Scenario-Based Valuation and Payment for Ecosystem Services for Highland Maize-to-Agroforestry Transition in Thailand

Highland maize monoculture in northern Thailand drives severe soil erosion, carbon loss and downstream hydrological damage. This study evaluates whether converting highland maize to perennial agroforestry (coffee, cocoa and bamboo) can reverse these impacts while remaining economically viable for smallholders, and whether payment for ecosystem services (PES) can support the transition. Using biophysical models (RUSLE, SCS-CN, IPCC Tier-1 carbon coefficients) forced by observed and downscaled climate data, a ten-year transition (2024–2033) across 19 provinces was simulated under three scenarios: business as usual, partial (50%) and full (100%) agroforestry conversion. Full conversion substantially reduces soil erosion and surface runoff while more than doubling aboveground carbon stock relative to business as usual, with partial conversion delivering roughly half these gains. Economically, full conversion yields the highest net present value of benefits across all discount rates tested, though smallholders face a temporary income shortfall during the early tree establishment years. We show that PES functions best not as a permanent subsidy but as bridging finance: front-loaded payments from soil and carbon co-benefits offset this transitional gap, with reliance on PES declining as tree crops mature into commercial production. These findings offer a transferable framework for designing PES schemes that de-risk agroforestry transitions in tropical highland landscapes.