Costa Rica Introduces Law to Mandate Valuation of Natural Capital

Costa Rica MP Alfonso Pérez Gómez introduced a Natural Capital Law in the Legislative Assembly: “With these real economic values, Costa Rica will have good environmental accounting, make better decisions and develop better in the future, showing that the environment is also good business.”
A law to incorporate the value of natural capital in development planning was introduced in the Costa Rica legislature by MP Alfonso Pérez Gómez in late November 2013. If passed, the Government and the private sector would need to incorporate relevant natural capital data and its economic importance into proposed project plans.
 
The draft law, titled "Valuation of natural capital and integration of green accounting in planning for development", proposes to amend Costa Rica's Organic Law of the Environment of 1995. The amendments introduce the need for constructing natural capital accounts to inform environmental impact assessments (EIAs), starting 2016.  
 
This would make clear how natural assets will be depleted and/or depreciated by the planned development. For instance, if a project were in the vicinity of a national park or coastal buffer zone, the project plans would be required to show the economic valuation of the possible impact, positive or negative, on the area’s natural capital. 
 
"Today we can calculate the weight of exports in our GDP. We also know that our Constitution mandates to scale up investment in education to 8% of our GDP, but we do not know how much we are investing annually on the environment.” said the Hon. Alfonso Pérez Gómez. "With these real economic values, Costa Rica will have good environmental accounting, make better decisions and develop better in the future, showing that the environment is also good business.”
 
Gómez is also the president of the Global Legislators Organization (GLOBE International) in Costa Rica. Globe’s Natural Capital Initiative supports legislation that takes into account the value of biodiversity and ecosystem services.
 
The proposed legislation states that although the cost of the analysis is borne by the developer, the information generated by environmental accounts “will be publicly available and paid for by the state.” 
 
Through the country’s work with the WAVES Partnership, accounts are being constructed for forest and water assets. But, if passed, the parliament of Costa Rica would require the Government to gradually build and maintain a wider range of environmental accounts, according to an analysis by Rafael Aybar, director of GLOBE’s Natural Capital Initiative.
 
“I think WAVES has been instrumental in putting this issue back on the political agenda and providing much needed traction at the beginning of this process in establishing the framework for national stakeholders, including central banks, various ministries and implementing partners,” said Aybar
 
“Ultimately, the goal of WAVES is to see that this process gains life on its own, that this effort is continued locally once WAVES support comes to an end and legislators are uniquely placed to advance the long-term institutionalization of NCA and of ensuring that the flow of NCA data informs national decision making," he said.
 
Supporters are optimistic that the law will pass. Costa Rica Legislators voiced strong support for NCA in August 2013 when WAVES presented their work plan to members of the Environment Committee of the Costa Rican Legislative Assembly. A motion was passed to support the WAVES project in Costa Rica and to advance environmental accounting as a tool for public policy design.
 
“If this bill is passed it would be really something innovative,” said Luis Rivera, WAVES Costa Rica national coordinator. “It would be very positive to incorporate these new accounting practices within the private sector.”