Costa Rica has tripled its GDP over the past 25 years while doubling the size of its forests, and its goal is to be the world's first carbon-neutral country by 2021.
The country is preparing for a cap-and-trade program and is one of eight countries to receive a $350,000 grant from the World Bank to assist in its design and implementation.
Also considered as part of its green economic development, a marine protected area larger than Yellowstone National Park ensures that fisheries are managed sustainably.
Carlos Manuel Rodriguez, a vice president with Conservation International (CI) and former environment and energy minister of Costa Rica, tells us how they are doing it:
As global economic and environmental struggles continue to make headlines, perhaps the world should look toward Costa Rica for answers. In the last 25 years, my home country has tripled its GDP while doubling the size of its forests; it has also pledged to become the world's first carbon-neutral nation by 2021.
These unique and wonderful achievements reveal that shifting our global patterns of consumption and production into a greener economy is not only possible, but necessary.
In 1996 Costa Rica created its Payment for Environmental Services (PES) program partially in response to deforestation pressures. The program was established to compensate landowners for protecting the ecosystems that supply fresh water, absorb carbon and provide other services for people.
At the time, it took those of us working in the Ministry of Environment many years to truly understand the economics of conservation, but as Costa Rica's environment and energy minister, I led this innovative program with high expectations.
More than 15 years later, this program benefits 8,000 landowners in a territory covering 10 percent of the country, all outside national parks. The payment averages $78 per hectare per year, with most compensation focusing on carbon and water services.
Since 2005, CI's Global Conservation Fund (GCF) has supported Costa Rica in engaging key landowners in the Osa Peninsula to enter into long-term payment for ecosystem services (PES) agreements. The region contains one of the best examples of lowland tropical rainforest remaining in Central America, featuring a range of distinct tropical ecosystems that are home to 50 percent of all species found in Costa Rica, including jaguars, harpy eagles, peccaries and giant anteaters.
Support from CI and many others has helped achieve unprecedented conservation objectives here, including halting the loss of tropical forest, restoring degraded forest and establishing innovative economic instruments to value biodiversity.
Building on the success of this program, GCF is a funding partner in an innovative new fund for Costa Rica that will support biodiversity services under a PES scheme targeting private landholders in valuable conservation areas. The Trust for the Sustainable Biodiversity Fund is also financed by the German Development Bank and the Global Environment Facility. Currently totaling $17 million, it is expected to reach $20 million by the end of 2012.
This new fund will complement Costa Rica's existing PES program, compensating private landowners for conserving forests not currently included in protected areas. This is the first conservation fund in the world designed to provide PES specifically for biodiversity services such as pollination, tourism and resources for future medicines.
As someone who has worked on these issues for many years, I'm proud of the long-term engagement between CI and the Costa Rican government, and hope this success will be replicated throughout the tropics.
Carlos Manuel Rodriguez is vice president of international policy in CI's Center for Conservation and Government. He was formerly the environment and energy minister for Costa Rica.
Learn about CI's Global Conservation Fund: