The Market Maker: How Costa Rica's First Environmental Lawyer Made Forests Valuable

In 1970, a photograph was taken of a ten-year-old boy in Costa Rica's newly established Tortuguero National Park. The boy, Carlos Manuel Rodríguez, stands with a full head of hair, staring at the camera. In the half-century since, he notes, not only has he lost his hair, but monitored wildlife populations worldwide have declined by an average of 69 percent.

This statistic is the backdrop for an even more striking one Rodríguez now uses as CEO and Chairperson of the Global Environment Facility (GEF). If all mammals on Earth were put on a scale, 94 percent of the total weight would consist of humans, our livestock, and our pets. Just 6 percent would be wild mammals: the whales, jaguars, deer, and elephants.

This 94-percent problem is the central market failure that Rodríguez has spent a lifetime trying to fix. His career is a progression from the local to the global, from a single failed farm in a Costa Rican valley to a $5.33 billion global fund tasked with reversing this ecological math. He defines himself with a precise, three-part formula: "a lawyer by profession, politician by choice, and conservationist at heart". This is not a simple biographical slogan. It is his theory of change.

What Rodríguez learned as a young man was that the "heart" of a conservationist was insufficient. The destruction of nature he witnessed was not a failure of science but a failure of law and politics. To save the 6 percent, he would have to change the economic rules that govern the 94 percent. After proving his model in the laboratory of Costa Rica, he is now attempting to globalize his revolution.

The Hard Lesson of the Orosi Valley

Rodríguez's formative lessons in environmental policy came from his grandfather's farm. He spent his childhood summers at the 440-hectare property in the Orosi Valley, owned by his grandfather, Arturo Echandi Jimenez. Echandi, a third-generation coffee farmer, dedicated about a quarter of the land to coffee and left the remainder as old-growth cloud forest.

This balance was shattered by a government policy. In an effort to "encourage" farming, the government introduced a tax on all land deemed "unproductive," a category that included his grandfather's intact forests. Echandi, a rational economic actor, did exactly what the policy incentivized. He cleared the forest and "converted it into pastureland for dairy cattle".

The result was a catastrophe. The new dairy business collapsed, marked by a "steep fall in milk output." Worse, the "coffee crop was under threat too." By cutting down the trees, his grandfather had "damaged the soil and the water sources on the property".

This was the "hard lesson" that would define Rodríguez's life: misaligned policy does not just harm nature; it destroys the very economic activity it aims to support. The standing forest, he saw, provided essential economic services, but the market and the law valued it at zero.

This personal story unfolded against a backdrop of national trauma. Rodríguez grew up watching "large forest fires used to clear the land for cows and agriculture". He was 12 in 1972, at the height of this destruction, and he realized that "forest conservation was seen as an unproductive activity" because all economic and land-use policies were "stimulating deforestation".

In 1992, as a young lawyer, Rodríguez joined a congressional delegation visiting Costa Rica's Caribbean lowlands to assess environmental degradation. What he saw there would stay with him. A 400-hectare banana plantation had been carved out of what had been, days earlier, untouched primary forest. "It was like you had dropped an atomic bomb in the middle of the Amazon," he recalled. The environment minister in the delegation called the scene a catastrophe. But representatives from the Ministry of Agriculture saw progress—the conversion of "unproductive" forest into agricultural land that could boost the country's economy, which was just emerging from the sharp downturn of the 1980s. The same failure Rodríguez had witnessed on his grandfather's farm was now playing out at industrial scale across the country.

When it came time to choose a career, he was torn between biology and law. His father, a "renowned lawyer," gave him the advice that would shape his pragmatic approach. Studying biology, his father said, might at best make him "the head of the zoo." But studying law would teach him about the "social contract," the "rules," and "how societies organize themselves". To change the outcome, he had to change the rules. Rodríguez chose the rules. He became an "unconventional law student," spending more time with biology students and his weekends in national parks. He later earned a graduate degree in environmental law in the United States, assembling the toolkit he would need to dismantle the system that had bankrupted his grandfather's farm.

Costa Rica's First Environmental Lawyer

In the late 1980s, Rodríguez returned to Costa Rica with his American law degree and a singular distinction: he was the country's first environmental lawyer. It was a profession that barely existed. While Costa Rica had biologists studying its extraordinary biodiversity and conservationists fighting to protect it, there was almost no one who understood how to translate ecological necessity into legal code, policy frameworks, and economic incentives. Rodríguez filled that void.

