FONAFIFO Payment for Environmental Services
Costa Rica's FONAFIFO Payment for Environmental Services programme paid contracts covering 208,089 hectares in 2024, disbursing โก9.234 billion while using public, donor and market-linked finance to keep private land in forest uses.
208,089 hectares, hectares under payment for environmental services contracts, 2024. 9,234,000,000 Costa Rican colones, payments disbursed through the programme, 2024. FONAFIFO, Board meeting record and 2024 programme accounts, retrieved 2026-08-31.
The move, and what it needed
Costa Rica created a dedicated forest-finance institution that collects earmarked public revenue and combines it with donor and market funds, then pays landowners under monitored contracts for water, carbon and biodiversity services.
Preconditions
- A legal mandate and predictable revenue stream that can fund multi-year land contracts
- Land records, spatial targeting and field monitoring able to verify who is paid for what
- A public institution trusted by landowners and external funders to administer contracts and report results
Where else it has been used: Payments for ecosystem services travel well as a way to make stewardship financially visible, but Costa Rica's case shows the hard part: stable public finance and credible monitoring must survive changes in carbon markets and land prices.
Limits: Contract hectares and payments show the reach of a conservation-finance mechanism, not whether forest cover is additional, permanent or evenly distributed. The board record is an administrative account from the programme operator; it does not independently verify carbon permanence, biodiversity outcomes or the counterfactual land use.