Introduction
Forest provides a range of ecosystem services on which the survival of humans depends (
Spehn et al. 2010), including wood used for human livelihoods, air to breathe, watershed protection, prevention of soil erosion, and climate change mitigation.
Sustainable forest management (SFM) approaches have been guided by the goals of the United Nations 2030 Agenda for Sustainable Development (
United Nations 2015a) and the Paris Agreement (
United Nations 2015b), aimed at halting forest degradation and increasing carbon sinks in forests. The Intergovernmental Panel on Climate Change (IPCC) places great emphasis on forests as being crucial for mitigating the impacts of climate change (
IPCC 2014). The new European Union (EU) forest strategy of the European Green Deal (
European Commission 2019) embraces the implementation of SFM, which ensures a balance between the provision of multiple forest ecosystem services (FES) with growing demand for raw materials. Consistency is crucial between strategies and policies at multiple levels, as well as cross-sectoral cooperation on climate change in forestry, land-use, and other key sectors. Furthermore, the streamlining of national policies and implementation of incentives (
Luckert and Williamson 2005;
Williamson and Nelson 2017;
Kauppi et al. 2018) at local levels is essential to scale down global climate change objectives, to secure the efficiency of SFM, and to increase the provision of FES and the well-being of local people (
Rowcroft et al. 2011;
Härtl et al. 2016).
However, climate-smart forestry (CSF) is still falling short in achieving SFM and fulfilling climate change adaptation and mitigation strategies (
Verkerk et al. 2020). To meet global afforestation goals (
United Nations 2019) and to increase the adaptive capacity of local systems, policymakers must confront weak governance, recognize the role of the rural economy, and develop flexible incentives as well as clear regulations to interest local communities (
Jones et al. 2010).
Payment for ecosystem services (PES) has been recognized as an important policy incentive that seeks to promote the sustainable provision of FES, as well as a more efficient use of available finances in existing biodiversity programmes (
Karousakis 2012). The role of PES schemes has also been promoted in the European Green Deal (
European Commission 2019) and the new EU Biodiversity Strategy to 2030 (
European Commission 2020) as an approach based on a theoretically simple proposition: pay individuals or communities to undertake actions that increase the levels of desired ecosystem services (
Jack et al. 2008). To date, evidence of PES schemes implemented to support the sustainable provision of climate-related services in European forestry is uncommon (weak), and different PES schemes are subjected to preliminary considerations (see e.g.,
Brouwer et al. 2015;
Sgroi et al. 2016). Furthermore, scheme designs and detailed payment settings are usually difficult to obtain from actors. Current research about PES and (or) PES-like schemes (
Wunder 2008,
2015) linked to forest ecosystems in European mountains is generally lacking, especially considering CSF.
To tackle the abovementioned issues, this study concerns the conceptual argumentation of using PES schemes for sustainable and climate-smart forestry in Iceland. The intensive afforestation that has been taking place over the last 30 years in Iceland is an interesting example of the development of a novel incentive tool with the voluntary participation of local farmers. This aims to enhance the well-being of local Icelandic people, while meeting global climate change targets by implementing a CSF approach in SFM. A PES governmental scheme has been active since 1990 under the Icelandic afforestation programme
2 that concerns both regulatory and cultural FES. In this scheme, the value of climate services is fostered by cultural ecosystem services that promote pro-environmental behaviour. We argue that PES in combination with CSF can be a vital strategy for sustainable forest management and planning in the long term. CSF strategy can not only contribute to the provisioning of regulating ES but also to other categories of ES such as provisioning, cultural, supporting, and, thus, meet global strategies more efficiently.
Following this introductory section, the paper is structured as follows. First, the reader is acquainted with the theoretical concept of climate smart forestry and payments for ecosystem services. The historical background of the emergence of the Icelandic PES scheme followed by the analytical framework for PES schemes and the perception of CSF and scheme performance are then described in the Methodology section. The Results section presents an institutional analysis of the PES scheme in the first part, and an assessment of PES scheme performance and CSF implementation based on interviews and literature review in the second part. The Discussion section is focused on the findings of this study. Finally, the Concluding remarks summarize crucial key findings from the case study research.
5. Discussion
Based on our research results, it is evident that the afforestation programme as a voluntary incentive base mechanism has a considerable and immediate impact on increasing forest cover and thus increasing multiple FES provision and successful CSF implementation. The enthusiasm and interest of farmers to afforest their farms is quite high, although their trust seems to be waning over time as the financial crisis affects the governmental institutions responsible for setting afforestation programme spending. The effective integration of social elements has recently been recognized as a key component for the successful development of PES schemes (
Hiedanpää and Borgström 2014;
Hiedanpää and Bromley 2012), as well as for the implementation of CSF (
Bowditch et al. 2020). Support for social elements in forest management will increase adaptive capacity, resilience, the well-being of local communities, and subsequently FES provision (
Webster 2013;
Curtin 2014;
Lawrence 2017). In this context, during interviews locals acknowledged that the ability to follow key elements from both the social and forestry perspectives would ensure the PES scheme’s effectiveness, whereas the lack of this balance would threaten its long-term success.
Future opportunities for PES scheme expansion in Iceland is to convince non-participating farmers and those owning environmentally suitable land to join the scheme. Forest and policy experts are concerned about maintaining long-term interest in afforestation programme participation. The scheme’s future depends on gaining experience in afforestation, filling knowledge gaps with research focused on the relationship between afforestation and FES provision, stable financial support, and job opportunities in forestry and the timber market.
Our assessment of Icelandic PES scheme performance within CSF implementation demonstrates that their combination and mutual complementing has the potential to build an effective and vital strategy for SFM. To achieve FES provision and land use planning in the long-term, it is necessary to bridge the gap between policy and practice with the effective engagement of forest professionals and the forest farmers’ community. Trust building and the durability of local institutions are also key elements to achieve such a strategy.
Conclusion
This case study provides clear evidence that the 30-year afforestation programme in Iceland significantly contributes to FES provision and the well-being of local farmers, while strongly supporting global climate change goals. The role and interest of forest farmers involved in the programme — who highly value the culture and the environment of Iceland and have legitimate and trustworthy relations within the scheme community — is recognized as crucial for sustainable FES provision and long-term PES scheme success.
Communication, trust, and supportive collaboration are advancing the implementation of CSF processes. This paper evidences the potential implementation of CSF in Europe. Further research would benefit from linking indicators for managing comprehensive resilience with an emphasis on the adaptive capabilities of communities.