He worked with biologists, conservationists, and various environmental organizations, building the legal infrastructure that the conservation movement desperately needed. This was the era when Costa Rica was confronting the catastrophic results of decades of deforestation. By the late 1980s, forest cover had plummeted to as low as 21 percent—down from over 75 percent in 1940. The 1961 Law of Land and Colonization, which had granted land titles to those who "improved" land by clearing forest, had done its terrible work. Rodríguez's grandfather's farm was one story among thousands.

But the conservation community was beginning to find its footing. In the 1970s, Mario Boza and Álvaro Ugalde had created Costa Rica's national park system, protecting critical landscapes. Rodríguez worked closely with these pioneers and the institutions they had built—the Ministry of Environment, the Tropical Science Center, the Organization for Tropical Studies. As Costa Rica's first environmental lawyer, he became the legal architect for this emerging conservation infrastructure, translating the vision of Boza, Ugalde, and other conservationists into enforceable law and sustainable policy frameworks.

By the early 1990s, Rodríguez's work had earned him recognition within this tight-knit conservation community. His legal expertise had become essential to the movement. When the opportunity arose to lead the National Parks Service, the same institution Boza had first directed, it was a natural progression. He would later describe his time as parks director as "by far the most joyful time" of his career. He was no longer just writing legal briefs. He was managing the protected areas themselves, seeing firsthand what worked and what failed, which policies were sustainable and which were just paper designations vulnerable to the very forces that had destroyed his grandfather's farm.

The Forest Law

In 1995, Rodríguez was appointed Director of Costa Rica's National Parks Service—the same institution that Boza and Ugalde had built two decades earlier. But his role extended beyond that formal title. Minister René Castro was in the process of merging three separate agencies (National Parks, Wildlife, and Forestry) into a unified system that would become SINAC, the National System of Conservation Areas. Castro delegated the complex bureaucratic reorganization to Nils Solórzano, who recruited Rodríguez as his second-in-command to lead the operational work of consolidating all protected areas. Rodríguez would later describe this period as "by far the most joyful time of my life" because "we created a system of protected areas... we created the institutions, we created the policies." He was the hands-on manager building the institutional framework that would become Costa Rica's globally recognized conservation model.

As the operational head of protected areas, Rodríguez found himself at the center of the country's most consequential environmental policy debate in decades. Despite Costa Rica's celebrated park system, deforestation continued. Previous forestry incentive programs had proven insufficient to reverse the trend. The country needed not another incremental program but a complete reimagining of how it valued its forests. Rodríguez would be instrumental in crafting that transformation.

As parks director, Rodríguez became a key architect of the Forestry Law of 1996 (Ley Forestal 7575). The law had been years in the making, but Rodríguez's role in both ideating and designing the Payment for Ecosystem Services framework was instrumental. The policy debates were fierce. The forestry sector, traditionally the most powerful interest group, wanted to maintain timber production. The agriculture sector saw forests as obstacles to economic development. The conservation sector, with Rodríguez as a leading voice, demanded protection of all remaining natural forests.

The breakthrough came through a carefully crafted compromise. The timber industry would lose access to natural forests. The law would ban all conversion of established forests. But in exchange, they would gain substantial government support for commercial timber plantations. The PES program would pay landowners for reforestation and sustainable forest management. Plantation owners would receive $600 per hectare for the first five years, tax exemptions on planted areas, and access to credits through the new national forest fund, FONAFIFO. The timber industry could continue producing wood, just not from natural forests. It was a deal: conservation won the old forests, industry gained subsidized new ones.

Several external factors made this compromise politically viable. International trade agreements had banned direct public subsidies for timber production, forcing the industry to accept new models. Deforestation was widely acknowledged as a crisis threatening hydroelectric power and the emerging ecotourism industry. And critically, the emerging international carbon market offered a funding mechanism that hadn't existed before—a way to pay for conservation without increasing taxes.

The law that emerged on April 16, 1996, was revolutionary. First came the prohibition: it "banned all conversion of established forests," making deforestation illegal. But Rodríguez and his colleagues knew from bitter experience—from his grandfather's farm and thousands like it—that a ban alone was not enough. If forested land had no economic value while standing, landowners would find ways around the law, and eventually the law would fail.

Next came the innovation that would become Rodríguez's signature achievement: the Pago por Servicios Ambientales (PSA), or Payment for Ecosystem Services program. This was the Orosi Valley lesson encoded into law. The legislation officially recognized that a standing forest provides four critical economic services: carbon sequestration, biodiversity protection, water regulation, and landscape beauty. More importantly, it created a mechanism to pay landowners for protecting those services. The financial engineering was the real breakthrough. The program could not rely on discretionary public funds that might disappear with a change in government or a fiscal crisis. The solution was elegant and logical: a tax on fossil-fuel consumption. Revenue from this tax—a direct charge on a polluting activity—would be earmarked for a national forest fund, FONAFIFO (Fondo Nacional de Financiamiento Forestal). FONAFIFO, in turn, would pay the landowners.

