Forest ecosystem services in the tropics: an imperfect assessment of their contribution to welfare, and environmental policy implications

Introduction: The specific relation between ecosystem services (ES), land use systems productivity and welfare is complex and poorly understood.Objective: To analyze the relationship between natural capital and welfare in the Agriculture, Forestry and Other Land Use (AFOLU) sector to assess Ecosystem Services contribution to agriculture, forestry and fishing value added (GDP [Gross Domestic Product]) and analyze policy implications.Materials and methods: Using land use allocation variables, forest transition model and land use GDP for 97 tropical countries, the production function of AFOLU sector was estimated using a linear regression model and a bootstrap method. The properties of the function were analyzed, and the optimal land allocation was calculated.Results and discussion: There is a direct contribution and an indirect contribution from forest ecosystems to GDP. The direct effect is manifested through the partial elasticity of forestland (P < 0.05). The indirect effect is reflected through the production scale (P < 0.05). Partial elasticity of agriculture is significantly higher than partial elasticity of forestland (P < 0.05) and production scale increases as forestland is depleted (P < 0.05). In addition, optimal land use indicates that 75 countries have forest surplus (13.2 Mkm2) and 22 forest deficit (1.5 Mkm2).Conclusions: Forest ecosystems in the AFOLU sector in the tropics produce ecosystem services for society. However, these contributions are dwarfed by agricultural land productivity.