Reports from the Field: Financial Mechanism being used in Costa Rica

Mr. Guillermo Zuñiga is BIOFIN Lead Expert in Costa Rica. He is the former Finance Minister of Costa Rica. In this Report from the Field, He tells about the financial mechanism used by the Government of Costa Rica.

What are the main economic sectors that impact biodiversity in Costa Rica?
Our Institutional Framework analysis started with reviewing the country’s main economic sectors for their impact on biodiversity. Adding to the key sectors suggested as the starting point in the BIOFIN workbook, we in addition looked into climate change, financing and urban zoning. For all sectors both positive and negative impacts of the main policies were assessed. The sector in Costa Rica that has the largest number of policies affecting biodiversity was agriculture/livestock. Our study also showed many policies on water and sanitation and waste management affect biodiversity significantly.

Which policy recommendations did your review suggest for the government of Costa Rica?
We came up with multiple recommendations. We found there was in particular insufficient attention within many sectoral policies for Access and Benefit Sharing (ABS) and restoration. The study also provided suggestions for improved coordination amongst government organisations and identified the need for independent environmental tribunals to avoid penal law to resolve environmental conflicts. In addition I recommend to have clearly defined functions and greater participation of the private sector and communities during the policy design phase and implementation. Finally, the work showed actors such as local governments must play a more active role in biodiversity management.

What are the main financing mechanisms used by the government to conserve biodiversity?
Government entities represent just one group of actors involved in biodiversity policy implementation. In Costa Rica both the public and private sector participate in the financing and management of biodiversity. Together they use a wide variety of financing mechanisms.  This includes largely public mechanisms such as the central government budgeting system, but also more interactive ones, like Payments for Ecosystem Services (PES) and Biodiversity Offsets. For example Costa Rica established an elaborate, nationwide PES program in the 1990s, which has since grown from the piloting stage to a mature and established programme, aiming to enable forest owners and operators to receive an allocation for their contribution to conserving the country’s forests and other ecosystems.

How did the BIOFIN workbook help you to do your work?
The BIOFIN workbook was very helpful to set out the general process. we created several additional features to enrich it, including additional filters and a system to analyse policies and actors in relation to their implementation, impact, centralization, decentralization, unity and fragmentation. That gave us a full understanding of each sector’s (we have 14 sector of the biodiversity) performance and alignment with the Aichi Targets.