Water-related ecosystem services, such as infiltration, streamflow regulation, and water quali-ty, are central to the wellbeing of forest-dependent Himalayan communities but are increas-ingly threatened by forest degradation, Lantana camara invasion, and rising fire risk. Con-ventional Payments for Ecosystem Services (PES) and carbon-focused afforestation schemes rarely capture these hydrological co-benefits or the strategic trade-offs communities face un-der ecological uncertainty. This study develops a hydrology-integrated, blockchain-enabled bioeconomic model that links forest growth, water-service valuation, lantana dynamics, and fire risk to a performance-indexed token pricing system. Token values adjust in real time to ecological indicators such as carbon buffer size, water-service gains, cumulative harvesting, invasive-species pressure, and fire hazard, with smart contracts converting these indicators into payments. Results show that blockchain-based pricing creates strategic incentives not present in traditional PES. Communities face a trade-off between early credit sales for imme-diate income and retaining larger carbon buffers that strengthen water services and future to-ken values. When post-fire income is absent, high fire risk encourages precautionary liquida-tion. However, when post-fire income streams such as water PES and fuelwood are available, this effect is moderated, and higher risk can instead reduce token prices and dampen sales. Strong hydrological benefits and rising token-price trends promote long-term accumulation. Lantana removal competes across oak and pine stands, revealing tensions among hydrologi-cal gains, fire reduction, and restoration costs. Policy experiments indicate that subsidies and higher water-PES payments shift outcomes toward greater restoration and improved water-shed resilience. Under explicit fire risk, blockchain-based crediting enables communities to partially transfer wildfire-related financial risk to external buyers by monetizing uncertain future carbon benefits, thereby supporting higher conservation effort than would be possible under traditional PES.
Ram Ranjan (Fri,) studied this question.