— Bill Ginn, the Conservancy’s Director of Conservation
By Curtis Runyan
Costa Rica is famous for being one of the most biologically rich spots in the world. Though it occupies less than 0.01 percent of the planet’s landmass, the tiny nation is home to 5 percent of all species. And the country has pursued an aggressive agenda to protect this diversity.
The government has set aside 26 percent of its land for conservation, which means it is closing in on an important milestone under its treaty obligations in the 1993 U.N. Convention on Biological Diversity.
But to be the first developing country in the world to meet its commitments to protect biodiversity, Costa Rica still has work to do.
One priority is adequate funding for its parks. Even in a relatively prosperous developing country like Costa Rica, support for conservation programs and park rangers has often proved ephemeral. For example, the 263-square-mile Corcovado National Park, considered the jewel of Costa Rica’s renowned park system, is staffed by just 36 people. (The 230-square-mile Zion National Park in the United States, in comparison, employs about six times that many.)
Another concern is the oceans. Despite the country’s track record in protecting more than a quarter of its land, it has protected only 1 percent of its oceans. “When we did a gap analysis of the country and looked at the goals of the Convention on Biological Diversity, we saw that terrestrial conservation was very close to being met,” says Zdenka Piskulich, the Conservancy’s former director in Costa Rica. “But in terms of marine conservation, we were way behind.”
The country’s ocean diversity — an estimated 3.5 percent of all marine species live in its waters — is as fantastic as the diversity of its lands.
With the Pacific on the west and the Caribbean on the east, Costa Rica’s rich waters support leatherback and loggerhead turtles, whale sharks and West Indian manatees — not to mention the 90 species of fish and other sea-faring creatures found nowhere else in the world.
One of the country’s few marine protected areas, Ballena National Marine Park, is an important migratory stop for humpback whales, which travel more than 5,000 miles from the Antarctic. “Some of the whales that come to breed in these waters are part of the farthest mammal migration in the world,” says Piskulich.
For years Piskulich had been leading efforts by the Conservancy to generate additional protections for the cloud forests of the mountainous Amistad region and the dense tropical jungles of the Osa Peninsula. Now, she and her team would need to shift gears.
Using data from the Conservancy’s analysis of gaps in the country’s protections, Piskulich began working to identify top conservation targets. “We needed to ID where the funding and marine priorities were so we could figure out where we would want to be our priority areas,” she says. To meet its international commitments, Costa Rica would need to at least double the size of its marine protected areas.
A huge breakthrough came this past September, when the government completed a $57 million deal, called Forever Costa Rica, that the Conservancy helped broker. Costa Rican officials worked with the Conservancy, two large foundations and a pair of conservation-minded former Wall Street traders to pull together the money, with the final critical funding coming from the U.S. Treasury Department through what is known as a “debt-for-nature swap.”
The deal will build on the priorities identified by Piskulich and her team and provide an ongoing endowment for conservation work. “We’re not just putting in money because protected areas say they need it,” she says. “We’re putting in money based on where the scientific tools told us the gaps are, and where the tools tell us the financial needs are.”
Forever Costa Rica will devote $8 million toward helping the country expand its marine parks and reach its biodiversity commitments over the next four years. And for the long term it will set up two funding streams: an independent endowment of more than $22 million, and the debt-for-nature swap that will provide more than $27 million in direct funding for conservation work throughout the country.
“We’ve been in Costa Rica for more than 30 years,” says Bill Ginn, the Conservancy’s director of conservation. “And out of that work came this enormous idea to transform how conservation was funded in Costa Rica and to radically change the nature of the protected-areas system there.” As the project moves forward, Forever Costa Rica could set the bar for conservation around the world.
Costa Rica’s parks have been a boon to local people. The country’s protected areas bring in an estimated $1.5 billion per year from ecotourism and less tangible ecosystem services, such as a forest’s provision of clean drinking water or a river’s help in producing hydropower. Corcovado National Park alone generates $93 million a year for local communities in the form of ecosystem services and tourism.
