Costa Rica has a continental area of 5 million hectares, extending from northwest to southeast between the Pacific and the Atlantic Oceans and internally divided by a mountain range. These characteristics result in a variety of microclimates and different life zones, which support one of the highest levels of biodiversity on the planet, with a large number of endemic species.
By the 1960s, Costa Rica had begun to experience rapid deforestation, owing to the expansion of cattle farming and general agricultural development. Between 1973 and 1989, deforestation reached one of the highest rates in the world, with an average of 32,000 hectares of forest cut down each year. Yet today Costa Rica is a pioneer in forest conservation.
This transformation has come about through the establishment of an integrated system of Conservation Areas as well as effective legislation, including a ban on future land-use change on all forested land. Specific elements that have enabled progress in environmental outcomes include the successful development of a National System of Protected Areas and the passing of comprehensive legislation to protect Costa Rica's forests.
Innovative incentive structures have also been important. Perhaps the most significant innovation has been the establishment of a national Payments for Environmental Services programme (PSA), which provides direct financial incentives to landowners to conserve forests instead of converting them to agricultural land.