John Tidwell, Staff Writer

Once a destitute Spanish colony, Costa Rica is now one of Central America's most prosperous countries. This nation of 4 million people almost lost its living natural wealth, but instead, through courage and innovation, it discovered the value of ecosystems and created a revolutionary economic strategy that made conservation good business.

Paradise Lost
Natural ecosystems and their manifold species make life on Earth possible, yet the recent United Nations Millennium Ecosystem Assessment reported that agriculture still destroys more than half of the ecosystems on Earth. As habitats decline, the natural benefits they provide – "ecosystem services" such as fresh water and fertile soil – also become scarce, making poverty and disease worse and costing countries billions of dollars. Hardest hit are developing nations, where overexploiting natural resources is usually the easiest way to survive.

Underlying these problems is a persistent belief that pristine wild lands are worthless until exploited. If thriving ecosystems had intrinsic monetary value, it would change the way these countries view conservation. For 20 years, Costa Rica and CI have worked together to do just that.

When CI arrived in the late 1980s, Costa Rica was in crisis. Gambling that beef would reap larger profits than its venerable coffee exports, the government had spent some 30 years trying to transform vast expanses of rain forest into profitable cattle pasture. When ranchers discovered the country's tropical soil produced low-grade beef, international buyers retreated and Costa Rica was left with lots of cattle and no beef market. Worse, only 21 percent of the country's once legendary jungles remained, making it one of the most deforested nations in the Americas.

Rescuing Eden
In 1970, Costa Rica had legally protected its last wild lands by establishing a national park system. While these parks looked great on paper, the country discovered that managing remote expanses wasn’t easy. Poverty still fueled illegal logging and poaching, and wildfires from slash-and-burn agriculture were an ever-present danger. In 1989, after only a year in operation, CI faced a formidable dilemma: how to conserve ecosystems without destroying poor people's livelihoods.

Accepting the challenge, CI began working around the La Amistad Biosphere Reserve, a 2-million-acre cloud forest considered one of the western hemisphere's most biodiverse regions. Local farmers' slash-and-burn agriculture threatened not only park wildlife but Costa Rica's people as well, because La Amistad supplies half the country's water.

To solve this dilemma, CI combined ecosystem protection with sustainable development in a unique partnership called AMISCONDE. It united the governments of Panama and Costa Rica, local environmental groups, and La Amistad farming communities. Funded by McDonald's and its partners, the alliance became one of the early corporate partnerships in conservation history.

Local villagers discovered how to prevent wildfires and re-fertilize soil, creating their own agroforestry projects underwritten with AMISCONDE credit. For 15 years AMISCONDE partnered with 22 La Amistad communities, evolving from direct village engagement to supporting farmers' conservation plans through the Critical Ecosystem Partnership Fund (CEPF). Today, it's still going strong, assisting communities through sustainable "Conservation Coffee" agroforestry.

Green Economics
While AMISCONDE helped rural farmers, national success through "green economics" required a plan in which everyone participated. In the 1990s, most of the wild land Costa Rica needed to conserve remained private property. Thinking creatively, the government engaged landowners by making environmental protection less about law enforcement and more about opportunity. Costa Rica promoted ecotourism, which showed that thriving rain forests could be as profitable as coffee plantations. This strategy worked so well that today, ecotourism is Costa Rica's principal industry.

But the strategy that changed Costa Rica's fortunes the most was one that proved ecosystems had value, not just for beauty but for the vital services they provided. Science showed that without forests, river systems dried up and land often became lifeless. Pay a farmer more to manage his forested land than he got by clearing it, and vital resources could be preserved. The idea wasn’t new, but Costa Rica became the first country to make it national policy.

Spearheaded into law by visionaries like Carlos Manuel Rodriguez, Costa Rica's minister of the environment, and financed by international nongovernmental organizations and a "green" gasoline tax, the government’s Payment for Environmental Services (PSA) program identified four natural resources Costa Ricans now pay to protect: freshwater systems; the biodiversity that keeps ecosystems working; greenhouse gas-absorbing forests; and the sultry landscapes tourists adore. Annually paying landowners about $160 per acre to farm ecologically, the government’s PSA system changed how everyone viewed wilderness. Subsistence farmers could now afford to get an education or start a new business, while former cattlemen found water farming more profitable than herding cows.

PSAs also encouraged landowners to create "biodiversity conservation corridors" between national parks, giving wildlife more space to roam and villagers more ecosystem payments. Consequently, the program has helped create new markets for ecosystem services, ranging from carbon emission credits for atmospheric CO2 absorbed by intact woodlands, to megavolts of hydropower generated by the watersheds of restored rain forests. Pastureland began growing back into jungle, making Costa Rica the first developing country to halt and then reverse its deforestation.

"PSAs changed our notion of environmentalism," says Manuel Ramirez, senior director of CI's Southern Mesoamerica Program. "It transformed conservation from charity into an economic tool capable of competing with any other export in the global marketplace."

In fewer than 20 years, Costa Rica has risen from economic failure to one of Central America's leading nations. Tropical jungle again covers more than half the country, ecotourism annually pumps about $825 million into the economy, and many of the once-struggling mountain villages now thrive because of programs like AMISCONDE. Last year some $60 million in PSAs went to thousands of Costa Rican landowners who now treasure their forests like blue-chip investments.

Word of Costa Rica's success has spread. Environment Minister Rodriguez says he has counseled some 17 countries about PSAs. Similar programs have begun to emerge in Asia, in Africa, and throughout Latin America.

"We proved a developing country can succeed using conservation as an economic engine," Rodriguez explains. "We showed that an acre of forest is worth more than a cow."