Assessing ecosystem service outcomes from payments for hydrological services programs in Veracruz, Mexico: Future deforestation threats and spatial targeting

Payments for hydrologic services (PHS) programs focus on protecting upstream forests that provide a range of ecosystem services. The goal of this work is to inform the design of PHS policies by modeling ecosystem services outcomes in watersheds in Veracruz, Mexico. An integrated, spatially explicit model for evaluating the performance of the existing PHS program is developed by combining results of field measurements of ecosystem services associated with forested and converted land covers with a land change model that simulates land cover patterns in response to PHS program coverage and targeting strategies. The results indicate that the current PHS targeting strategy performs slightly better than a proposed benefit targeting strategy based on prioritizing areas with highest groundwater recharge potential. We also find that targeting based on deforestation risk results in unintended consequences because land cover classes with poorer ecosystem service values are selected. The latter results suggest that differentiating between forest cover age classes is important since forests in our study area exhibit substantial differences in ecosystem service indicators and in the land cover transition rates across age classes. Overall, our findings caution against the assumption that implementing detailed spatial benefit targeting strategies will necessarily increase the additionality of ecosystem services in conservation programs.