Forests and the economy, a fruitful alliance

Abstract

Preserving Guatemala’s natural forests has been a top priority. One of the most successful measures in this regard has been the implementation of forest incentive programs. This study estimates the contribution of the forestry GDP to the economy of Guatemala by adjusting for the total volume of products that forests provide to the national economy, as well as the performance of establishing plantations of Pinus maximinoi H. E. Moore –the tree with the highest planting intention and most accessible in the sawmill industry. The raw material yield of this conifer was assessed, along with the most suitable site index conditions for granting the incentive as a forest policy instrument for woodland restoration. It is concluded, at least for this species, that the incentive is not enough to motivate plantation establishment in regions with a site index below eight and might not be necessary from a site index of nine onward. The study shows that a problem preventing these schemes from being more effective is setting a fixed incentive rate per hectare at the national level. For protection programs, the per-hectare rate is suitable to cover the average opportunity cost of the land —at least during the years payment is received— for some crops, but not to cover the opportunity cost compared to more productive land uses (vegetables, coffee, cereals, and cardamom). On the other hand, forest GDP was estimated at 3.9% prior to applying adjustments for forest loss resulting from deforestation processes, as well as the opportunity cost of lost carbon credit benefits from non-sequestered CO₂ emissions. Once these factors are applied, the adjusted forest GDP decreases to 3.07% for 2020.