First Payment for Environmental Services Scheme in Cuba: Promoting carbon removal through sustainable forest management

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by Guilherme De Franco, United Nations Development Programme (UNDP)

Forest in Cuba.

UNDP Cuba

Cuba's geological evolution, climate, and insular geography led to highly diverse ecosystems with various endemic species. Nonetheless, declining forest cover and climate change hazards have threatened the country's rich biodiversity. Moreover, CO2 emissions accelerate the impacts of climate change on ecosystems, in addition to harming human well-being.

To address these challenges, the Cuban government, with support from the Biodiversity Finance Initiative (BIOFIN) of the United Nations Development Programme (UNDP) and the Ecovalor project, established a payment for environmental services scheme that rewards carbon removal through sustainable forest management.

By March 2025, the scheme disbursed USD 238,000 (CUP 5,709,066) in payment for environmental services, associated with the removal of 999,473 tons of carbon across 12,646 hectares of forest. This initiative contributes to climate mitigation, ecosystem conservation, and the responsible use of natural resources in Cuba.

Last update: 04 Dec 2025

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Context

Challenges addressed

Land and Forest degradation

Loss of Biodiversity

Ecosystem loss

Pollution (incl. eutrophication and litter)

Cuba's ecosystems, with rich fauna and flora, provide many services that support human well-being and economic development, including access to natural resources, carbon storage, and the recreational use of forests. However, diminishing forest cover, soil erosion, and climate change hazards have driven biodiversity loss in the country, according to Cuba's National Environmental Strategy 2021-2025.

CO2 and other greenhouse gas emissions contribute to climate change and, as a result, further accelerate biodiversity loss in the country. These emissions also increase pollution and reduce air quality, thereby harming human health.

Given this situation, initiatives that link carbon removal with sustainable forest management offer an opportunity to deliver integrated benefits for both biodiversity and climate, such as halting ecosystem loss, advancing climate mitigation, and reducing pollution levels.

Scale of implementation

Local

Ecosystems

Agroforestry

Tropical deciduous forest

Tropical evergreen forest

Coastal forest

Theme

Biodiversity mainstreaming

Mitigation

Ecosystem services

Sustainable financing

Legal & policy frameworks

Forest Management

Standards/ certification

Location

Pinar del Río, Cuba

Matanzas, Cuba

Villa Clara, Cuba

Las Tunas, Cuba

Holguín, Cuba

Caribbean

Process

Summary of the process

The development of a payment for environmental services scheme for forest carbon removal in Cuba began with interministerial dialogues, adopting a cross-sectorial approach and leveraging on the expertise, capabilities, and perspectives of different ministries. During the planning process, it was defined that individuals and legal entities managing forest assets and interested in receiving payments under the scheme must first obtain a certification verifying carbon removal. Cuba's Agroforestry Research Institute was designated as the authority responsible for developing the certification methodology and issuing accreditations, an indispensable stage in the process to qualify for payments.

Building Blocks

Dialogue among different stakeholders to develop the first payment for environmental services scheme in Cuba

The development of a payment for environmental services scheme is inherently cross-sectoral, since it encompasses environmental, fiscal, planning, and regulatory matters. BIOFIN and the Ecovalor project facilitated interministerial dialogues in Cuba starting in 2020, involving directors from the Ministries of Agriculture; Finance and Prices; Economy and Planning; and Science, Technology, and Environment.

These interministerial meetings facilitated effective discussions and the joint design of the payment for environmental services scheme. For instance, it was defined that the National Forestry Development Fund (FONADEF) would allocate resources for payments, and that certification of forest carbon removal would be a mandatory prerequisite to access the scheme. Additionally, the interministerial dialogues provided a space to advance the necessary regulations for the scheme, for which the Ministry of Agriculture was crucial.

This collaborative process resulted in the effective design of the payment for environmental services scheme and its approval through Regulation 28/2024 from the Ministry of Agriculture.

Enabling factors

Government's willingness to develop the payment for environmental services scheme, with interested parties across different ministries.

