Tuesday, December 6, 2011

Costa Rica under the World Bank's Forest Carbon Partnership Facility (REDD+)

Costa Rica is currently developing its national REDD+ strategy. It has developed a Readiness Preparation Proposal (R-PP) under the World Bank’s Forest Carbon Partnership Facility (FCPF). This fits within a broader low carbon development strategy which has an objective for carbon neutrality by 2021. The emerging REDD+ strategy is closely tied into the existing payments for environmental services (PES) system. PES has been an effective REDD+ instrument because it has helped in reordering land uses at the landscape level.

Forest cover has increased from 42% to 52% between 1997 and 2008, and PES has contributed to reducing deforestation in the areas where funds have been concentrated. It should be noted that it is difficult to determine exactly how much of this can be attributed to the PES scheme or to other socioeconomic factors. Factors such as low agriculture and cattle prices, a blooming tourism industry, a growing services and real estate industry, higher levels of education and environmental conscience, and other structural factors such as clear land rights, have helped PES to have such positive impacts.

Early efforts such as the PES policy have already contributed towards the goal of carbon neutrality and have resulted in historic emissions from the sector over the last ten years that are negative. This means that Costa Rica could find it difficult to benefit from a REDD+ system that rewards reductions in deforestation and degradation rates, if rewards do not take into account such early actions. However, in order to reach a goal of carbon neutrality by 2021 in the face of rising emissions in other sectors, it is also likely to be necessary to expand the PES system. In such an expanded scenario the forest sector could contribute around 65% to the carbon neutrality effort.

The Costa Rican PES system offers interesting insights into the structuring of financial incentive mechanisms for forest protection and how equity issues are taken into consideration.

World Bank.Author:  Navarro, Guillermo.Document Date:  2010/10/01. Document Type:  Working Paper.Report Number:65867.Volume No:  1 of 1