The fuel tax provision triggered the law's most contentious battle. It required a special legislative process because fiscal policy in Costa Rica demanded constitutional scrutiny. The debate reached the National Constitutional Court. Critics argued the tax was regressive, that it would burden poor families who depended on buses and cars. Proponents countered that the cost of inaction—continued watershed degradation, unreliable water supplies, and ecological collapse—would be far higher. The court ultimately sided with the conservationists. The law stood.

Implementation began in 1997. From his position as head of protected areas through 1998, Rodríguez helped oversee the program's first critical years. The math was simple and decisive. Cattle ranching might earn a farmer $42 per hectare per year. The PES program would pay $78 per hectare per year to protect the forest. The market failure was corrected. For the first time in Costa Rican history, it was more profitable to conserve than to destroy.

The Biodiversity Law and the International Stage

While Rodríguez was building the operational framework for protected areas and overseeing the implementation of the Forest Law, he was simultaneously playing another critical role: serving as Costa Rica's Head of Delegation to the United Nations Convention on Biological Diversity (CBD) from 1996 to 2000. This position placed him at the intersection of international environmental diplomacy and domestic policy implementation—a role that would prove essential to the passage of Costa Rica's landmark 1998 Biodiversity Law.

Costa Rica had ratified the CBD in 1994, committing itself to implementing the Convention's three core objectives: conservation of biodiversity, sustainable use of its components, and fair and equitable sharing of benefits from genetic resources. But ratification was one thing; implementation was another. The country needed comprehensive domestic legislation to fulfill these international obligations. Rodríguez, as the primary link between Costa Rica's international commitments and its domestic policy, became the key architect within the Figueres administration for translating CBD mandates into actionable law.

The urgency for such legislation had been made dramatically clear by a controversy that erupted in 1991. That year, Costa Rica's National Biodiversity Institute (INBio), a private non-profit organization, had signed an agreement with the U.S. pharmaceutical giant Merck & Co. The deal granted Merck a right of first refusal on approximately 10,000 plant, insect, and soil samples in exchange for $1 million, scientific equipment, and a promise of future royalties. The arrangement sparked both "euphoria"—perhaps bioprospecting could rival coffee as an export earner—and fierce criticism. Critics framed it as "biopiracy": a private organization selling the nation's genetic patrimony to a foreign corporation with no clear legal framework, no state oversight, and no mechanism ensuring communities would benefit from their traditional knowledge.

The controversy exposed a fundamental regulatory vacuum. Costa Rica had laws protecting wildlife and parks, but nothing governing access to genetic and biochemical resources or the commercialization of traditional knowledge. The 1998 Biodiversity Law was designed specifically to fill this gap. Rodríguez, working closely with civil society leaders Vivienne Solís Rivera and Patricia Madrigal Cordero, helped develop the law's institutional and economic architecture. His role was multifaceted: as Director of National Parks and Special Adviser to the Minister of Environment and Energy (1997-1998), he was the government's lead expert on the conservation areas the law sought to reorganize. As the architect of the PES model from the 1996 Forest Law, he understood how to create economic incentives for conservation. And as Head of Delegation to the CBD, he understood the international obligations the law needed to fulfill.

The law Rodríguez helped design accomplished several revolutionary objectives. First, it formally created SINAC, the National System of Conservation Areas, giving legal authority to the institutional framework he had been building operationally since 1995. Second, it established a new state-controlled Access and Benefit Sharing (ABS) framework, creating the National Commission for Biodiversity Management (CONAGEBIO) as the sole authority to grant access permits to genetic resources. This transferred control from private entities like INBio to the state. Third, it expanded the Payment for Environmental Services model that Rodríguez had pioneered, creating a comprehensive two-part economic architecture: PES would pay for the passive services of standing forests (carbon, water, biodiversity), while ABS would regulate and monetize the active products—the genetic material itself.

The law was approved on April 23, 1998, and entered into force on May 27, 1998—during the final days of the Figueres administration. It was one of the world's first comprehensive national-level responses to the CBD, earning Costa Rica the prestigious Future Policy Gold Award in 2010. Most significantly, the law introduced a radical legal innovation to protect community rights: "sui generis community intellectual rights." These rights were recognized "by the simple existence of the cultural practice or knowledge," requiring no registration or formal declaration, and existed outside the conventional patent system. It was an attempt to solve the biopiracy problem by ensuring that indigenous and local communities' traditional knowledge would be legally protected even when it didn't fit Western intellectual property frameworks. For Rodríguez, the law represented the completion of a comprehensive legal and economic architecture for conservation—a framework that would later inform his global work.

