A Sustainable Solution

Environmental tax to maintain forests in Costa Rica

Costa Rica

Duration: 6:32

Available in 5 languages

Released: June 2015

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Girl besides flowers, Environmental tax to maintain forests in Costa Rica - If Not Us Then Who?

Imagine communities and land-owners being paid by the government to protect their forests & natural resources? Costa Rica is the only tropical country in the world that has reversed the process of deforestation through a unique fuel tax law that impresses the importance of protecting the environment & helping develop communities.

  • Interesting facts & key figures

    • The Cabécar people are the second most numerous indigenous people in Costa Rica after the Bribri. According to the 2011 census they have a population of 17,000, living in 6 territories, one of which is Talamanca Cabécar. The Association for the Integral Development of the Indigenous Reserve Talamanca Cabécar (ADITICA) was constituted in 1985 with the objective of contributing to the economic, social and cultural development of the Cabécar population of Talamanca.
    • Costa Rica experienced one of the highest rates of deforestation worldwide during the 1970s and 1980s. Deforestation was principally driven by inappropriate policies including cheap credit for cattle, land-titling laws that rewarded deforestation, and rapid expansion of the road system
    • Costa Rica’s Payment for Environmental Services (PES) Program was launched in 1997. It provides financial compensation through FONAFIFO, a semi-autonomous agency,  to forest and forest plantation owners for environmental services including:
      • Mitigation of greenhouse effect gas emissions.
      • Hydrological services to protect water.
      • Protection of biodiversity for conservation and sustainable use for scientific purposes.
      • Protection of scenic beauty, for both the tourist industry and scientific purposes.

    It is primarily financed by a tax on fossil fuel sales (originally 5%, later 3.5%). Since 2003, indigenous communities began to be accepted in PESP, land titles ceased to be required, and collective contracts with small landowners’ associations became a priority goal.

    • In the 1970s Costa Rica had started a subsidy program for timber plantations through tax rebates, because of concerns over shrinking timber supplies. In 1986 the Forest Credit Certificate expanded it to support forest conservation as well as timber production. The PES program built on the base of this payment scheme, but payments would reward the provision of environmental services instead of timber and financing would come from an earmarked tax and payments from beneficiaries rather than the government budget.


Investment and direct access to finance for communities is vital to ensure good education, healthcare and rural development. If communities are to look after our forests then we should compensate them.

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