Economic profitability of afforestation in Thailand and the Philippines

Abstract

This study aimed to assess the profitability of community afforestation programmes in Northeast Thailand and the Philippines. Financial and economic profitability were assessed using market prices and economic efficiency values respectively, for goods and factors of production. Environmental-economic profitability was evaluated by adding the monetary values of on-site costs of soil erosion, transpiration, nutrients lost in harvesting and carbon sequestration to the assessed economic profitability estimates. Economic profitability of afforestation was 40–50% higher than financial profitability, and environmental- economic profitability 6–100% higher, than economic profitability. Among the studied environmental impacts of afforestation, carbon sequestration and transpiration were most important in economic terms. A decrease in the discount rate improved afforestation profitability.