Bringing Forest to the Mainstream Economy - institutional frameworks and economic instruments to reduce deforestation: 1991-2001 FUNDECOR

04/12/2003 1 Introduction FUNDECOR is a non-governmental organization founded in 1991 to protect and increase the Costa Rican forests located in the country's central plateau. The forest coverage of this territory is one of the largest in Costa Rica, and comprises many of the country's National Parks.

04/12/2003 2 NICARAGUA ACTUAL LOCATION OF THE CENTRAL VOLCANIC MOUNTAIN RANGE AREA Río San Juan (ACCVC), COSTA RICA CARIBBEAN Puerto Viejo ¤

Guanacaste SEA ¤ Puerto Pun tare nas Limón ¤ ¤ ¤ SAN JOSE

Golfo de Nicoya

Central Volcanic Mountain Range P Conservation Area A N A PA C I F IC M Península de Osa A OCEAN

FUNDECOR

04/12/2003 3 Introduction

04/12/2003 4 CENTRAL VOLCANIC MOUNTAIN RANGE CONSERVATION AREA (ACCVC) NATIONAL PARKS MAP

490000 Puerto Viejo 550000 ¤ KEY 270000 270000 (Ha) 1. Ju an C astro B. Nat´l Park. 14.312

Aguas Zarcas 2. Volcan Poas Nat´l Park. 6.506 ¤ ¤ 3. Braulio Carrillo Nat´l Park. 47.506 4. Volcan Irazu Nat´l Park. 2.310 Ciuda d Ho rquetas Quesada San Miguel ¤ 5. Volcan Turrialba Nat´l Park. 1.577 ¤ 6. Guayabo Nat´l Monument. 233

590000 Guápiles Guácimo ¤ ¤

240000

Varablanca ¤

¤ Na ranjo Siquirres 230000 Grecia

NICARAGUA

CARIBBEAN SEA ¤ Sta Cruz

PACIFIC P OCEAN A N SAN JOSE A 210000 M ¤ A 520000 Tur rialba 590000 CAR TAG O 10 Km.

A CTUAL LOCATION OF THE ACCVC IN COSTA RIC A. ESCALA

04/12/2003 5 Where has FUNDECOR focused?

04/12/2003 6 Which are the main natural resources of the ACCVC and what could affect

them? THREATS SOLUTIONS Self-sufficiency Concessions of the parks Delimiting parks Park boundaries National boundaries Parks Surveillance

Land tenure Purchase of land

Environmental Services Payment and Charging Natural System Resources Forest low economic value for forest ow ners Timber auctioning Com mercialization strategies of SFM’s Advance purchase of wood wood production Access to local and international green Water seal's wood markets Group Certification Biodiversity Buffer Lack of protagonism of forest owners in SFM Timber auctioning Carbon fixing Zone

Scenic-tourism beauty Reduced Impact Logging New Technologies Web Sites for implementation practitioners Biological monitoring of Lack of technology forestry operations

Land registration Financing of and titling Sustainable Forest Management Financing the planning and implementation of SFM

04/12/2003 7 Beneficiaries of forest products and services

04/12/2003 8 Environmental services payment and charging system ? ?

Deforestation deterrence and socially optimal land use

04/12/2003 9 Forest environmental services

Water Scenic-tourism beauty ?

Biodiversity CO2

Tattenbach, 1999

04/12/2003 10 Thebenefit public (or and cost) private produced logic by ofthe Costa existence Rica’s (or environmentaldisappearance) service of forest payment that is notprogram captured by its owner, but by others

„ Environmental service is defined as an environmental

P ≥ C Private Logic V ≥ P Public Logic V ≥ P +V≥ Disaggregating values V =g V Cc ESP feasibility range V = V c +Eg country logic

Vc = On + Vi disaggregating country values Pt 5 On +Ri +Eg ESP program logic

04/12/2003 11 Thebenefit public (or and cost) private produced logic by ofthe Costa existence Rica’s (or environmentaldisappearance) service of forest payment that is notprogram captured by its owner, but by others

„ Environmental service is defined as an environmental

„ P ≥ C Private Logic

„ V ≥ P Public Logic

„ V ≥ P ≥ C ESP feasibility range

04/12/2003 12 The public and private logic of Costa Rica’s environmental service payment program

„ The total value of all environmental services V is equal to the sum of the values that accrue only at the global level

(Vg) and the values that accrue at the country level (Vc)

V = Vg + Vc disaggregating values

„ A country total environmental service Pc must be no more than the values that accrue at the country level plus the economic compensations obtained (exports) of the global

environmental services Eg:

V = V c + Eg country logic

04/12/2003 13 The public and private logic of Costa Rica’s environmental service payment program

„ These country values are also decomposable into values that

accrue at the national level On and values that are only geo-specific and accrue at the local level Vi:

