- Should the world pay people to refrain from their destroying forests, a new commentary asks?
- There is something inherently uncomfortable about paying someone to do ‘nothing’ like not cut down their rainforest, but in reality, the value of these places’ ecosystem services and climate regulation is not much different from dividends shareholders earn by owning stocks.
- “By compensating landholders for the services their forests provide, we recognize their true value and offer a pragmatic response to deforestation, biodiversity loss, and climate change,” the author argues.
- This article is a commentary. The views expressed are those of the author, not necessarily Mongabay.
During my 2023-24 IIE Rodman C. Rockefeller Centennial Fellowship research in eastern Panama, I walked through my neighbor Johnson’s land (not his real name), discussing the 18 hectares (44 acres) of steeply inclined secondary forest he has left on his property. As we wandered along the forest’s edge, he turned to me and asked, “How much will you pay me not to cut this forest down?”
His words stopped me in my tracks.
Over the past five years of living and working in eastern Panama, I have met dozens of individuals and groups of landholders who value biodiversity and recognize the importance of preserving intact rainforest. At the same time, my overriding observation is that most of my neighbors, pressured by economic demands and following local tradition, place a higher value on land clearing for farming and cattle ranching. Cutting down trees is called “limpieza” or “cleaning up.” The use of fertilizers, herbicides, and pesticides is referred to as “medicina,” or medicine. Fear of the forest, with its snakes and jaguars, and a preference for open, manicured landscapes further reinforce this tendency.
The prevailing perception is, ‘There is enough forest here.’ Indeed, our communities abut the Tumbes-Chocó-Magdalena bioregion, a vast chain of forests stretching from eastern Panama to Peru, that is among the most biodiverse regions in the world. On a clear day, you can see the forest of our Indigenous Guna neighbors as far as the eye can see, down to the shores of the Caribbean.
In reality, however, eastern Panama’s rainforests, both inside and outside its Indigenous territories, are in danger. Global Forest Watch reports a loss of 117,000 hectares (289,000 acres) of total forest cover in Darién (the easternmost region of Panama) between 2001-2023, equivalent to 10% of its area and representing 23% of all deforestation in Panamá. In the same time period, Darién lost 21,500 hectares (53,100 acres) of primary forest, representing 2.9% of its total. This comes at the surreal moment in which the earth system has begun demonstrating obvious signals of abrupt climate change, with atmospheric CO2 measurements around 430 ppm, marine and terrestrial carbon sinks failing, record high sea surface temperatures, record low global ice levels, widespread fires, floods, and catabolic ecosystem alterations. Furthermore, geopolitical feedback loops continue to decimate these areas, already resulting in massive human migrations, at a rate of 60,000 per month through our bioregion.
Systemic barriers undermine progressive Panamanian laws designed to protect rainforests. Forest Governance & Policy reports that inconsistent official data, lack of transparency, weak enforcement, and impunity result in nonexistent and uneven application of environmental laws. According to a 2020 Forest Watchdog report financed by the UNDP Global Environmental Fund Small Grants Program, in remote regions like Darién loggers either extract wood illegally or exploit smallholders by offering assistance with land titling, subsistence logging permits, and road access, while taking the lion’s share of the profits. Cleared land, along with the cattle it supports, becomes a valuable financial asset, often used as collateral for bank loans that would otherwise be unattainable. This further incentivizes deforestation. For small landholders like Johnson living at the forest’s edge with limited resources, the forest is more valuable as planks, fence posts, fertile agricultural land, and pasture, than as habitat for wildlife.
Panama is not unique in this regard. As Jared Diamond described in his 2004 book How Societies Choose to Fail or Succeed, throughout history, civilizations have expanded through deforestation, often to their own detriment — the Yucatán, Greenland, and most of Europe are notable examples. What makes Panama unique is that it has preserved a substantial portion of its intact forest, particularly in areas that are harder to reach or are under the stewardship of Indigenous communities, but are now under intense logging pressure.
Against this backdrop, Johnson’s question underscores a deep tension that arose in my conversations with both local and global climate activists in addition to project developers: Should the world pay people to refrain from destroying forests? What does this mean for long-term conservation? How can we catalyze longer-term cultural changes that encourage stewardship of our ecological systems?
During my fellowship interviews, the idea of a national program that compensates landholders for growing forests was never seriously considered. This is despite the existence of laws about incentives for conservation, for example, Law 41 of 1998, the General Environmental Law of Panama, and Law 69 of 2017, which creates an incentive program for forest coverage and the conservation of natural forests. Despite similar programs in the Panama Canal watershed, namely the Environmental Economic Incentive Program of the Canal Authority of Panama that pays landholders $130 per hectare of forest per year for ‘forest protection and vigilance’ and the existence of such programs in other Central American countries, including Mexico, Guatemala, and Costa Rica.
