Understanding the governance of the Payment for Environmental Services Programme in Costa Rica: A policy process perspective

Costa Rica was a pioneer in implementing the concept of ecosystem services through a dedicated policy instrument: the Payment for Environmental Services programme (PESP) formalised in February 1996 in the 4th forestry law. However, the policy process that led to the design of the PESP and its consequences for its subsequent governance have never been fully analysed. Our paper aims at answering three questions: why PESP was adopted, what are the factors which enabled the speedy adoption of PESP, and how does the policy process affect the governance of the programme. Between 2008 and 2012, we interviewed 42 key representatives and stakeholders involved in the policy process. We also reviewed laws, decrees, and academic and grey literature. We combined the sequential policy cycle model to identify the sequences of the genesis of the PESP from the problem setting to the decision sequence, and a cognitive approach to the policy process to identify the internal and external factors that led to its genesis. We show that the PESP was rapidly adopted because of the particular domestic context, plus several internal and exogenous factors. First, deforestation was widely acknowledged and forestry incentive instruments already existed as did consolidated forestry organisations and institutions. Second, compromises were reached between leading actors in a context in which the forestry sector interest group was the most powerful. Third, public subsidies were banned in the framework of an international agreement on trade while the international carbon market offered new opportunities. The key elements of the governance of the Costa Rican PESP, such as its scope, nature and decision structure, reflect the existing balance of power between interest groups from different sectors (forestry, conservation, agriculture) involved in the management of forested areas. We conclude that analysing the policy process is important to understand PES governance and to promote sound PES development.