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Costa Rica has been one of, if not the most, successful stories of Payments for Ecosystem Services (PES). The program was established as a national program in 1996 (Forest Law No. 7575) in response to the country’s skyrocketing deforestation rates. This incredible rate of deforestation was driven primarily by perverse incentives established by law, including cheap credit for livestock, land-titling laws rewarding the cutting of forests, taxes on “unproductive” lands, and a quick expansion of the national road system. Recognizing the need to halt massive environmental degradation, Costa Rica implemented many legal reforms, including a scheme to pay land holders for providing the benefits of nature to people, or ecosystem services.

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