Stochastic economic analysis of investment projects in forest restoration involving containerized tree seedlings in brazil

Abstract

Background: Experts in ecological restoration have discussed the cost reduction to make forest restoration financially feasible. This is very important in developing countries, such as Brazil, and for smallholder farmers; however, economic studies do not usually consider the uncertainties in their analysis. Therefore, this study aimed to analyze, under conditions of uncertainty, how tropical tree seedlings produced in polyethylene bags, polyethylene tubes, and biodegradable containers (Ellepot®) interfere with the costs of implementation and post-planting maintenance investment projects in a deforested tropical seasonal forest area in southern Brazil. Methods: We evaluated total costs, production costs, and equivalent annual uniform costs, and the probability distributions and estimated ranges of stochastic values were adjusted through Monte Carlo method simulation. Furthermore, the seedling survival rate was recorded over 12 months post-planting. Results: The costs with tree seedling acquisition and direct labor were the components that most impacted total costs in the three investment projects. The forest restoration investment project with tree seedlings produced in polyethylene bags was economically unfeasible in relation to other projects. Conclusions: The best economic alternative was observed in the investment project with tree seedlings produced in Ellepot®, which showed a survival rate >80% after one year and the lowest total cost, production cost, and equivalent uniform annual cost.