Encouraging and Advancing the Reconversion of Rubber Plantations: Developing Incentives Using a Combined Market and Government Payment System

In various regions in Southeast Asia, over the past decades, natural tropical forests have rapidly been converted into monoculture plantations of rubber (Hevea brasiliensis), a consequence of the rubber boom. With the goal of slowing the ecologically and environmentally detrimental conversion of forests to rubber plantations and to encourage the reconversion of rubber plantations back to close-to-nature rainforests, we developed a theoretical combined market and government payment system. To evaluate the potential impacts of such system, we carried out a simulation study plus sensitivity analyses, using the latest land-use data from Xishuangbanna, Southwest China. The results of this simulation suggest that the payment system may make the annual reconversion rate develop from 9,009 ha to 4,610 ha over the modeled period from 2021 to 2050, so that the total reconversion area by 2050 would sum up to 197,902 ha. The total net present value (NPV) of compensatory payments for the whole period, in this case, would sum up to US$3.19 billion. The total carbon sequestration benefit resulting from the replacement of rubber plantations would be 11.37 million tons of carbon (tC) over the modelled period, translating into a cost of US$280.44 per tC. Sensitivity analyses revealed that higher variations in rubber prices cause more difficulty in determining compensatory payment. Of course, changes in a number of factors may lead to a reduction of the total NPV of compensatory payments, including increases in the carbon price or traditional medicine price, increases in the discount rate, and decreases to the rubber price and the targeted final reconversion rate. The area-specific compensatory payments ($11,154–$16,106/ha) and area-specific carbon sequestration (46.39–57.45 tC/ha) would then increase linearly as the targeted final reconversion rate increases. This new integrated payment system has the potential to contribute to restoring rainforest in rubber monoculture-dominated landscape.