INTERCEDE · InceNtivising fuTurE foRest eCosystem sErvices anD incomes in Europe

Forests are crucial for climate mitigation, biodiversity protection, water flow regulation, recreational, cultural and health services – and many other forest ecosystem services (FES). Yet, as our key challenge, Europe’s forests at present critically undershoot their potential to deliver FES. Climate change will affect future FES supply. Societal demand for FES will be complex, and highly dynamic. Some FES economic values are ill explored. Facing these challenges, INTERCEDE will help to better match future FES supply and demand from Europe’s forests. First, we will project theory-informed yet evidence-based scenarios for future FES supply and demand. Second, as recognized in the EU Forest Strategy, Market-Based Instruments (MBI) can be key in improving tailored incentives and incomes for forest owners to manage their forest for socially optimal FES provision. MBI can thus help aligning FES supply with multidimensional demand. We will comprehensively map and evaluate Europe’s current MBI landscape, adding new rigorous impact evaluations of Payments for Environmental Services (PES) schemes, while also assessing the EU’s Rural Development Programme (RDP) investments from a PES angle. From this, we will develop effective, adaptable and scalable MBI policies. We can only achieve this by systematically connecting research to policy and practice, creating our multi-actor aligned Transdisciplinary Forum as key interface. Our consortium brings together small and medium-sized enterprises assisting forest owners in FES management practices, organisations representing landowners and environmental interests, and researchers who excel in modelling and valuing FES, in the economics of instrument design, and in governance and policy analysis. The consortium will mid-way in the project set up an Accelerator Service for (new or pre-existing) PES and MBI schemes, piloting new designs and MBI business models to boost the development, outcomes and impacts of targeted interventions.