Payments for Environmental Services (PES) in Costa Rica, presented by Stefano Pagiola from the World Bank's Environment Department, outline a program that aims to finance environmental services provided by forest ecosystems. The program, established under Forest Law No. 7575 (1996), recognizes four key environmental services: mitigating greenhouse gas emissions, conserving biodiversity, providing hydrological services, and offering scenic beauty for recreation and ecotourism. The program is primarily funded through a 3.5% tax on fossil fuel sales, supplemented by grants from the Global Environment Facility (GEF), the Climate Institute (CI), and other sources. The PES program includes various components such as the sale of water services, biodiversity services, and carbon services. Water services are generated through a proposed new water tariff, while biodiversity services are supported by GEF grants and CI contracts. Carbon services involve the sale of Certified Emission Reductions (CERs) and Certified Emission Reductions (CTOs) to international buyers. The program has faced challenges, including inefficiencies due to lack of targeting, undifferentiated payments, and insufficient impact monitoring. However, improvements have been made since 2003, with a focus on innovation and adaptation. The program is considered an important part of a broader package of measures to protect the environment, complementing legal restrictions on deforestation. Challenges ahead include improving monitoring to better target areas and set appropriate payment levels, ensuring sustainable funding, and expanding the program to areas with potential for environmental services. The program aims to capitalize on trust funds and continue its role in promoting environmental sustainability in Costa Rica.Payments for Environmental Services (PES) in Costa Rica, presented by Stefano Pagiola from the World Bank's Environment Department, outline a program that aims to finance environmental services provided by forest ecosystems. The program, established under Forest Law No. 7575 (1996), recognizes four key environmental services: mitigating greenhouse gas emissions, conserving biodiversity, providing hydrological services, and offering scenic beauty for recreation and ecotourism. The program is primarily funded through a 3.5% tax on fossil fuel sales, supplemented by grants from the Global Environment Facility (GEF), the Climate Institute (CI), and other sources. The PES program includes various components such as the sale of water services, biodiversity services, and carbon services. Water services are generated through a proposed new water tariff, while biodiversity services are supported by GEF grants and CI contracts. Carbon services involve the sale of Certified Emission Reductions (CERs) and Certified Emission Reductions (CTOs) to international buyers. The program has faced challenges, including inefficiencies due to lack of targeting, undifferentiated payments, and insufficient impact monitoring. However, improvements have been made since 2003, with a focus on innovation and adaptation. The program is considered an important part of a broader package of measures to protect the environment, complementing legal restrictions on deforestation. Challenges ahead include improving monitoring to better target areas and set appropriate payment levels, ensuring sustainable funding, and expanding the program to areas with potential for environmental services. The program aims to capitalize on trust funds and continue its role in promoting environmental sustainability in Costa Rica.