Implications of future climatic uncertainty on payments for forest ecosystem services: The case of the East Coast of New Zealand

Ecosystem Services (2018)

https://www.sciencedirect.com/science/article/abs/pii/S2212041617306666

Pine, beef and sheep or indigenous forest?

On New Zealand’s East Coast, the erosion of farmland is an imminent climate change issue that is predicted to drastically increase in future. It’s crucial to the sustainability of the Te Tairāwhiti community that their options for land-use investments be reconsidered in light of these future impacts.

Reforesting eroded land with native trees as an investment option has been put forward, however the long-term nature and associated uncertainties of this needs consideration, which was the objective of this study.  

We complemented a deterministic optimisation approach with Monte-Carlo methods to identify optimal afforestation areas representing uncertainty probabilistically.

For landowners, we identified that the uncertainty and profitability of long-rotation species increased at low discount rates. Additionally, the high profitability odds of the long-rotation alternative compensate its high uncertainty and make it the preferred one even for highly risk-averse owners.

For policymakers, we identified that the benefits necessary to cover erosion-reduction investments would need to be higher than expected to hedge against climatic uncertainty.