Admired reforestation program facing headwinds

Costa Rica

Forest in Tortuguero, on Costa Rica’s Caribbean coast. (Photo courtesy of Costa Rican Tourism Institute, ICT)

Costa Rica’s reforestation program has won accolades the world over. Launched in 1996, the so-called Payment for Environmental Services program, which taxes fuel and uses the revenues to pay farmers who protect forested land, helped the country reverse decades of deforestation. Nearly 60% of Costa Rica was forested in 2020 versus 26% in 1983, according to the World Bank. Last year, the government won the prestigious Earthshot Prize, thanks to the program’s success. But the initiative has struggled in recent years. A fiscal reform passed in 2018 to contain a widening government budget deficit led to spending cuts across the public sector, including in funds earmarked for the forestry program. Since 2020, mobility restrictions and work-from-home policies due to Covid-19 have hit gasoline consumption, reducing tax revenues. And, most recently, the government proposed freezing taxes on fuel to contain rising inflation spurred partly by higher oil... [Log in to read more]

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