Costa Rica is divided administratively into seven provinces, which are in turn subdivided into Cantones, 81 in all, and finally into Districts. For purposes of environmental management by the National System of Conservation Areas (Sistema Nacional de Areas de Conservación; SINAC) the entire national territory is also split into eleven Conservation Areas.

From the 1930s to the mid- 1980s, successive governments promoted colonization as a way to increase agricultural productivity. Costa Rica created the majority of its national parks in the late 1970s and early 1990s and introduced its first forestry incentives in 1986, the Forest Payment Certificate (CAF) for plantations (PORRAS et al 2012). Forest cover began to increase from 1987 onwards (GOCR 2011), helped by a crash in the international price of beef, by the evolution of the CAF to include forest management (CAFMA) and by the passage of a new Forestry Law in 1996.

The 1996 Forestry Law, as regulated by Decree 25721 of 1997, provides the current framework for forest management in Costa Rica. The policies it sets are strongly conservationist: (i) converting forests, even in private lands, to other land uses is prohibited; (ii) no harvesting of forest resources is permitted from State forests or of trees on steep inclines or protecting water sources; (iii) harvesting of private forest resources may only be carried out with certified management plans in place; and (iv) harvested wood may not be exported. Costa Rica’s governance framework and the territorial reach of its environmental management institutions ensure high rates of compliance.

If anything, the pendulum has now swung too far the other way. The strict protection of natural forests and the high barriers to sustainable forest management have led to over extraction from less-well protected agricultural lands and plantations (GOCR 2011). One of the main policy thrusts of the R-PP and ER programmes is therefore to increase the production and use of sustainable timber, both as a way of giving forests additional economic utility and as a way of sequestering extra carbon through increased use of long lasting harvested wood products (HWP) (GOCR 2013b).

Costa Rica’s national protected areas are known as Protected Wildlife Areas (Areas Silvestres Protegídas; ASP). There are seven different management categories, protecting a total of 26.2% of its territory (GOCR 2009). The categories most relevant to forests are: (i) National Parks; (ii) Biological Reserves; (iii) National Wildlife Refuges; and (iv) Forestry Reserves. The remaining categories are: (v) Wetlands; (vi) Protected Marine Areas; and (vii) Protective Areas, which are strips of territory along land borders and coastlines.

National Parks and Biological Reserves are the strictest management category and together contain 22% of the country’s forest (GOCR 2011). These should all be State property, having been expropriated or compulsorily purchased from pre-existing owners. However in many cases private rights persist, either because payment has not yet been made (CORBERA et al 2011) or because the historic issues with the land cadastre and registry which granted private rights subsequent to the declaration of the protected area. National Wildlife Refuges and Forestry Reserves may be private, public or mixed. Together they contain 19% of the country’s forest (GOCR 2011) and productive use is permitted, albeit heavily regulated.

The country’s 24 Indigenous Reserves contain 10% of the country’s forest (GOCR 2011), including many of the larger intact tracts. The 1977 Indigenous Law prevents them from converting forests while Decree 26511 of 1997 prevents them from commercialising their forest resources. CORBERA et al (2011) argue that this has negatively impacted indigenous livelihoods without necessarily demonstrating an increase in forest cover.

Exploitation of the 50% of forest that is found in private land is permitted via a management plan. The plan must be prepared by a forestry engineer and approved and overseen by a Forestry Regent (Regente Forestal), registered with the trade body, the College of Agricultural Engineers (CIAgro). Some interventions will also require a separate environmental impact assessment, which must be reviewed and approved by the National Environmental Technical Secretary (SETENA). Under the Forestry Law, owners of plantation forests are free to harvest their timber. However, the requirement for a transit permit has acted as an obstacle to their ability to sell the timber.

The main forestry policy instrument in Costa Rica is the Payment for Ecosystem Services Programme (PPSA), which began in 1997. The mix of activities and volumes supported by PPSA changes year-to-year, however, in general it funds forest protection, regeneration and plantations for five or ten years depending on the modality. As of 2010 PPSA had protected a total of 710,000 Ha, of which 504,000 Ha were still within the programme (PORRAS et al 2012; GOCR 2011). The Ministry of Agriculture and Livestock (MAG) operates a separate, smaller scheme of subsidies, the Programme to Develop Sustainable Agricultural Production (PFPAS). PPFAS is aimed at increasing small and medium-scale agricultural producers' income and living standards by helping them develop sustainable production systems, including through reforestation and the implementation of silvo-pastoral systems.

Though sustainable forest management of natural forests is permitted by law and is supported by the PPSA, in practice the cost and difficulty of preparing and implementing management plans favours protection over forest management (GOCR2011). PPSA is also heavily weighted towards protection; approximately 80% of the PPSA in 2013 is earmarked for protection and less than 1% for forest management. The conditions for forest management are so restrictive that Takacs (2009) argues that PPSA should be seen more as a compensation for not breaking the law than as an incentive to conservation, which is in any case obligatory.

SINAC is the public body responsible for directly administering Costa Rica's protected areas and for promoting and controlling conservation and sustainable natural resource (including forest) management in the entire national territory. It has police powers to the extent that it has the power to enter private property to carry out checks. The 1996 Forestry Law also gives SINAC responsibility for measuring forest cover. Within the PPSA and REDD+ SINAC's two main roles are: (i) monitoring and controlling deforestation and verifying that the owners of private forest have complied with their forest management plan; and (ii) mapping forest cover and preparing the forest inventory.

PPSA will form the core of the country’s REDD+ programme, the third generation of incentives to reduce deforestation in Costa Rica (GOCR 2011). Under REDD+, Costa Rica aims to strengthen the range of institution involved in forest management, to increase the production and use of wood products and to recruit a further 342,000 Ha to PPSA (focused on inducing early regeneration in private land and Indigenous Reserves and on extra areas for protection of old growth forests but also including 72,000 Ha of new timber plantations and agroforestry systems). Approximately 20% of the total 108m tC02e that it expects to reduce will come from simulating the production and use of harvested wood products (GOCR 2013a). Costa Rica acknowledges in its ER-PIN that this will require it to make sustainable forestry management easier.

At the time of writing (December 2013) Costa Rica has not entered into a Voluntary Partnership Agreement (VPA) with the EU Forest Law Enforcement, Governance and Trade (FLEGT) (FAO 2013). Costa Rica is an active participant in the Law Enforcement for Forests (LEAF) project, which is funded by NORAD and implemented by Interpol and the United Nations Environment Programme (NORAD 2013).