Paying for Nature

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Most of the times I read something about the environment by Tom Friedman, my hopes go up a little and then usually come back down. His op-ed piece on Costa Rica evoked the same feelings. Friedman was extolling the effectiveness of Costa Rican policy in preserving biodiversity.

These days, visitors can still see amazing biodiversity all over Costa Rica — more than 25 percent of the country is protected area — thanks to a unique system it set up to preserve its cornucopia of plants and animals. Many countries could learn a lot from this system.

He calls this system unique beause it forces people who use environmental services to pay for those services.

More than any nation I’ve ever visited, Costa Rica is insisting that economic growth and environmentalism work together. It has created a holistic strategy to think about growth, one that demands that everything gets counted. So if a chemical factory sells tons of fertilizer but pollutes a river — or a farm sells bananas but destroys a carbon-absorbing and species-preserving forest — this is not honest growth. You have to pay for using nature. It is called “payment for environmental services” — nobody gets to treat climate, water, coral, fish and forests as free anymore.

This idea is not unique or practiced only in Costa Rica. Virtually all regulatory schemes balance the values of standard economic outputs against the harm done to the environment, that is, make the polluter pay. What is different about Costa Rica is that they set higher values on the non-impacted environment than most others do. This means that commercial projects that would go forward in other places are not “profitable” in Costa Rica. And the reason they can set such high prices is unique. As Friedman points out, “it did something no country has ever done: It put energy, environment, mines and water all under one minister.”

“In Costa Rica, the minister of environment sets the policy for energy, mines, water and natural resources,” explained Carlos M. Rodríguez, who served in that post from 2002 to 2006. In most countries, he noted, “ministers of environment are marginalized.” They are viewed as people who try to lock things away, not as people who create value. Their job is to fight energy ministers who just want to drill for cheap oil… But when Costa Rica put one minister in charge of energy and environment, “it created a very different way of thinking about how to solve problems,” said Rodríguez, now a regional vice president for Conservation International. “The environment sector was able to influence the energy choices by saying: ‘Look, if you want cheap energy, the cheapest energy in the long-run is renewable energy. So let’s not think just about the next six months; let’s think out 25 years.’ ”

So rather than create conflict between commercial and environmental interests that typifies most countries and allows the richest or most powerful to hold sway, this arrangement forces a single decision maker to balance all the issues. Rodriguez recognized the value of ecosystems to key sectors of the Costa Rican economy: tourism and agriculture. And if these services were not properly valued and actually paid for, they would be overly utilized and harmed

This system has solved a major difficulty found in countries where the responsibilities are split among competing agencies, but still falls short of what is needed to create sustainability, that is, a holistic understanding of the place of humans within the “environmental” world. This system does a great job in preventing unsustainability from showing up, but does little in changing the understanding of our species’ place within and as a part of the planetary ecosystem. Any framework that puts values on nature still sees nature only as a source of resources producing something accountable in economic terms. The higher the value we set, the less of nature will be used. But the important consciousness of our place as part of the world will be ignored. Both are critically important. I observe that we stop before taking this critical second step whenever we think we have solved the environmental problem at hand.