Ecosystem Services Payments: Opportunities and Challenges

A new report written by Defenders of Wildlife in conjunction with the U.S. Forest Service Pacific Northwest Research Station discusses the opportunities and challenges related to ecosystem service payments.  One of the most challenging issues in environmental policy today is how to create incentives for private landowners to participate in conservation efforts that protect biodiversity and prevent forest and farm lands from being lost to development. No single regulation, government incentive, tax program, or other tool operates at the scale that is necessary to accomplish this goal. To improve how we approach biodiversity conservation, market-based payments for ecosystem services could be used in conjunction with other policies to create better incentives.

Ecosystem services are the benefits human communities enjoy as a result of natural processes and biological diversity. Some of these services are already recognized and sold into established markets. Timber, food, fuel and fiber are all examples of services with recognized economic value. Yet there are other services produced from healthy, functioning landscapes that are not well recognized in current payment structures, providing little or no incentive for landowners to maintain them. These services include sequestering or storing carbon in trees and soil, providing fish and wildlife habitat, filtering water, and reducing damages from natural disasters. In addition, most programs pay landowners to protect or restore a specific service rather than the suite of services produced from well-functioning ecosystems. Various incentive programs need to be better integrated or new programs need to be developed that recognize the value of ecosystem protection.

Bundling and stacking payments for ecosystem services offers a promising option to improve landowner compensation while also delivering better ecological outcomes. Rather than being compelled to focus on one particular attribute or a discrete portion of regulated services as current programs and markets do, landowners should be able to benefit from the multiple services, both regulated and voluntary, their land is producing on a broader, landscape scale. To be both ecologically and economically effective, payments, at a minimum, need to address multiple values, function at the landscape scale, and minimize transactions costs.

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Gina L. LaRocco is a Conservation Program Associate at Defenders of Wildlife’s Northwest office. Gina is working to develop market-based conservation incentives, with an eye toward improving the ecological and economic benefits of mitigation programs.

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dotWild is the blog of scientists and policy experts at Defenders of Wildlife, a national, nonprofit membership organization dedicated to the protection of all native animals and plants in their natural communities.

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