Estimating the carbon impacts of leakage from forest restoration and the costs of reducing them

Abstract Ecosystem restoration is a key nature-based climate solution but risks displacing economic activities and triggering leakage – whereby forgone production drives habitat loss elsewhere, eroding benefits. Focusing on reforestation opportunities Brazilian ranchland we characterized leakage risk as the ratio of forgone beef production to carbon gained. Assuming 100% of forgone production results in extensification we asked: what is the impact of unaddressed leakage; how much can leakage be reduced by prioritizing restoration in low-yielding, high-carbon areas; and can it be cost-effectively mitigated by targeted intensification? Taking likely leakage into account but not tackling it increased median costs of restoration (over ignoring it entirely) by 43-100%, to median values of 33 and 24 USD tCO₂e⁻¹ in the Atlantic Forest and Amazon, respectively. Prioritizing low-leakage sites reduced these costs by 21–37%; combining this with targeted intensification cut net carbon costs further, to 67% of unmitigated levels. Our broad findings hold at 30% (cf 100%) extensification and in other sensitivity analyses, and reveal leakage can substantially increase carbon costs, but that careful siting and targeted intensification can provide extremely cost-effective mitigation.