Costa Rica

In the last two decades, Costa Rica has transformed from one of the world’s most rapidly deforested countries to one of the foremost pioneers in environmental protection, thanks to groundbreaking policies.

Natural resource accounting was undertaken as early as 1991 in Costa Rica. A study by the World Resource Institute (WRI), together with local counterparts, compiled accounts for forestry, soil erosion, and fisheries. In 1997, Costa Rica became the first country to initiate a countrywide payments for environmental services (PES) program.

While comprehensive environmental policies have reversed the trend of environmental degradation and now more than 52% of the country area is covered with forests, the WAVES Partnership will provide policymakers with the tools to continue along their sustainable development path. Wealth accounting and valuation of ecosystem services will help address some important questions. For example, Costa Rica has invested a great deal in protecting its forests, especially given the tourism and watershed services they provide. However, knowledge about the return of those investments and its global impact on the economy is limited. For instance, how much tourism revenue is actually generated by forests and protected areas, and to what extent do local communities benefit from forest protection?

Making WAVES in Costa Rica

WAVES will support the construction of asset accounts for water and forest resources; promote the valuation of natural capital, ecosystem services, and the integrated economic-environmental accounting to generate accurate information on the current use of natural resources for national policy planning; and expand available information and indicators to monitor the progress of specific policy actions. Through these actions, WAVES will contribute to establishing better analytical and decision-making tools for sustainable development planning in Costa Rica.

Outcomes will include a water resources account to organize the hydrological and economic information of the country in a coherent and consistent framework and a forests account that incorporate physical and monetary values of ecosystem services to inform policy decisions on forest management (including the REDD+ Strategy).

The Story So Far

In 2012, a scoping out study was completed. The resulting “Feasibility Study and Policy Entry Points Report” identified five priority sectors for accounts (water, forests, marine resources, tourism, and energy) and areas where WAVES can contribute or add value to existing national policies and strategies. Three stakeholder workshops (attended by over 100 participants from the Ministries of Environment, Planning, and Tourism, the Central Bank, and from academia and NGOs) were held in 2011-2012 to provide input and review the WAVES Costa Rica work plan. As a result, two natural assets accounts were prioritized: water and forests.

The 2013-2016 policy brief summarizes the state of natural capital in the country, emphasizing policy priorities of water and forest-resource management.

Work on water accounts, which began in late 2012, is ongoing. An inter-agency working group for the Water Technical Committee (WTC) was established in April 2013 to compile a comprehensive set of accounts covering water resources, balances, water use and pollution, including the economic cost of pollution.

Forest accounts will include both timber and non-timber products, as well as the economic value of ecosystem services and a carbon balance. During 2013-2014 a national forests inventory will be developed and provide basic data and information to construct the accounts.

Preliminary water and forest accounts are expected to be completed by spring 2014.

WAVES contributed to establishing the National Environmental Indicators System (SINIA) in May 2013. It will develop the environmental information to be integrated into the National Accounts to be constructed by the Central Bank, and will be particularly relevant to build the physical accounts for water and forests.

WAVES Costa Rica plans to collaborate on natural capital accounting with other development partners including local universities and NGOs, as well as with Central Banks and Statistics Offices throughout Latin America.

The first WAVES Steering Committee was in September 2013, and their second meeting in December 2013.