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This study assesses the impacts of Costa Rica’s Payments for Environmental Services (PES) scheme in relation to reforestation activities as a source of carbon sinks. One of the aims is to test a methodology based on the five assets approach of the Sustainable Livelihoods framework. The study finds that the PES scheme has had important positive impacts on financial, human, social and natural assets. The area of negative impact has been for physical assets because the PES has contributed to a greater use of existing infrastructure, particularly roads, and has not generated improvements.