market prices and border prices of a specific agricultural commodity, measured at the farm gate level” (OECD, 2022_[50]).

← 23. A reduced value added tax rate of 1% applies to agricultural input, compared to the standard rate of 13%.

← 24. In 2020, fish production from fishing and aquaculture was USD 103 million, or less than 0.5% of GDP.

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