Despite the local benefits they bestow, a lot of parks still face threats. For example, illegal loggers have been chipping away at Corcovado’s fringes. And about five years ago, poachers armed with AK-47s mowed down white-lipped peccaries, the pungent pig-like animals that snort and clack their teeth as they munch palm fruits.
That’s one reason why conservation priorities in Costa Rica have shifted beyond just expanding parks to include setting up “sustainable financing.” The idea is to endow parks with stable funding to ensure that conservation actually happens — now and in the future.
The genesis of this endowment idea for Costa Rica’s parks, like a number of audacious ideas in tropical conservation, can be traced to Dan Janzen’s screened living room in Santa Rosa National Park in the dry northwestern corner of the country. Janzen, who has been called the dean of tropical biology by Harvard luminary E.O. Wilson, first gained his rock-star scientist status in the late 1960s, when he described a mind-boggling mutualism — a remarkable partnership between thorny acacia plants and the vicious ants that defend them from leaf-eating bugs and beetles.
Later, Janzen was among the first to push the conservation community to think about mixed-use “conservation areas.” Rather than protect only isolated national parks as islands of diversity, he proposed setting up wide corridors with varying degrees of protection: Orange groves alongside nature preserves, for example, could not only support local livelihoods but also play a role in supporting wide-ranging jaguars and other species.
In the early 1980s, as a professor at the University of Pennsylvania, Janzen determined that he would help protect Costa Rica’s forests. He began working with local communities and in 1997 established the Guanacaste Dry Forest Conservation Fund to protect and restore land around national parks in the region. His idea was to create a permanent endowment to support restoration projects, land purchases and — most important — salaries. Supporting the local communities, he felt, was the best tactic for protecting forests they might otherwise fell.
In 2005, Janzen took wealthy Costa Rican businessman Carlos Uribe on a tour of Guanacaste National Park. Uribe was impressed with the protections provided by the endowment, recalls Janzen. But if this idea works so well in this park, Uribe wanted to know, “why can’t you do that for others?”
What a great idea, thought Janzen, to endow all of Costa Rica’s parks with stable funding. And for this conservation vision to succeed more broadly, all he would need was “a great big pot of money.”
But that was money Costa Rica didn’t have to spare. “Costa Rica is as poor as church mice,” says Janzen. “Let me put this in context: The annual budget of the Costa Rican government is about $2 billion. That is the budget of the University of Pennsylvania.”
A few years later, Janzen’s idea caught the attention of two former Wall Street traders with a knack for spurring big conservation deals: Larry Linden and Roger Ullman of the Linden Trust for Conservation. In 2007, they teamed up with the Gordon and Betty Moore Foundation, the Walton Family Foundation and the Conservancy with the idea of making a big difference for conservation in Costa Rica.
The Linden Trust had sparked the idea, and now the group turned to the Conservancy — with its foundational work in Costa Rica — to make it happen. Working with the government, Piskulich had already demarcated priority spots for conservation and was calculating how much the whole effort would cost. “We had identified what needed to happen,” she says. “We had all the tools and a great road map.”
Next they needed to fill the gap in funding. The group, working closely with the Costa Rican park service, calculated that a $50 million fund would be enough to help Costa Rica meet its conservation goals.
To drum up interest in the deal with potential donors, the group agreed to a high-stakes, “single-closing” fund-raising approach often used by Wall Street investors: They wouldn’t accept a cent from any source until they had all the funding lined up. “It’s a great selling point to the donor,” Ullman says.
But by the time 2009 rolled around, they only had about half the amount they needed. If they couldn’t round up another $25 million, their single closing plan would come back to bite them: They’d be left with nothing.
Compared to watching a spider monkey launch itself spread eagle across a 20-foot gap between two Dipteryx trees on the Osa Peninsula, a day spent scurrying around the neoclassical buildings of Washington, D.C., has little to offer a nature enthusiast. But that’s exactly what Pilar Barrera, a senior policy adviser with the Conservancy, loves doing.