From Costa Rica to the World

In 2002, Rodríguez was appointed Costa Rica's Minister of Environment and Energy. He had already served as Vice-Minister since 1998, and would return to the full ministerial post again in 2018. He inherited a program that was working but fragile. The PES system had been operational for five years, and Costa Rica's forests were beginning to recover. But the program faced constant political attacks, funding uncertainties, and implementation challenges. Rodríguez's role as minister was not to create the system—that had already been done—but to defend it, refine it, and prove it could work at scale.

One of his first challenges came from an unexpected source. The minister of finance initially objected to accepting roughly $40 million in World Bank and GEF financing to expand the PES program, arguing it wasn't a priority given Costa Rica's existing debt. Rodríguez later reflected on his mistake: "I didn't realize that ministers of finance are like reptiles; they're cold-blooded. They don't speak any language other than finance and economics, and I wasn't speaking that language." He went back to his team and hired several economists to conduct studies on the economic benefits of forests. When he returned to the finance minister with data showing that "national parks represented just 30% of the nation's forests but brought in hundreds of millions of dollars in revenue," the minister reversed his position and supported the loan.

The expanded program also began attracting private buyers of environmental services. FONAFIFO financed a study to demonstrate to hydroelectric companies the benefits they received from forested watersheds: "There was a steady flow of water, with less solids that could damage their machines." The study led to agreements with four hydroelectric companies, which collectively funded or partially funded PES contracts covering more than 15,000 hectares of forested land. It was proof that the market-based model could work: companies that benefited from ecosystem services could be convinced to pay for their protection.

The results spoke for themselves. Costa Rica's forests recovered from their low of roughly 21 percent to over 52 percent today, with some estimates as high as 60 percent. The model has since been copied around the world and provided the political impetus for the United Nations' REDD+ program. But the success was not without complexity. Some called the program "redundant," arguing the 1996 logging ban was the real driver. More significantly, critics noted social inequities: the program benefited "mostly large landowners and companies," while "small landowners and family-based producers have only marginally benefitted." It was an imperfect "learning by doing" process. Its greatest achievement was not flawless implementation but the political and economic precedent it established.

During his ministerial terms, Rodríguez also oversaw Costa Rica's push toward clean energy, helping the country achieve 100 percent renewable electricity for long stretches. But this too came with hard lessons about the fragility of even gold-standard environmental achievements. Those lessons would inform his later global work.

After his ministerial work in Costa Rica, Rodríguez spent years as Vice-President for Global Policy at Conservation International, working in 30 tropical countries to help governments implement PES programs. In 2020, he was appointed CEO of the Global Environment Facility.

At the GEF, Rodríguez secured a record $5.33 billion in funding and deployed it through programs in over 170 countries. The money funds specific work: protecting the Amazon and Congo rainforests, creating wildlife corridors across borders, supporting small farmers to shift away from deforestation-driven agriculture, and helping coastal nations protect ocean ecosystems. But Rodríguez's real focus is on changing government policies. The GEF conditions some funding on countries reforming their own harmful subsidies, the billions spent annually supporting industrial fishing, forest-clearing agriculture, and fossil fuels. It's the same model as Costa Rica: ban the destructive practice, create economic incentives for conservation, fund the transition.

The Pragmatist's Forest

The "hard lesson" of the Orosi Valley, the story of a policy that forced a farmer to destroy his own land, was the beginning of Rodríguez's journey. But the story did not end in failure.

In a later reflection, Rodríguez shared the end of the story. His grandfather's farm, now under his family's stewardship, is a "prosperous farm with 120 hectares of coffee and nearly 300 hectares of restored forests". It now receives annual payments from the very Payment for Ecosystem Services program he championed.

That farm, he says, is "proof that nature can be resilient, and that nature-positive governance can make an enormous difference over the long-term when we prioritise it".

This final image is the most accurate portrait of Carlos Manuel Rodríguez. He is not an idealist. He is a pragmatist. He is the lawyer who knows the rules, the politician who builds the coalitions, and the conservationist who understands the stakes. His core belief, honed over 40 years from a single valley to the entire globe, remains unchanged. "The best climate technology," he insists, "is nature itself". His life's work is not about "saving" nature in a vacuum. It is about methodically and relentlessly rewriting the human and economic rules so that the world can, as he says, "pursue the route towards bio-prosperity". The restored forest in the Orosi Valley is not just a forest. It is a legal and economic argument that finally won.

References & Further Reading