What are we learning from experiences with markets for environmental services in Costa Rica? A review and critique of the literature


M. Rojas; B. Aylward

Type of Document:
Research Report


International Institute for Environment and Development (IIED)

Date of Publication:

Place of Publication:
London, UK


Abstract: Policymakers and practioners worldwide are increasingly interested in the use of markets and payments for environmental services. In the developing world, Costa Rica has led efforts to experiment with these mechanisms. This paper examines the Costa Rica experience to see what has been learned – how technical, scientific and economic information on environmental services has fed into these initiatives, and to what extent they are being monitored and evaluated. The principal objectives of the literature review is to identify and review material that addresses among other things the local origins and development of the concept of payments and markets for environmental services, the types of existing initiatives and who is participating in them, the knowledge base underpinning market development, and the monitoring and evaluation of the initiatives to date, and the extent to which the literature assesses these initiatives in terms of economic efficiency, environmental effectiveness, and social equity and/or poverty reduction.

Table of Contents:

1. Introduction 2. Local origins of payments and markets for environmental services 3. Review and Summary of Costa Rican market initiatives 3.1 Biodiversity 3.2 Greenhouse gas mitigation 3.3 Hydrological services 3.4 Bundles of environmental services 4. Knowledge base that underpins markets and payments 4.1 Biodiversity protection 4.2 Greenhouse gas mitigation 4.3 Watershed protection 4.4 Bundles of environmental services 5. Monitoring and evaluation 5.1 Biodiversity 5.2 Carbon 5.3 Hydrological services 5.4 Bundled services 6. Conclusion: lessons, findings and analysis 6.1 The current conceptual framework: is it too narrow, and skewed towards forests? 6.2 Does the PES scheme really offer a new concept or is it simply a repackaged subsidy? 6.3 INBio’s success story with bioprospecting: is it a replicable model? 6.4 Were carbon offsets over-promoted or is it still a matter of time? 6.5 Watershed protection: are downstream users getting what they pay for? 6.6 Is there really a market for environmental services? 6.7 Were PES developed based on sound information on the economic value of the planned activities?

Additional Bibliographic Information

Markets for Environmental Services 2

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