News Release No. 2006/XXX/LCR Media Contact:
Stevan Jackson (202) 458 5054
sjackson@worldbank.org Washington, DC, June 8, 2006 – The World Bank’s Board of Directors approved today a $30 million loan for Costa Rica, as well as a $10 million grant from the Global Environment Facility (GEF), to improve the provision of environmental services.
The Mainstreaming of Market Based Instruments for Environmental Management Project aims to enhance sustainable natural resource management and biodiversity conservation in key areas as well as ensure its long-term sustainability by focusing on productive landscapes in the buffer zones of protected areas and the biological corridors connecting them.
“Costa Rica is at the forefront of biodiversity conservation and environmental management,” said Jane Armitage, World Bank Country Director for Central America. “Recognizing that its biological resources are an important national asset, Costa Rica has actively promoted a variety of conservation mechanisms and encouraged innovation in financing and administration.”
Costa Rica’s Payment for Environmental Services program (Pago por Servicios Ambientales or PSA) is widely considered the most successful such program worldwide. The PSA program has supported forest conservation on privately-owned lands in priority watersheds and key areas within Costa Rica’s portion of the Mesoamerican Biological Corridor over the past decade, with support from earlier World Bank and GEF financing.
The project objectives will be accomplished by consolidating the PSA Program, improving its efficiency, and expanding its coverage. The project will also support the development of new market-based approaches to sustainable financing of environmental management. Overall, the project will contribute to about 100 percent increase in area of globally significant biodiversity value within the PSA program and to more than 25 percent in total PSA coverage (from 230,000 hectares at the end of 2006 to at least 288,000 hectares at the end of project) that will generate environmental benefits,
Market-based instruments for Environmental Management. Natural ecosystems provide a wide range of environmental services (e.g., hydrological services, soil stabilization and carbon sequestration). However, these valuable services are too often lost as a result of mismanagement and lack of incentives to preserve them. Landholders typically receive no compensation for the positive environmental benefits generated by their lands, and therefore have no economic reason to take these services into account in land use decisions.
Costa Rica has led the way in using market-based instruments to address these market failures, thereby aligning incentives facing landholders with broader societal interests. The center piece of this effort has been the country’s program of payment for environmental services. The central principles of this approach are that those who provide environmental services should be compensated for doing so, and that those who receive the services should pay for their provision. This is made possible by establishing a mechanism to connect service users (e.g., water users) to service providers (e.g., landholders), thus internalizing unforeseen impacts.
The Costa Rican Government has articulated a comprehensive environmental strategy with three main objectives: (a) the establishment of large areas for conservation; (b) the assessment of biodiversity that lies within conservation areas; and, (c) the integration of the sustainable use of biodiversity into the intellectual and economic fabric of society.
“One particular emphasis of the project is to promote the participation of small and medium sized landholders in the PSA program, thus contributing to poverty alleviation in priority conservation areas," said Nadim Khouri, World Bank Senior Natural Resources Specialist and Task Team Leader for the project. “Costa Rica has been a pioneer in the development of environmental service programs, and its international leadership and example have led other Latin American countries, as well as countries outside the region, to establish similar programs. However, many challenges remain.”
In addition, the Global Environment Facility (GEF) financial support in the amount of $10 million will help (a) conserve globally significant biodiversity, including critically threatened endemic species, (b) protect and enhance biodiversity conservation within the Mesoamerican Biological Corridor, (c) create an endowment fund for long-term support to biodiversity conservation that could be replicated and serve as a model for other countries, (d) research links between land use change and environmental services, and (e) increase carbon sequestration and knowledge about carbon sinks. -###- Note to editors: The Global Environment Facility (GEF) is a mechanism for providing new and additional grant and concessional funding to meet the agreed incremental costs of measures to achieve agreed global environmental benefits in the six focal areas - climate change; biological diversity; international waters; persistent organic pollutants; land degradation; and ozone layer depletion. GEF also supports the work of the global agreements to combat desertification.
The World Bank Group is one of GEF’s implementing agencies and supports countries in preparing GEF co-financed projects and supervising their implementation. The Bank plays the primary role in ensuring the development and management of investment projects. The Bank draws upon its investment experience in eligible countries to promote investment opportunities and to mobilize private sector, bilateral, multilateral, and other government and non-government sector resources that are consistent with GEF objectives and national sustainable development strategies. For further information on GEF, please visit www.theGEF.org For more information about the project, please visit:
http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P093384
For more information on the World Bank in Latin America and the Caribbean, visit: www.worldbank.org/lac
For more information on the World Bank’s work in Costa Rica, visit: www.worldbank.org/cr |
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