Editor’s Note: The following article was written by Fabiana Barrientos, one of the Tribuno’s summer interns.
In 2019, Costa Rica received the United Nations’ highest environmental honor, the Champion of the Earth award. “Costa Rica has been a pioneer in the protection of peace and nature and sets an example for the region and for the world,” said Inger Andersen, Executive Director of the United Nations Environment Programme. Costa Rica received this award for its radical National Decarbonization Plan and its innovative work in reversing deforestation trends in the region. The president at the time, Carlos Alvarado Quesada, said: “The paradigm of sustainable development is very much in Costa Ricans’ DNA.”
This has been the redemptive story Costa Rica tells about itself, which the world has been eager to believe. However, it is a story that deliberately ignores the paradigm it operates within—the underlying market relations that structure these climate efforts.
Pago por Servicios Ambientales (PES) is the government program credited with the enormous reforestation efforts. The National Forest Financing Fund (FONAFIFO) pays private landowners an annual check to keep the wildlife on their land, with more than 18,000 families and cooperatives currently enrolled in the program. It works by having landowners decide to register for a five to ten-year contract, with payments averaging at about $64 per hectare per year. Since 1997, 1.3 million hectares have been enrolled cumulatively, and most years the area under contract spans around 300,000 hectares.
The average beneficiary of this program is small and medium-sized landowners. In an interview with Earth.org, one such farmer, Elicinio Flores, stated that “I feel proud when I walk through the forest, not only for me but for my whole family … when I am no longer here, I know that my children will continue to look after it.”
Yet, this is not the sentiment shared by all who chose to engage in the PES scheme. The decision to continue enrollment in the program is often decided by cattle and fruit export prices. For example, when the payments from PES fall short of the profit that can be made by cattle pasture, contracts are not renewed.
Hence, the anarchic nature of the market is written directly into the terms of conservation. A hectare of standing forest is saved because, for this particular year, the price is right, not necessarily because of its inherent value as a forest. Thus, when beef prices rise and contracts collapse, the trees that were preserved during the contract are suddenly cleared. In this calculation, the forest remains a commodity, fully entwined within the forces of the capitalist Market.
The question arises: how is this government program funded? FONAFIFO discloses that the funds are raised from a tax on hydrocarbon fuels, specifically gasoline and diesel. 3.5% of the revenues from this tax are re-allocated to the program, averaging about 15 million US Dollars.
This poses a problem as Latin American countries shift toward right-leaning, fiscally conservative policies. Argentina’s Milei, El Salvador’s Bukele, and Peru’s Fujimori represent a broader trend in the Latin American political paradigm, where constituents tired of the failures of liberalism turn to right-wing populist candidates. Costa Rica is not an exception, and the election of Trump-aligned populist Laura Fernández in February of 2026 indicates the direction that the country is steering towards. Fernández built her campaign on anti-immigrant security concerns, and whether this recalibration of priorities extends to FONAFIFO’s fuel-tax earmark remains to be seen; no such move has yet been reported. Moreover, as the Costa Rican economy depends highly on ecotourism from the United States, it is difficult to predict how the Fernández administration will weigh a program that could just as easily be redirected toward the security spending she has promised.
Whether or not Fernández decides to slash funding, the fact that a government hostile to the program could simply decline to renew the PES contracts shows the instability of an environmental program predicated on market and consensus. Moreover, the question of replicability is also contentious: Why does this method not seem to work in other countries?
Mexico’s PSA-H and Ecuador’s Socio Bosque are two attempts within Latin America to export the PES program. Neither has been as successful as Costa Rica’s PES. Some reasons include the size of these countries, weaker institutions, and higher profits from commodity agriculture. Hence, the fact that it is not an easily exported method of environmental protection shows the failures of environmentalism within the market mechanism: the Costa Rican case demonstrates that conditions are narrow and contingent if success is to be achieved.
Capitalism emerges as the foundation of both the problem and solution of Costa Rica’s environmental policies. The market is the determining factor for deforestation; demand for beef and fruit exports sets the price floor PES must outbid every year, while demand for ecotourism sets the price ceiling the state is unwilling to jeopardize. Hence, the forest is preserved only in the narrow band between what the market offers and what tourists expect to see. Its lack of replicability only exacerbates this problem. Thus, it becomes clear that a solution that only functions inside one small, historically peculiar economy is not a solution to capitalism’s ecological contradiction.
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