Moreover, many experts and practitioners interviewed distanced themselves from the idea of carbon payments for reduced deforestation, ie Reduction of Emissions from Deforestation and Forest Degradation (REDD). Hardline activists reject the broader concept of wealthier countries offsetting their carbon emissions through activities in less developed countries. Concerns about the distribution of benefits — whether they reach community members or get siphoned off by intermediaries — further complicate the discussion. Many are also critical of the technical aspects of additionality and the real-world impact of such projects, which have been severely criticized in recent publications resulting in significant restructuring of reduced deforestation protocols currently underway.
For those of us who regard tropical rainforests as sacred and value nature’s “sanctity” — as Jonathan Haidt put it in his 2012 book The Righteous Mind — paying someone not to harm the Earth feels morally wrong, like holding the planet hostage, and seems unsustainable in the long run. There is also something inherently uncomfortable about paying someone to do “nothing” — to not cut down their rainforest. As the saying goes, “If you want something, you’ve got to earn it.”
However, my on-the-ground experience in eastern Panama and Darién has shifted my perspective. I now believe that financial incentives are critical to protecting our remaining rainforests, particularly on privately held lands.
Currently, converting forests to pasture is seen by my neighbors as an investment with tangible returns: possessory rights, which require landholders to demonstrate that they are using the land productively, often translating into slash-and-burn agriculture and livestock farming, income from cattle sales and access to bank loans. Meanwhile, the ecosystem services provided by rainforests — such as air and water purification, climate stabilization, and biodiversity — benefit the global community but offer them little direct reward.
Conservation payments, whether through national or voluntary carbon and biodiversity payment mechanisms, are not about rewarding inaction but about bridging this value gap. In this sense, paying landowners for an independently growing rainforest they own, protect, and monitor is not conceptually different from dividends paid by companies to shareholders who simply own stocks. By compensating landholders for the services their forests provide, we recognize their true value and offer a pragmatic response to deforestation, biodiversity loss, and climate change. Additionally, instead of considering payments for not cutting down rainforest as payments for inaction, they can also be framed as dividends from assets that generate a global benefit, in exchange for the protection and monitoring of those assets.
See related: New research reveals successes and challenges of a forest conservation payment program in Panama
In the absence of national mechanisms or voluntary carbon markets that incentivize the protection of tropical forests in eastern Panama and Darién, various NGOs, including ADOPTA BOSQUE and the Mamoní Valley Preserve, have taken the initiative by acquiring secondary forests for conservation purposes. Moreover, both are part of the Private Natural Preservers Network of Panama, which has been in conversation with the Ministry of the Environment about recognizing them as Other Effective Area-Based Conservation Measures, a development that could open the door for future financing.
For our part, my new community-based environmental organization, Amigos del Bosque OBC, is working to raise funds to support direct payments to local neighbors who, without such alternatives, might resort to clearing their forests. Through site visits and the use of satellite technology, we actively monitor forest regeneration and its positive impact on the ecosystem.
While collaborating closely with neighboring families, we are also seeking ways to scale these payment systems through carbon markets, biodiversity credits, or other emerging opportunities. In this effort, we join large international nonprofit organizations that have spent over a decade exploring the implementation of carbon and biodiversity credits, particularly for the conservation of native forests in Indigenous territories in central and eastern Panama. Although these efforts have faced numerous challenges without conclusive results so far, we remain committed to finding effective solutions to protect our tropical forests.
We hope that in the near future, Panama will be able to financially compensate Indigenous authorities, campesinos, Rural Aqueduct Management Boards, private reserves, and other actors who, far from doing nothing, actively protect the green spaces that are part of our country’s identity as a biological corridor and a bridge between the Americas.
Their work not only maintains our carbon neutrality but also significantly contributes to global biodiversity and the fight against climate change by conserving key ecosystems that benefit all of humanity.
Jessica Ausinheiler is a former Fulbright Scholar and IIE Centennial Fellow, and readers can learn more about how to get involved with Amigos del Bosque OBC here.
Related audio from Mongabay’s podcast: Three experts debate a new forest finance fund known as the Tropical Forest Forever Facility that would reward 70 tropical nations financially for keeping their forests standing, listen here:
See related coverage from Mongabay’s “Conservation Effectiveness” series:
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