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. 2023 Dec 15;14(1):8359.
doi: 10.1038/s41467-023-43861-4.

Mixed success for carbon payments and subsidies in support of forest restoration in the neotropics

Katherine Sinacore  1 , Edwin H García  2 , Alex Finkral  3 , Michiel van Breugel  4   5 , Omar R Lopez  6 , Carlos Espinosa  7 , Andrea Miller  8 , Theodore Howard  9 , Jefferson S Hall  10
Affiliations

Mixed success for carbon payments and subsidies in support of forest restoration in the neotropics

Katherine Sinacore et al. Nat Commun. .

Abstract

Restoration of forests in low- and middle-income countries (LMICs) has the potential to contribute to international carbon mitigation targets. However, high upfront costs and variable cashflows are obstacles for many landholders. Carbon payments have been promoted as a mechanism to incentivize restoration and economists have suggested cost-sharing by third parties to reduce financial burdens of restoration. Yet empirical evidence to support this theory, based on robust, dynamic field sampling is lacking. Here we use large, long-term datasets from Panama to evaluate the financial prospects of three forest restoration methods under different cost-sharing and carbon payment designs where income is generated through timber harvests. We show some, but not all options are economically viable. Further work combining growth and survival data from field trials with more sophisticated financial analyses is essential to understanding barriers and realizing the potential of forest restoration in LMICs to help meet global carbon mitigation commitments.

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Conflict of interest statement

The author declares no competing interests.

Figures

Fig. 1
Fig. 1. Net present value by land use, support structures, and carbon payments.
Net present value (NPV; US$ ha−1) of three restoration methods and cattle at an interest rate of 7%, including growth and price variability. a NPV of land uses with carbon payments (gold) and without carbon payments (green) with no (zero), half, and full financial support. Open circles represent the mean NPV at 7%. b Land use types. Colored boxes represent the land use type, with specific species included in the plantation and enrichment planting restoration methods. NA represents not applicable as support structure not applied to these land uses.
Fig. 2
Fig. 2. Naturally regenerated secondary forest net present value (US$ per hectare) by interest rate (%).
NPV of ten timber species (see Methods) combined by financial support level and carbon payment options (green: with carbon payment; gold: without carbon payment). The horizontal red dashed line represents where NPV is equal to zero. The vertical blue dashed lines represent an interest rate of 4% and 13%. Lighter shading represents 90% credible intervals and darker shading represents 95% credible intervals around the mean.
Fig. 3
Fig. 3. Enrichment plantings net present value (NPV, US$ per hectare) by interest rate (%).
NPV by financial support level and carbon payment options (green: with carbon payment; gold: without carbon payment). The horizontal red dashed line represents where NPV is equal to zero. The vertical blue dashed lines represent an interest rate of 4% and 13%. Lighter shading represents 90% credible intervals and darker shading represents 95% credible intervals around the mean. For full data set of species planted see SI.
Fig. 4
Fig. 4. Native species plantation net present value (US$ per hectare) by interest rate (%).
NPV of two native species plantings by financial support level and carbon payment options (green: with carbon payment; yellow: without carbon payment). The red dashed lines represents where NPV is equal to zero. The vertical blue dashed lines represent an interest rate of 4% and 13%. Lighter shading represents 90% credible intervals and darker shading represents 95% credible intervals around the mean. Note: the NPV with and without carbon payments nearly overlap entirely across the range of interest rates and NPVs for all three species. For full data set of species planted see SI.
See this image and copyright information in PMC

References

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