Lesson learned

The establishment of coordination mechanisms, including interministerial and key stakeholder dialogues, constitutes a key component of this initiative. They provide a space to address the interests and concerns of all relevant parties, share knowledge among different actors, and assign responsibilities based on the mandate and legal capacities of each ministry. The establishment of a Resolution supporting these mechanisms and the existence of a certifying entity have proven vital, as well as the monitoring of results in the areas where the mechanism has been implemented, in order to assess its scaling-up potential.

Development of a certification methodology for forest carbon removal

Under a payment for environmental services scheme, it is crucial to ensure that only individuals who contributed to the outcome associated with the mechanism — in Cuba's case, forest carbon removal — receive payments. This guarantees that the scheme effectively encourages a shift towards nature-positive practices and that financial resources are used wisely.

To this end, individuals or organizations seeking to receive payment for environmental services in Cuba must first obtain a certification confirming forest carbon removal in their forest assets. Following Regulation 28/2024, carbon removal is the accumulation or retention of carbon in the biomass of living trees.

The Agroforestry Research Institute of the Ministry of Agriculture is responsible for issuing these certifications. This process employs the Environmental Externalities Accounting (Ex-ACT) tool, from the Food and Agriculture Organization (FAO), and the SUMFOR methodology, created by the Agroforestry Research Institute.

The SUMFOR methodology enables the calculation of carbon retention over a 10-year period from the baseline year and contributes to determining the role of forest ecosystems in providing environmental services. Its development delved into aspects related to the validation and evaluation of indicators for sustainable forest management.

Enabling factors

Technical expertise within the Agroforestry Research Institute for the development of the methodology and issuance of certifications.
Good reputation and trust in the work of the Agroforestry Research Institute.
Approval of a resolution by the Ministry of Agriculture for the establishment of the payment for environmental services scheme.

Lesson learned

It is essential to associate payment for environmental services schemes with verifiable nature-positive outcomes, ensuring that financial resources truly promote sustainable practices.
Certification can serve as an effective tool to ensure applicants meet the requirements to receive payments for environmental services.

The instrument: Cuba's payment for environmental services scheme

Cuba's payment for environmental services scheme rewards carbon removal through sustainable forest management. Individuals and legal organizations managing forest assets are eligible to apply. Compensation is calculated based on tons of CO2 removed rather than forest area under management. This science-based approach precisely links payments with mitigation achievements, since different forest types have varying CO2 removal potential, even when covering the same number of hectares.

Individuals and legal entities interested in receiving payments must apply through the Municipal State Forestry Service, submitting up-to-date legal documents that demonstrate the legitimacy of their tenure over forest assets. Then, applicants must calculate the amount of carbon removed, for which they can hire accredited, specialized technical services. Following this, they must submit the calculation results to the Agroforestry Research Institute, which will review the calculations and issue the forest carbon removal certification. Finally, applicants receive payments.

Different payment rates were established with the objective of recognizing varying carbon removal potential:

Natural producing forests: USD 0.29 (7.00 CUP)/ ton of CO2.
Natural conservation forests: USD 0.20 (5.00 CUP)/ ton of CO2.
Artificial forests: USD 0.13 (3.00 CUP)/ ton of CO2.

Enabling factors

Availability of resources from the National Forestry Development Fund (FONADEF) for the provision of payments.
Awareness of and interest in the scheme among individuals and legal entities.

Lesson learned

Payment for environmental services schemes are valuable mechanisms for encouraging individuals and legal entities to adopt and/or maintain sustainable practices, by compensating for lost economic opportunities and financially rewarding this transition.
The outcome from the pilot implementation of the payment for environmental services scheme in Cuba was positive and there is interest in scaling up this mechanism. To this end, the scheme was included among the new resource destinations of the Forest Development Fund, and Cuba's forestry legislation is currently being updated. The Ministry of Agriculture and the Ministry of Finance and Prices are also evaluating additional necessary conditions for scaling up this scheme.

Impacts

As of March 2025, USD 238,000 (CUP 5,709,066) was disbursed under Cuba's payment for environmental services scheme, rewarding the removal of 999,473 tons of carbon from the atmosphere across 12,646 hectares of forest.

This achievement contributes to climate mitigation, the restoration and maintenance of ecosystem services, the protection of forest heritage, the responsible use of natural resources, and the improvement of forest workers' income and well-being.