This document analyzes the viability of payments for ecosystem services (PES) schemes to incentivize sustainable forest management among small private forest owners in Uganda. It finds that the compensation levels from the analyzed PES project, estimated opportunity costs, and carbon market prices are all too low to sufficiently motivate landowner participation. For PES to work for small forest owners, it suggests using group contracts to reduce operating costs and adopting more holistic strategies beyond PES alone that diversify livelihoods and integrate with broader government programs.
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