Understanding linkages between ecosystem service payments, forest plantations, and export agriculture

[Display omitted] •PES in Costa Rica emerged out of a decade of neoliberal policy formation.•Reforestation payments from PES ultimately subsidize plantation agriculture.•PES becoming agricultural subsidy not related to neoliberal features of the policy. In this paper, I consider how and why payments for ecosystem services (PES) become embedded within a country’s wider land use practices and economic sectors. To do so, I examine the linkages between Costa Rica’s reforestation payments and the country’s agricultural and forestry sectors. I first situate the rise of PES in Costa Rica within a changing political economy of land use by showing how PES emerged during a period of drastic state policy changes toward forestry and agricultural sectors. This was an era that opened political space for PES, but largely left the economic organization of the country’s forestry sector intact. Second, I examine the types of trees that have been planted due to the reforestation modality of Costa Rica’s PES program, and how such trees are used across the wider economy. I find that most trees planted under this program are for the fast growing Melina (Gmelina arborea) tree, a species that is almost exclusively used for the production of wooden pallets for agricultural export. Such an outcome renders Costa Rica’s payments for reforestation an indirect state subsidy for large agribusiness. I situate these findings within geographic and policy debates about PES and neoliberal environmental policy more broadly. I argue that the empirical results presented here have little to do with the policy’s purportedly neoliberal features, but instead, derive from the policy’s insertion within long standing patterns of agricultural production and land use.