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As European mountain forests are a significant world carbon stock and sequester, they have a prominent position in climate policies and climate smart forestry (CSF) implementation. However, forest ecosystem services (ES) that are public or common goods (i.e., of carbon sequestration) face a traditional social dilemma of individual versus collective interests, which often generate conflicts, and result in the overuse of ES and resource depletion. In this article, we elaborate a conceptual analytical framework and use it in case studies selected in European mountain areas to analyse the potential of socio‐ecological systems to develop CSF. Collective self‐organized forestry regimes, as a form of social innovation, are the main focus, compared with centrally governed state regimes and forest management practices in municipal forests. A conceptual framework to analyse collective self‐organized regimes and compare these with other CSF‐applicable forestry regimes is elaborated using a mixed‐method approach, centered around the estimation of carbon sequestration potential. The results indicate that collective self‐organized forestry regimes can play a role in fostering the transition of European forestry towards CSF. [ABSTRACT FROM AUTHOR]

Climate-smart forestry (CSF) is considered a promising approach for climate change adaptation and mitigation strategies, as highlighted in several European policy documents. This paper describes a prospective approach to introducing an incentive-based scheme to facilitate the implementation of CSF through a case study in Iceland. It is argued that the payments for ecosystem services (PES) scheme allows for effective CSF management and long-term sustainability if introduced in compliance with local, cultural, and social values. In a case study of an Icelandic afforestation programme, we conducted an institutional analysis of the PES scheme and assessed its effect on the sustainable provision of forest ecosystem services for the long term. We provide preliminary findings on the application of CSF in the 30-year-old Icelandic afforestation programme scheme. The perspectives of forest and policy experts, as well as local farmers participating in the scheme, were crucial for assessing the effectiveness of PES scheme performance in Iceland. [ABSTRACT FROM AUTHOR]