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Compensation to landowners for forest-derived environmental services has gained international recognition as a mechanism to combat forest loss and fragmentation. This approach is widely promoted, although there is little evidence demonstrating that environmental service payments encourage forest stewardship and conservation. Costa Rica provides a unique case study in which a 1996 Forestry Law initiated environmental service payments and prohibited forest conversion to other land uses. We examined these novel policies to determine their influence on landowner decisions that affect forest change, carbon services, and connectivity in a 2425 km² biological corridor. We used Landsat images to compare land-cover changes before and after 1996, and linked these data to landowner surveys investigating land-use decisions. Carbon stocks and storage in secondary forests were also examined. Forest change observations were corroborated by landowner survey data, indicating that the 1996 Forestry Law and environmental service payments contributed positively to forest retention and recruitment. Socioeconomic conditions also favored forest protection. Rates of natural forest loss declined from -1.43% to -0.10%/yr after 1996. Forest cover and connectivity were maintained through tree plantations and secondary forest recruitment, although forest heterogeneity increased as these forest types sometimes replaced natural forest. Carbon storage in secondary forest approached levels in primary forest after 25-30 yr of succession, although few landowners retained natural regeneration. Secondary forests will persist as minor landscape components without legal or financial incentives. The Costa Rican experience provides evidence that environmental service payments can be effective in retaining natural forest and recruiting tree cover within biological corridors

Consequences of Environmental Service Payments for Forest Retention and Recruitment in a Costa Rican Biological Corridor