Economic valuation of ecosystem services from secondary tropical forests: trade-offs and implications for policy making

Natural regeneration of secondary forests can be an important source of recovery of ecosystem services (ES) critical for humanity, especially for climate change mitigation and adaptation goals. However, natural regeneration entails synergies and trade-offs across ESs and across stakeholders. To evaluate these trade-offs, we assessed the economic value of four ESs along the course of a natural regeneration process of tropical dry forests of the Pacific Coast of Mexico, and examined how this can inform the design of Payment for Ecosystem Services (PES) schemes incentivizing forest restoration. We estimated the monetary value of two provisioning ESs -forest products and fodder for calves-, using contingent valuation and direct market valuation methods, and two regulating ESs -carbon stocks and carbon sinks- using the voluntary carbon market prices and the social cost of carbon. We assessed these ESs in four natural regeneration stages: pasture, young secondary forest (0 to 12 years of natural regeneration), intermediate secondary forest (between 12 and 25 years of natural regeneration), and old-growth forest (more than 25 years of natural regeneration or primary forests). Results indicate that throughout the course of the natural regeneration process, there are changes in the magnitude of the trade-offs between regulating and provisioning ESs. We find a clear trade-off between regulating and provisioning ESs in the early stages of natural regeneration. However, as secondary forests grow older provisioning ESs recover, creating synergies rather than trade-offs in later stages of natural regeneration. Our results suggest a PES aiming to increase climate regulation services should focus on the carbon sink potential of young and intermediate secondary forests, as this would provide the greatest additionality and mitigation. We also showed the relevance of using a portfolio of economic valuation methods that can include a wider range of values for understanding landholders' preferences. While with direct market valuation methods we found that young secondary forests have the lowest economic value as compared to other natural regeneration stages, contingent valuation showed that landholders value young secondary forests the most because of their potential - future - land use (i.e. the possibility of converting it back to pasture).