As global attention increasingly turns toward nature-based solutions for tackling climate change and poverty, large-scale tree planting initiatives like the Philippines’ National Greening Program (NGP) offer a powerful example of what is possible. The United Nations’ Sustainable Development Goals call for aligning ecosystem services with development objectives, and the NGP stands as a model for achieving these twin goals. Tree planting programs offer the potential to not only sequester carbon, but also create jobs and transfer productive forestry assets to receiving individuals or communities.
In my job market paper (with Lorenzo Sileci), we study whether tree planting could indeed serve as a poverty alleviation tool and further induce structural transformation. To do this, we link NGP tree planting projects with granular development indicators, including official small area poverty estimates and a novel measure of extreme poverty based on the proportion of unlit settlements. Our findings suggest that tree planting can play a significant role in reducing poverty and generating economic benefits, while also delivering environmental gains.
The National Greening Program: A policy for climate and poverty
The NGP was launched in 2011 with an initial budget of over $700 million, making it one of the largest tree planting programs in the world. The program is primarily a reforestation initiative aimed at planting 1.5 billion trees across 1.5 million hectares.
However, the program was designed to do much more than just plant trees. Under the NGP, local organizations are paid to produce seedlings, prepare and plant trees, and maintain the plantation for three years. After this period, these organizations assume full managerial control of the plantation assets, retaining all the generated proceeds. This model not only ensured economic buy-in but also enabled long-term poverty alleviation. From 2011 to 2016, the NGP implemented over 80,000 projects, planting hundreds of thousands of hectares, creating jobs, and empowering local communities.
Key findings: Positive socioeconomic impacts
To assess the impact of the NGP on socioeconomic outcomes, we used a dynamic difference-in-differences (DID) strategy, comparing treated municipalities with control municipalities that had not yet been treated or were never treated by the NGP. Figure 1 demonstrates the roll-out of the program and the percentage of municipalities that were treated in each year. Our analysis focuses on several key outcomes: poverty reduction, economic spillovers, and environmental gains.
Figure 1: NGP timing of treatment
Figure 2 presents this paper’s main results and shows that municipalities that participated in the program experienced a 6 percentage point reduction in poverty (top panel) and an 8 percentage point reduction in the share of unlit settlements (bottom panel). What’s particularly remarkable is that these effects persisted up to seven years after the NGP’s rollout, with no reversal in trend. These results indicate that tree planting programs like the NGP can contribute to both immediate poverty alleviation and long-term economic development.
Figure 2: Impact of the NGP on socio-economic measures
Spillover effects: Local and regional economic benefits
The net impact of a forest policy encompasses effects within the spatial unit boundary, as well as spillover effects outside, referred to as policy-induced leakage effects (Börner et al., 2020). To understand whether the NGP led to economic spillovers into surrounding villages, we use high-resolution village-level data and exploit 32,472 control villages. We compare control villages that have a neighbor who is treated earlier by the NGP to a pool of villages who have ‘not-yet’ had a neighbor treated by the time of the treatment or to control villages that never have a neighbor treated by the NGP. We find that control villages adjacent to NGP-treated areas experienced a 4.5 percentage point reduction in the share of unlit settlements, suggesting that the economic benefits of the program extended beyond the immediate areas of intervention.
Structural transformation: Shifting the economic landscape
Next, we analyze whether the NGP contributed to broader structural shifts in employment. We find that agricultural employment declined by 3.8 percent in treated areas, while employment in unskilled manual labor and the service sector increased by 5.6 percent and 2.6 percent, respectively. This indicates that the NGP helped transition workers out of agricultural jobs and into higher-productivity sectors. Additionally, we find no evidence that these changes were driven by shifts in labor supply or population migration. Taken together this suggests that the program generated economic activity rather than economic activity being spurred on by changes in the labor supply or inducing migration. Furthermore, these findings point to the potential of large-scale tree planting programs to drive structural transformation in rural economies.
Environmental gains: More than just carbon
Beyond the socioeconomic benefits, the NGP also delivered significant environmental gains. We analyze the total amount of carbon dioxide (CO2) sequestered by the program, the cost per ton of CO2 emissions reduced, the break-even points at the plantation level when the financial benefits from carbon sequestration exceed the program's implementation costs, and finally, the overall monetary benefit from the sequestered CO2. Our estimates show that the NGP sequestered between 71.4 and 303 million metric tons of CO2 over ten years. At the lower bound, this is equivalent to the emissions of 17 million gasoline-powered vehicles driven for one year or the CO2 output from 18 coal-fired power plants. For policymakers focused on CO2 reductions, we calculate that the NGP reduces emissions at a cost ranging from $2 to $10 per ton. This is similar to other reforestation program estimates for dollars per ton of CO2 (Jayachandran et al., 2017; Jack, 2013) and is significantly below most available technologies today (Gillingham and Stock, 2018). Additionally, we estimate that the sequestered CO2 is valued between $163 million and $9.57 billion, and at the plantation level, the sequestration benefits exceed the program’s costs between years 6 and 9.
Policy implications: Designing effective multi-objective programs
The NGP’s success offers several key lessons for policymakers in other countries. First, engaging local communities in the planning and implementation of tree planting programs is critical to ensuring both environmental and socioeconomic sustainability. By giving local organizations control over plantation assets, the NGP created strong incentives for long-term maintenance and care.
Second, tree planting programs should not be viewed solely as environmental interventions. The NGP’s success in reducing poverty and creating jobs demonstrates that these programs can be powerful tools for economic development, particularly in rural areas. By aligning environmental and development goals, programs like the NGP can help achieve multiple policy objectives simultaneously.
Finally, the NGP highlights the importance of long-term monitoring and support. Ensuring the survival of planted trees and the continued economic benefits of the program required ongoing oversight from both government agencies, extension officers and local organizations. This focus on sustainability is crucial for maximizing the long-term impact of tree planting initiatives.
Conclusion: Scaling up nature-based solutions
The Philippines’ National Greening Program exemplifies how tree planting can contribute to both climate mitigation and poverty alleviation. By sequestering carbon at a low cost and creating economic opportunities, the NGP demonstrates the potential of nature-based solutions to drive sustainable development.
As countries around the world look to scale up their climate actions in the coming years, programs like the NGP should be considered not only for their environmental benefits but also for their ability to transform rural economies and reduce poverty. Integrating these dual goals into future policies will be essential for addressing the interconnected challenges of climate change and development.
Jeffrey Pagel is a Postdoctoral Fellow in Environmental Economics at the London School of Economics and an Associate at the Grantham Research Institute on Climate Change and the Environment.
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