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COSTA RICA AIMS FOR CARBON NEUTRALITY.

Article Excerpt
Costa Rica, already something of a paragon of virtue in things environmental, is seeking to burnish its credentials to a higher luster with President Oscar Arias' announcement that by 2021 the country will be the first in the world to become carbon neutral. The president told an audience at the Wharton Global Alumni Forum on Business and the Environment that the goal is made possible by Costa Rica's long commitment to environmentalism. "While other countries were cutting down their trees, Costa Rica was planting for our future, creating a 10% gain in the amount of territory blessed with leafy vegetation," said Arias. Many experts agree that increasing forest cover and cutting down on greenhouse gases is crucial in achieving the goal.

Urban Costa Rica doesn't look anything like an environmental mecca. Its heavy traffic and aged rolling stock pukes fumes and blankets of smog to rival any developing country. But here, the right to pollute is subject to painful taxes, making gasoline and diesel more expensive than anywhere else in Central America, and 3% of the taxes go to the Fondo Nacional de Financiamiento Forestal (FONAFIFO). An added benefit to the fuel tax is its use as matching funds. US$50 million from this taxation was leveraged to get a US$40 million World Bank loan and a US$10 million donation from the Global Environment Fund to be used for sustainable forestry activities, biodiversity preservation, and related projects.

FONAFIFO was legally set up in 1990 and in 1997 began the Environmental Services Payments program (ESP). It is a relatively autonomous organization within the State Forest Administration. It finances small and medium-sized producers to manage and plant forests, establish...