Vc = On + Vi disaggregating country values

„ A country should pay environmental service payment from general

taxes Pt less than the values that accrue at the national level On plus the economic value reveled by the willingness to pay at the

local level Ri plus the economic compensations obtained (exports) of the global environmental services Eg:

Pt 5 On + Ri +Eg ESP program logic

04/12/2003 14 Internalization of environmental services

04/12/2003 15 Group certification

FSC

SGS-Qualifor

Forest Owners

04/12/2003 16 CENTRAL VOLCANIC MOUNTAIN RANGE CONSERVATION AREA (ACCVC) NATIONAL PARKS MAP

490000 Puerto Viejo 550000 ¤ KEY 270000 270000 (Ha) 1. Ju an C astro B. Nat´l Park. 14.312

Aguas Zarcas La Virgen 2. Volcan Poas Nat´l Park. 6.506 ¤ ¤ 3. Braulio Carrillo Nat´l Park. 47.506 4. Volcan Irazu Nat´l Park. 2.310 Ciuda d Ho rquetas Quesada San Miguel ¤ 5. Volcan Turrialba Nat´l Park. 1.577 ¤ 6. Guayabo Nat´l Monument. 233

590000 Guápiles Guácimo ¤ ¤

240000

Varablanca ¤

¤ Na ranjo Siquirres 230000 Grecia

NICARAGUA

CARIBBEAN Heredia SEA ¤ Sta Cruz

PACIFIC P OCEAN A N SAN JOSE A 210000 M ¤ A 520000 Tur rialba 590000 CAR TAG O 10 Km.

A CTUAL LOCATION OF THE ACCVC IN COSTA RIC A. ESCALA 04/12/2003 17 FUNDECOR's weighted presence by category of ToD Index: '96-'00

90.0% 80.0% 70.0% 60.0% 50.0% Forest under 40.0% SFMgmt &/or ESP agreements 30.0% 20.0% 10.0% LowHigh 0.0% Medium ToD Index

Low JCBla High SiqG CaTu VaCen Guap LaVirg Region HoCu

HoCu Guap LaVirg VaCen CaTu SiqG JCBla

04/12/2003 18 Bringing Forest to the Mainstream Economy Products Services GEF Green wood (biodiversity) market

INTERNATIONAL KFW TREATIES (CO2)

Global LOCAL Global Sustainable Forest FOREST Environmental Management Services Payments Domestic OWNERS Domestic

FUNDECOR Municipal FUNDECOR-FSC VOLUNTARY Waterworks GROUP CERTIFICATION PRIVATE AGREEMENTS Brewery Company Local high-end wood products Hidroelectrical industry Companies Products Services 04/12/2003 19 Monitoring of the effect of FUNDECOR operations

04/12/2003 20 Monitoring of the effect of FUNDECOR operations CUADRO N° 3. TASA (%) ANUAL DE DEFORESTACION 1986-1992-1996-2000

Zona de Amortiguamiento Zona de Amortiguamiento sin VC DEFORESTACION BRUTA ACCVC PN TOTAL VC TOTAL ZT FUNDECOR* OTROS**

86/92 5.7 2.4 7.3 9.4 7.0 7.6 8.3

92/96 4.4 1.7 6.0 5.3 6.1 5.0 7.4

96-2000 4.2 1.1 5.9 14.6 4.4 2.3 7.3

DEFORESTACION NETA

86/92 3.8 1.8 4.7 2.6 5.3 5.9 5.2

92/96 -2.6 -1.9 -2.9 -9.8 -1.8 -0.7 -3.1

96/2000 0.5 -0.6 1.1 11.0 -0.5 -2.7 2.5

Deforestación Bruta Deforestación Neta 1/n 1/n 1-(B final/B inicial) 1-[(B final+Reg)/B inicial) *Horquetas, La Virgen, Guácimo **Juan Castro Blanco, Siquirres-Guácimo, Cartago-Turrialba 04/12/2003 21 Monitoring of the effect of FUNDECOR operations

04/12/2003 22 Monitoring of the effect of FUNDECOR operations

Annual gross deforestation by category of ToD index: 1996-2000

20.0% 18.0% 16.0% 14.0% 12.0% Anual Gross 10.0% Deforestation 8.0% 6.0% 4.0% 2.0% High 0.0%

Medium JCBla SiqG ToD index CaTu Low VaCen LaV irg Guap Ho C u Region

HoCu Guap LaVirg VaCen CaTu SiqG JCBla

04/12/2003 23 Deforestation as function of FUNDECOR’s relative presence 0.15 00 ⎛ dr ⎞ ln⎜ 00 ⎟ = a + bPr ate ⎜ ⎟

r ⎝1− dr ⎠ a = −1.80591;b = −8.44113 R2 = 0.94 / t = −11.402 / t = −7.906 0.10 a b estation estation r o f

oss de oss 0.05 r Anual g Anual 0.00 0 0.1 0.2 0.3 FUNDECOR's relative presence (% of total forest under 04/12/2003 ESP &/or SFMgmt agreements) 24