Using payment for ecosystem services to meet national reforestation commitments: impacts of 20+ years of forestry incentives in Guatemala

Abstract

International environmental initiatives, such as the Bonn Challenge and the UN Decade on Restoration, have prompted countries to put the management and restoration of forest landscapes at the center of their land use and climate policies. To support these goals, many governments are promoting forest landscape restoration and management through financial forestry incentives, a form of payment for ecosystem services. Since 1996, Guatemala has implemented a series of forestry incentives that promote active forest landscape restoration and management on private and communal lands. These programs have been widely hailed as a success with nearly 600 000 ha enrolled since 1998. However, there has been no systematic assessment of the effectiveness of these programs on preserving and restoring Guatemalan forests. This study evaluates the impacts of over 16 000 individual PES projects funded through two incentive programs using a synthetic control counterfactual. Overall, a program for smallholders resulted in lower rates of forest loss, while a program for industrial timber owners led to greater gains in forest cover. Across policies, we found dramatically higher forest cover increases from restoration projects (15% forest cover increase) compared to plantation and agroforestry projects (3%–6% increase in forest cover). Projects that protected natural forest also showed a 6% reduction in forest loss. We found forest cover increases to be under 10% of total enrolled area, although positive local spillovers suggest this is an underestimate. Restoration projects show the most promise at promoting forest landscape restoration, but these benefits need to be weighed against priorities like resilience and rural development, which may be better served by other projects.