Trade opportunities in biodiversity based products and services: Case of Costa Rica

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1 Multi-Stakeholders Dialogue on Trade Opportunities in the context of a Green Economy Transition Biodiversity-based products Rio de Janeiro, Brazil, 18th June 2012 Trade opportunities in biodiversity based products and services: Case of Costa Rica Virginia Reyes Gatjens

2 Outline Costa Rica green strategy Biodiversity-based products Biodiversity services Case of Biodiversity Trust Fund Remarks Challenges

3 Costa Rica s green strategy Land planning Renewable energies Water management and waste management Biodiversity management C-Neutrality and climate change

4 Biodiversity-based products Costa Rica has a territorial extension of km2 and marine area of k2 (11,1 times the land extension). According with the Environmental Performance Index 2012 (Yale Center for Environmental Law and Policy & Center for International Earth Science Information Network, Columbia University), Costa Rica is located in the position 5 at world level and 1 for America countries. Costa Rica is one of the 20 countries with more biodiversity around the world and has 4,75% of the world biodiversity and 3,5% of the marine species. Due country s rich biodiversity there are a lot of opportunities for the commercialization of variety of wild products from forest, agriculture, agroforestry, sea and marine coast. These products are taking more importance in the costarican economy and generating work, mainly through small and medium business.

5 Agriculture of organic products Palm heart Medicine plants Nuts and seeds Aromatic herbs Coffee Source: Procomer, 2010.

6 Food industry and processed products Source: Procomer, Dried Fruits Fruits ready to eat Frozen vegetables Chocolate Sauces Liqueur Tea Snacks (yucca and banana).

7 Fishing, aquaculture and livestock Honey Shrimp Tilapia Tuna (fresh and processed) Source: Procomer, 2010.

8 Tuna balance of trade Importaciones Exportaciones

9 Biodiversity Services Costa Rica has 169 protected areas in 9 management categories, which means 26,2% of mainland, 17,2% of territorial sea and 0,9% of coastal and marine waters. There are 12 conservation categories in Costa Rica where the protected areas are added depending of the level of restriction of human being activities. 29,94% of Costa Rica mainland are being conserved for the public conservation system, excluding the PES program. Also Costa Rica has around of 200 private reserves that means ha.

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11 Projection of the economic benefits generated by National Parks and Biological Reserves Activities US$ Eco-Tourism Water quality for hydropower Employment generation Protected areas entrance fee Government financial contribution for protected areas conservation Land purchase Payment for environmental services Investment in biodiversity conservation Source: CINPE, Total

12 Biodiversity services : Case of Biodiversity Trust Fund

13 PES program growth Phase 1 Phase 2 Phase 3 Forestry incentives (70`s, 80`s, beginning 90`s) Setting up the Ministry of Environment 80 s Setting up the CNFL watershed program beginning 90`s Setting up FONAFIFO and PES program (Forestry Law 7575, 1996) 1/3 fuels taxes Sign of first private companies agreements Creation of PES certificate: Florida Ice & Farm; ESPH 3,1% Fuels taxes Phase 4 Payment of trees outside the forest and agroforestry systems Payment to land owners without land tittle 25% fee water extraction Agreement with several private companies Ha. Phase 5 Building up Biodiversity Trust Fund ( )

14 Biodiversity Trust Fund (BTF): Financial Sources $0.50 $0.50 $0.01 $0.02 $7.50 $7.80 In Us millions Bank KfW Conservation International Green Card GEF Osa Conservation CO2 car compensation certificate Cedarena supports the building of the BTF and the financial contribution of Conservation International and Osa Conservation for the development of the Osa Portfolio to promote long term environmental services payments to private land owners in the Osa Biological Corridor.

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16 Remarks In the transition process to be a green economy, Costa Rica is developing strategies and policies to support the changes and also has a strong legal framework. In the Development National Plan is established a priority to be C-Neutral for 2021: The creation of the rules to be certificated as C-Neutral, which is the first certification of this kind established in American countries. Reduction of the Carbon foot-print in all government institutions. Promoting the change of technologies in the transportation sector for more friendly vehicles and the generation of renewable energies. Incentive the development of small and medium enterprises based on biodiversity products. The national banks have created special credit portfolios to finance this kind of business. PROCOMER is supporting initiatives of products based on biodiversity that could be competitive in the international market. The private sector has identify market opportunities if they can be certify as C-Neutral companies, who are responsible with the environment.

17 Remarks Costa Rica has had capacity to innovate and be pioneer in the conservation of biodiversity, mainly through the development of the protected areas conservation system and the payment for environmental services program. Both programs together cover the more representative areas from the biological point of view and their connectivity. Alliances with the private sector and the building of the Biodiversity Trust Fund are mechanisms implemented by the government in order to look for the financial sustainability of the payment for environmental services program. PES program is seeing as sustainable model for long term conservation which is being replicated in other countries of the region. The government has recently created the Vice-Ministry of Water and Sea as part of the Ministry of Environment. Now, Costa Rica understand the need of thinking in the importance of developing economic instruments and model for the sustain use of water and mainly marine resources (Costa Rica has 11 times more marine area than terrestrial.

18 Challenges Costa Rica needs to work urgently in the strengthened of its governance: Even though Costa Rica has a strong legal framework related with the environment, it also has institutional gaps. Some responsibilities are duplicated or are not well defined. The country has weaknesses in the enforcement of the law and in the implementation of policies. Some excellent programs as the small and medium enterprises began with a lot of support, but they are not consistence during the time or do not have adequate financial resources. One of the main problems that Costa Rica and other small countries are facing nowadays is the lack of financial resources. This weakness should be used as an opportunity for the development of new ways of management which include financial mechanisms and multi-stakeholders participation. As well as the generation of business and market opportunities.

19 Thank you!