Creating Markets For Ecosystem Services

Ecosystem services are the functions performed by ecosystems that lead to desirable environmental outcomes, such as air and water purification, drought and flood mitigation, and climate stabilisation. Markets rarely exist for them. This study examines how newly defined property rights have been used to create markets in Australia and the United States. The Commission found that creating these markets - such as tradeable credits for carbon sequestration - can be an effective way for governments to achieve their environmental goals.

The Creation of Markets for Ecosystem Services in the United States is a detailed analysis of the most advanced efforts to create markets for ecosystem services in the United States. With the help of in-depth case studies of three well-known attempts to create such markets––in the Chesapeake Bay watershed, the Ohio River basin and the Willamette River basin––the book explains why very few of these markets have actually succeeded even after close to two decades of much scholarly enthusiasm, significant federal funding and concerted efforts by NGOs, government agencies and private businesses. Based on interviews, policy analysis and participatory observation, three features of markets for ecosystem services emerge as particularly problematic. First, the logic of displacement or the idea that particular elements of an ecosystem can be separated and traded across landscapes or watersheds runs counter to political interests, environmental beliefs and people's connections to specific places. The second problem is that of measurement. Quantification methods embed a range of often contentious assumptions and decisions about what counts when restoring ecosystems. The third problem is related to participation in environmental decision-making.

The Law and Policy of Ecosystem Services is the first comprehensive exploration of the status and future of natural capital and ecosystem services in American law and policy. The book develops a framework for thinking about ecosystem services across their ecologic, geographic, economic, social, and legal dimensions and evaluates the prospects of crafting a legal infrastructure that can help build an ecosystem service economy that is as robust as existing economies for manufactured goods, natural resource commodities, and human-provided services. The book examines the geographic, ecological, and economic context of ecosystem services and provides a baseline of the current status of ecosystem services in law and society. It identifies shortcomings of current law and policy and the critical areas for improvement and forges an approach for the design of new law and policy for ecosystem services. Included are a series of nine empirical case studies that explore the problems caused by society’s failure to properly value natural capital. Among the case study topics considered are water issues, The Conservation Reserve Program, the National Conservation Buffer Initiative, the agricultural policy of the European Union, wetland mitigation, and pollution trading. The Law and Policy of Ecosystem Services is a groundbreaking look at the question of whether and how law and policy can shape a sustainable system of ecosystem service management. It is an accessible and informative work for faculty, students, and policy makers concerned with ecology, economics, geography, political science, environmental studies, law, and related fields.

One of the aims of the CoLUPSIA project is to explore options for establishing payments for ecosystem services (PES) within the two districts where the project is working: Seram and Kapuas Hulu. These guidelines were prepared to support the CoLUPSIA team in completing this assessment and have since been revised to incorporate some findings from the field assessments.

The degradation of ecosystems, including forests, and the associated loss of biodiversity, particularly due to human-induced threats and climate change, has gained increased attention from scientists and policymakers. The Millennium Ecosystem Assessment presented a new conceptual framework that puts ecosystem services at the centre and links human well-being to the impacts on ecosystems of changes in natural resources. The Economics of Ecosystems and Biodiversity initiative drew further attention to the economic benefits of conserving ecosystems and biodiversity, supporting the idea that economic instruments – if appropriately applied, developed and interpreted – can inform policy- and decision-making processes. Only a few ecosystem services, however, have explicit market value and are traded in open markets: many – especially those categorized as having “passive-use” value – remain invisible and are rarely accounted for in traditional economic systems. The failure to appropriately consider the full economic value of ecosystem services in decision making enables the continued degradation and loss of ecosystems and biodiversity. Most ecosystem services are considered public goods and tend to be overexploited by society. Many methods have been applied to the economic valuation of ecosystem services. The use of these methods, as well as the interpretation of their results, requires familiarity with the ecological, political, normative and socio-economic context and the science of economics. Recognizing, demonstrating and capturing the value of ecosystem services can play an important role in setting policy directions for ecosystem management and conservation and thus in increasing the provision of ecosystem services and their contributions to human well-being. The aim of this manual is to enhance understanding of ecosystem services and their valuation. The specific target group comprises governmental officers in planning units and field-level officers and practitioners in key government departments in Bangladesh responsible for project development, including the Ministry of Environment and Forests and its agencies. Most of the examples and case studies presented herein, therefore, are tailored to the Bangladesh context, but the general concepts, approaches and methods can be applied to a broad spectrum of situations. This manual focuses on valuing forest-related ecosystem services, including those provided by trees outside forests. It is expected to improve valuation efforts and help ensure the better use of such values in policymaking and decision making. Among other things, the manual explores the basics of financial mathematics (e.g. the time value of money; discounting; cost–benefit analysis; and profitability and risk indicators); the main methods of economic valuation; examples of the valuation of selected ecosystem services; and inputs for considering values in decision making.

Governments and the business sector are increasingly recognising the potential of biodiversity products and services; markets which can help to promote the sustainable use and conservation of biodiversity. Some are already being profitably marketed, but private markets also need to be supported by appropriate public policies. This publication provides a conceptual framework to help identify and promote the use of markets in the biodiversity policy arena, and draws on the findings of a joint OECD/World Bank workshop held in Paris in January 2001. It discusses the concept of 'public goods' and considers four examples of emerging markets: organic agriculture; sustainable forestry; non-timber forest products, such as natural cosmetics and herbal medicines; and genetic resources.

Practical ideas provided by a case study of the Panama Canal Watershed Exciting opportunities await the use of market mechanisms for protecting forest ecosystems. However, questions remain on how to best apply these mechanisms. Emerging Markets for Ecosystem Services: A Case Study of the Panama Canal Watershed provides an integrated, interdisciplinary methodological approach for evaluating market opportunities for watershed services, carbon sequestration, and biodiversity protection. Using the Panama Canal Watershed as a case study example, this probing resource addresses the main questions often asked about the various practical aspects of the emerging markets for ecosystem services, including quantifying value, payment structure, and equitable distribution of benefits. Environmental issues are often at odds with economic and business concerns. Emerging Markets for Ecosystem Services examines practical strategies to integrate diverse aspects into coherent strategies that benefit all. A scientific overview of the science and current knowledge provides a solid foundation to build policy and positive direction using the Panama Canal Watershed as an example. This unique resource sheds useful light on the challenges and provides insightful recommendations for areas struggling with ecosystem issues and the application of market mechanisms. This text is extensively referenced and includes several tables to clearly illustrate data. Topics in Emerging Markets for Ecosystem Services include: an overview of carbon sequestration in natural forests, exotic plantations, native plantations, and agroforestry systems policy tools to help reduce barriers to selling carbon credits alternatives for increasing demand for land-use-based carbon sequestration actions to encourage land managers to protect water quantity and quality receiving full value of watershed protection approaches to bioprospecti