After 12 years at the Conservancy, part of that time directing policy work in Colombia, Barrera has become the organization’s most important link to the U.S. Treasury. Thanks to the Tropical Forest Conservation Act of 1998, the Treasury can forgive foreign debt in exchange for funding to protect forests in tropical countries. Such debt-for-nature swaps, as the arrangements are known, are “an amazing financial mechanism for conservation,” Barrera says.
The United States, through a program of the U.S. Agency for International Development, doles out nearly $1 billion per year in grants and loans to Latin American countries to supply food aid or support development projects, such as providing malaria nets or clean drinking water. Just like a homeowner with a mortgage, these countries have signed a repayment plan with the U.S. Treasury.
Under the Tropical Forest Conservation Act, Congress appropriates $20 million each year for the Treasury to relieve portions of some countries’ USAID debt — provided those funds are used to preserve tropical forests. Conservation groups can amplify the conservation impact of the deal by purchasing additional parts of the debt. This also allows them to have some say over how the final funding will be spent. Since August 2001, the Conservancy has taken part in nine such debt-for-nature swaps — in Belize, Peru, Panama, Colombia, Guatemala, Costa Rica and Jamaica.
In September 2007, the Conservancy and Conservation International contributed a total of $2.5 million to a swap that generated $26 million for Costa Rican conservation over 16 years. Such swaps have provided a powerful way to leverage conservation dollars and protect additional priority areas. But none of them addressed the issue of long-term funding for parks.
In May 2009, Piskulich, hot on the fund-raising trail for Forever Costa Rica, called Barrera. About $30 million had been raised, said Piskulich, but funding was still short the $20 million needed to complete the all-or-nothing deal. Did Barrera think it would be possible to negotiate a new debt-for-nature swap to fill the gap?
Barrera listened intently but did not have high hopes: The 2007 debt-for-nature swap in Costa Rica had gotten off to a slow start, she explained. “We don’t have any results yet,” she warned Piskulich.
Nevertheless, in August 2009, Piskulich flew to Washington, D.C., to meet with Barrera about a new swap. With a stack of maps and documents between them, they sat down in a coffee shop on Pennsylvania Avenue for two caffeinated hours to chart out a strategy.
With the plan in place, on September 18, 2009, the Costa Rican government sent its official request to the U.S. Treasury, and the following summer the three parties began negotiating the terms.
The Nature Conservancy agreed to contribute $3.9 million to the swap. “The idea is to leverage our resources for conservation,” says Barrera. “We put in $4 million and in return we will see $23 million for conservation work.”
The deal pushed Forever Costa Rica’s coffers up to $57 million, clearing the fund-raising hurdle and ensuring funding to support the parks indefinitely. The money from the swap will fund protections of tropical forests, and the funding from private donors will primarily support marine conservation. As part of the agreement with the Conservancy and its partners, Costa Rica committed to create a new marine conservation department and hire the staff needed to work in the new parks. “What’s not to like about that?” says Ricardo Kogel, the Conservancy’s conservation coordinator in Costa Rica. “For Costa Rica, this is a win-win.”
When the deal finally came together in late 2010, Piskulich left the Conservancy to become the executive director of the Forever Costa Rica Association, which will manage the funds. Now, working with the Costa Rican government and the Conservancy, she and her new team have already sketched out a five-year timeline of goals for helping the country meet its biodiversity milestones.
As a result, in the next year the association will provide national parks with resources to create or update management plans, monitor the effects of climate change and work with fishing interests to expand marine protections. If all goes according to plan, 70 percent of Costa Rica’s protected areas (118 of 169 areas) will have management plans by 2012. By 2015 the country will double the size of its marine protected areas and expand several terrestrial parks.
“This is very exciting,” says Piskulich. “We identified, brick by brick, what needs to happen and helped build a solid foundation” to meet Costa Rica’s biodiversity protection goals. “And now that the government can put up the walls,” she says, “we are ready to come in and put on a roof.” With all the pieces in place — including funding and management plans — Costa Rica is set to be the first developing country to put its conservation house largely in order.
“These are incredible accomplishments,” says Conservancy conservation director Ginn. “We are really transforming conservation.”May 16, 2012