Banking on strong rural livelihoods and the sustainable use of natural capital in post-conflict Colombia

In post-conflict Colombia, the government has prioritized resettlement of displaced people through development of strong rural livelihoods and the sustainable use of natural capital. In this paper, we considered government proposals for expanding payment for ecosystem services (PES) and sustainable silvopastoral systems, and private-sector investment in habitat banking. We coupled the Integrated Economic-Environmental Model (IEEM) with spatially explicit land use and land cover change and ecosystem services models to assess the potential impacts of these programs through the lens of wealth and sustainable economic development. This innovative workflow integrates dynamic endogenous feedbacks between natural capital, ecosystem services and the economic system, and can be applied to other country contexts. Results show that PES and habitat banking programs are strong investment propositions (Net Present Value of US$4.4 and $4.9 billion, respectively), but only when moving beyond conventional economic analysis to include non-market ecosystem services. Where a portfolio investment approach is taken and PES is implemented with sustainable silvopastoral systems, investment returns would reach US$7.1 billion. This paper provides a detailed evaluation of the benefits of investing in rural livelihoods and enhancing Colombia’s natural capital base, with empirical evidence to inform the spatial targeting of policies to maximize economic, environmental and social outcomes.