Forest conservation versus conversion under uncertain market and environmental forest benefits in Ethiopia: The case of Sheka forest

► Uncertainties, irreversibility, and externalities are modeled in Land use decisions. ► Treating forests benefits as stochastic results in higher optimal forest stocks. ► Sub-optimal decision result from not considering global environmental externalities. ► Climate change effect on agriculture leads to lower optimal forest stock. ► Higher social discount rates encourage deforestation over preservation.