Economic Feasibility of Tropical Forest Restoration Models Based on Non-Timber Forest Products in Brazil, Cambodia, Indonesia, and Peru

Abstract

Mobilizing funds is a major challenge to achieve scalable Forest Landscape Restoration projects. While pure ecological restoration may not be a feasible investment from the private perspective, combining native species with non-timber forest products (NTFP) species may be a solution for reaching large scale and financially sustainable forest restoration. This study addresses potential species combinations for 12 restoration models, three models being based in pure ecological restoration and nine models being based on agroforests with NTFP, their economic costs, and benefits in tropical forests in Brazil, Peru, Cambodia, and Indonesia. A total of 12 semi-structured interviews were conducted to capture the models’ productivity and prices. As for the prices that the producers did not know, specialized stores were consulted in the cities of the collection. The starting investment to restore 01 hectare (ha−1) of tropical forest ranged between US $104 and $7736, with an average of $1963 ha−1 and a standard deviation of $2196 ha−1, considering the 12 cases evaluated in 2018 and 2019. From nine restoration models that had economic purposes, financial indicators showed a median net present value (NPV) of $1548 ha−1, and a median internal rate of return of 22%, considering a discount rate of 10%. The NPV varied between $−685 ha−1 and $55,531 ha−1. Costs of pure ecological restoration were on average 42% lower than agroforestry systems, but did not produce direct income from NTFP, therefore yielding negative NPV. The study demonstrated the economic feasibility of seven of nine models that had economic objective, showing that there are promising business cases for private investment in tropical forest restoration.