Quantifying ecosystem services and analyzing trade-offs under a rapid land cover change: the case of Northwestern Ethiopian Highlands

• Strengthen community forest protection and expand buffer zones and restoration programs. • Apply watershed-specific strategies using spatial ecosystem service assessments. • Integrate ecosystem service values into land-use planning and incentivize multifunctional landscapes. • Conduct further research to optimize ecosystem service trade-offs for sustainable ecosystem and livelihoods. Rapid land use/land cover (LULC) change in the Northwestern Ethiopian Highlands is intensifying pressures on ecosystem services. However, empirical evidence on the magnitude and nature of trade-offs among these services remains limited. This study aimed at quantifying and valuing ecosystem services and their trade-offs associated with high-intensity LULC change between 2010 and 2020, to provide insights for sustainable land management. We applied the Integrated Valuation of Ecosystem Services and Trade-offs (InVEST) model to assess carbon storage, sediment retention, seasonal water yield, crop yield, and plantation revenue. Rigorous data processing steps such as watershed delineation, image preprocessing, land use classification, accuracy validation and trade-offs analysis were undertaken. Changes in ecosystem services were valued in terms of net present values to facilitate comparison across services and among watersheds by using a common unit of account −USD. LULC change was dominated by a 297% expansion of plantation forests, accompanied by an increase in carbon stock (39.57 to 45.93 t ha −1 ). In contrast, sediment retention declined from 68.32 to 48.63 t ha −1 yr −1 , and seasonal water yield decreased by 9.8%. Meanwhile, annual gross-margin from crop yields rose by 39.7%, and plantation income more than tripled. The net present value of ecosystem service changes included USD 4.27 million from carbon storage, USD 27.92 million from avoided dredging costs, and USD 78.99 million from crop production. Trade-offs were observed between crop yield and regulating services, while synergies occurred between plantation income and carbon sequestration. High-intensity LULC change improves provisioning services at the expense of regulating services. However, balanced land allocation, as observed in Timble watershed, can reduce trade-offs and even create synergies among services. The findings offer actionable evidence for policymakers and land managers to design strategies that balance agricultural production with long-term ecosystem sustainability.