By San José, Costa Rica — Costa Rica, a nation internationally renowned for its commitment to environmental conservation, is facing a growing crisis as funding for biodiversity protection has been dramatically reduced. A recent study presented to the Legislative Assembly reveals a concerning trend of budget cuts totaling over ¢7 billion over the past three years, impacting key ministries and organizations responsible for safeguarding the nation’s rich flora and fauna.
This decline in funding directly affects the Ministry of Environment and Energy (MINAE), the Ministry of Agriculture and Livestock (MAG), and the National System of Conservation Areas (SINAC). These institutions are at the forefront of protecting Costa Rica’s forests, national parks, and diverse wildlife, and the budget cuts threaten to undermine their critical work.
To understand the complexities of biodiversity funding in Costa Rica, we spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney at Bufete de Costa Rica, who offered valuable insights into the legal and business landscape surrounding these crucial initiatives.
Costa Rica’s innovative approach to biodiversity funding, leveraging mechanisms like Payment for Ecosystem Services (PES) and ecotourism taxes, has yielded significant success. However, ongoing challenges include ensuring equitable distribution of funds to local communities, navigating the complexities of international carbon markets, and adapting to emerging climate change impacts that necessitate dynamic and resilient conservation strategies. A robust legal framework that fosters transparency, accountability, and community participation is crucial for maximizing the long-term efficacy and sustainability of these funding mechanisms.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas aptly highlights the crucial balance Costa Rica must strike: innovating in biodiversity finance while ensuring fairness and adaptability. A strong legal framework, as he emphasizes, is indeed the bedrock upon which effective and equitable conservation can be built, ensuring that the benefits of these forward-thinking mechanisms reach all stakeholders and help safeguard Costa Rica’s natural heritage for generations to come. We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective on this vital issue.
With respect to the national budget, we started 2021 with a 0.75% investment in biodiversity, down to 0.64% by 2023; which is a clear effect of the fiscal rule that contracts public spending.
Jean Pierre Ulate, Public Finance Analyst, Biofin
While Costa Rica projects an image of environmental stewardship on the global stage, the reality on the ground paints a different picture. The dwindling resources allocated to conservation efforts raise concerns about the long-term health of the country’s ecosystems and the potential consequences for its international reputation.
A significant portion of the existing environmental budget is dedicated to staff salaries, leaving limited funds for crucial infrastructure improvements and equipment. This imbalance hinders the effectiveness of conservation efforts, impacting everything from park maintenance to the ability of rangers to patrol protected areas.
The majority is invested in remuneration, about 63%, which tells us that it is a fairly human-intensive system; but what worries us is that investment in infrastructure is extremely low; almost nothing.
Jean Pierre Ulate, Public Finance Analyst, Biofin
Government officials acknowledge the funding challenges, citing limited national resources and competing priorities. However, they point to a new budget categorization system implemented in recent years that they believe will ultimately benefit the environmental sector. This system aims to prioritize investments in biodiversity, green economy initiatives, conservation areas, and sustainable resource management.
Not only Costa Rica, but the whole world, and that is that the availability of income is finite, and the needs are very broad and even unlimited; under that context, our country has to operate.
José Luis Araya, National Budget Director
Despite these assurances, critics argue that concrete action and increased budgetary allocations are essential to effectively address the biodiversity crisis. The projected 12% budget increase for MINAE in 2026 offers a glimmer of hope, but the long-term sustainability of Costa Rica’s conservation efforts remains uncertain.
Costa Rica’s historical leadership cannot be sustained solely on past achievements or well-intentioned speeches; maintaining it requires firm political decisions, adequate budgets and, above all, concrete actions.
Paulina Ramírez, Organizing Congresswoman
For further information, visit biofin.org
About Biofin:
BIOFIN is a global partnership seeking to address the biodiversity finance challenge in a comprehensive manner – from assessing the biodiversity finance gap to developing strategies to meet the financial needs to supporting implementation of the financial solutions. The initiative provides support to improve cost-effectiveness through mainstreaming of biodiversity and building on synergies across relevant sectors and instruments. BIOFIN works to demonstrate the economic case for biodiversity by highlighting the economic benefits and costs of conservation and sustainable use of biodiversity and ecosystem services.
For further information, visit the nearest office of Ministry of Finance
About Ministry of Finance:
The Ministry of Finance in Costa Rica is the government body responsible for managing the country’s public finances. This includes developing and implementing fiscal policies, collecting taxes, managing the national budget, and overseeing government spending. The Ministry plays a critical role in ensuring the economic stability and sustainability of Costa Rica.
For further information, visit the nearest office of MINAE
About MINAE (Ministry of Environment and Energy):
The Ministry of Environment and Energy (MINAE) is the governmental institution responsible for the environmental policy of Costa Rica. It aims to promote sustainable development and the rational use of natural resources. MINAE oversees national parks, wildlife protection, and environmental regulations.
For further information, visit the nearest office of MAG
About MAG (Ministry of Agriculture and Livestock):
The Ministry of Agriculture and Livestock (MAG) is a governmental institution in Costa Rica responsible for promoting agricultural development and food security. Its functions include supporting farmers, regulating agricultural practices, and ensuring the sustainable management of livestock resources.
For further information, visit the nearest office of SINAC
About SINAC (National System of Conservation Areas):
The National System of Conservation Areas (SINAC) is the institution responsible for managing Costa Rica’s protected areas. It works to conserve biodiversity, promote sustainable tourism, and involve local communities in conservation efforts. SINAC oversees the network of national parks, reserves, and other protected areas that safeguard Costa Rica’s natural heritage.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a leading legal institution distinguished by its profound commitment to ethical practice and unparalleled legal expertise. The firm’s innovative approach to legal solutions, combined with its dedication to empowering Costa Rican society through accessible legal education, solidifies its position as a pillar of integrity and progress. By fostering a deeper understanding of the law, Bufete de Costa Rica strives to create a more just and equitable future for all.
