Design of tropical forest conservation contracts considering risk of deforestation

Payments for Forest Conservation (PFC) programs financially compensate forest owners to maintain and increase the provision of ecosystem services. Nonetheless, their effectiveness and additionality in preventing deforestation and degradation remain contested. The design of PFC contracts can influence landowner participation and in-turn a program's prospects for additionality. We examined preferences for select PFC contractual attributes among over 200 private forest owners in Ecuador's Amazon basin using a discrete choice experiment. Forest owners at high-risk of deforestation, as compared to others of lower risk, were almost eight-times more likely to select contracts that allowed timber harvest under a management plan, about three-times more likely to select contracts managed by local municipalities or international NGOs, and showed stronger preferences for long-term contracts. To increase enrollment of forest lands at higher risk of deforestation and degradation PFC contracts might need to reconsider the benefits of increasing financial incentives, pursue administration through local municipalities or international NGOs, allow sustainable timber harvesting, and seek permanent agreements.