Cash falling onto a forest, symbolizing payments for ecosystem services.

Can Cash Really Save Our Forests? The Truth About Paying for Ecosystems

Soraya Malik in Climate & Environment December 2025 • 4 min read.

"Discover how financial incentives are changing the game in forest conservation and whether these strategies can truly reverse deforestation trends worldwide."

Deforestation continues to be a critical environmental issue, contributing significantly to global carbon emissions. As trees are cut down, they not only stop absorbing carbon dioxide but also release stored carbon back into the atmosphere, accelerating climate change. This is particularly concerning in low-income countries, where deforestation rates are often highest.

To combat this, conservation strategies like REDD+ (Reducing Emissions from Deforestation and Forest Degradation) have been developed to provide financial incentives for developing countries to preserve their forests. One increasingly popular approach is Payments for Ecosystem Services (PES), where forest owners are directly paid to keep their forests intact. But does this approach really work, and is it worth the cost?

A fascinating study conducted in Uganda sought to answer these questions by implementing a randomized controlled trial. Researchers evaluated the impact of offering cash payments to forest-owning households in exchange for conserving their forests. The results offer valuable insights into the potential and challenges of using financial incentives to protect our planet's vital ecosystems.

The Ugandan Experiment: How Cash Payments Impacted Deforestation

Cash falling onto a forest, symbolizing payments for ecosystem services.

The study, conducted in 121 villages in Uganda, focused on private forest owners (PFOs). Sixty of these villages were randomly selected to participate in a PES program where households received annual payments of 70,000 Ugandan shillings (approximately $28 USD in 2012) per hectare of forest they conserved. For two years, researchers monitored changes in tree cover using high-resolution satellite imagery to compare deforestation rates between the treatment villages (those receiving payments) and control villages.

The primary goal was to determine if the financial incentives could effectively reduce deforestation. However, researchers also looked at secondary goals to see if the payments caused other changes. These secondary goals include how the payments impacted emergency forest conservation, or shifted tree cutting.

Additionality: Would the payments lead to genuine conservation that wouldn't have happened otherwise?
Leakage: Would deforestation simply shift to nearby, unprotected areas?

The findings revealed a notable difference: tree cover in the treatment villages declined by 4.2% during the study period, compared to a more significant 9.1% decline in the control villages. This suggests that the PES program did have a positive impact on reducing deforestation. But the story doesn't end there. The research also considered the economic implications by valuing the delayed carbon dioxide emissions resulting from the reduced deforestation. They concluded that the environmental benefit was 2.4 times greater than the program's costs.

The Bigger Picture: Can Payments Save Our Forests?

The Ugandan study provides compelling evidence that PES programs can be a valuable tool in forest conservation. By offering direct financial incentives, these programs can encourage forest owners to protect their trees and contribute to global climate change mitigation efforts. However, the success of such programs depends on careful design, effective implementation, and ongoing monitoring. While PES programs might not be the only solution to stopping deforestation, they represent a promising step towards creating a more sustainable future for our planet’s forests.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.1126/science.aan0568, Alternate LINK

Title: Cash For Carbon: A Randomized Trial Of Payments For Ecosystem Services To Reduce Deforestation

Subject: Multidisciplinary

Journal: Science

Publisher: American Association for the Advancement of Science (AAAS)

Authors: Seema Jayachandran, Joost De Laat, Eric F. Lambin, Charlotte Y. Stanton, Robin Audy, Nancy E. Thomas

Published: 2017-07-21

Everything You Need To Know

What is Payments for Ecosystem Services (PES), and how does it aim to help with deforestation?

Payments for Ecosystem Services (PES) is a conservation strategy where forest owners receive direct financial incentives to keep their forests intact. The idea behind PES is to provide economic motivation for preserving forests, thereby reducing deforestation and its contribution to global carbon emissions. By offering payments, PES programs aim to make conservation financially attractive, encouraging landowners to protect their trees rather than cutting them down for alternative land uses. The effectiveness of PES depends on careful design, implementation, and consistent monitoring to ensure genuine conservation and prevent unintended consequences like leakage.

In the Uganda study, what were the key findings regarding the effectiveness of cash payments in reducing deforestation?

The Uganda study revealed that offering cash payments to forest-owning households significantly reduced deforestation. In villages where households received payments of 70,000 Ugandan shillings (approximately $28 USD in 2012) per hectare, tree cover declined by 4.2% over the study period. In contrast, control villages (those without payments) experienced a more substantial decline of 9.1%. This indicates that Payments for Ecosystem Services (PES) can effectively reduce deforestation rates. Furthermore, the study found that the environmental benefit from delayed carbon dioxide emissions was 2.4 times greater than the program's costs, highlighting the economic viability of PES as a conservation strategy.

What are 'additionality' and 'leakage' in the context of Payments for Ecosystem Services (PES) programs, and why are they important considerations?

In the context of Payments for Ecosystem Services (PES) programs, 'additionality' refers to whether the conservation achieved through the payments would not have occurred otherwise. It's crucial to ensure that payments lead to genuine conservation efforts that go beyond what would naturally happen. 'Leakage' refers to the potential shift of deforestation activities to nearby, unprotected areas as a result of the PES program. If deforestation simply moves to a different location, the overall environmental benefit is undermined. Both additionality and leakage are important considerations because they can significantly impact the overall effectiveness and cost-efficiency of PES programs. Addressing these issues requires careful monitoring, adaptive management, and consideration of broader landscape-level dynamics.

How do strategies like REDD+ relate to Payments for Ecosystem Services (PES) in the fight against deforestation?

REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and Payments for Ecosystem Services (PES) are both strategies aimed at combating deforestation by providing financial incentives for forest conservation. REDD+ is a broader framework developed under the United Nations, offering financial incentives to developing countries for preserving their forests to reduce carbon emissions. PES is a more specific approach where forest owners are directly compensated for maintaining their forests. PES can be a mechanism used within REDD+ initiatives to implement conservation activities at the local level. Both strategies recognize the importance of economic incentives in promoting forest conservation and contributing to global climate change mitigation efforts.

What are the broader implications of the Uganda study's findings for global forest conservation efforts and climate change mitigation?

The Uganda study's findings have significant implications for global forest conservation efforts and climate change mitigation. The study offers compelling evidence that Payments for Ecosystem Services (PES) can be a valuable tool for reducing deforestation and its associated carbon emissions. The study suggests that direct financial incentives can effectively encourage forest owners to protect their trees. The success of such programs hinges on careful design, effective implementation, and ongoing monitoring. PES programs are not a singular solution, but a promising step towards creating a more sustainable future for our planet’s forests.