Payments for Ecosystem Services

Abstract

While we don’t tend to think about it, healthy ecosystems provide a variety of critical benefits. Ecosystem goods, the physical items an ecosystem provides, are obvious. Forests provide timber; coastal marshes provide shellfish. While less visible and generally taken for granted, the services underpinning these goods are equally important. Created by the interactions of living organisms with their environment, ecosystem services provide the conditions and processes that sustain human life.1 If you doubt this, consider how to grow an apple without pollination, pest control, or soil fertility. Once one realizes the importance of ecosystem services, three points quickly emerge: (1) landscapes provide a stream of services ranging from water quality and flood control to climate stability—the economic value of which can be significant; (2) the vast majority of these services are public goods and not exchanged in markets, so landowners have little incentive to provide these positive externalities; and (3) we, therefore, need to think creatively about creating markets for these services so they are not under-provided. This is the basis of the policy approach known as Payments for Ecosystem Services (“PES”).

Rediscovering wild food to diversify production across Australia's agricultural landscapes

“…One way to potentially hedge bets and reduce risk would be by also diversifying income streams. Given that diverse agroforestry regimes can also deliver substantial ecosystem services (the benefits nature provides to humans) when compared with conventional agriculture (Idol et al, 2011;Torralba et al, 2016;Kay et al, 2019), then native agroforestry farms could also consider designs that have the potential to attract payments for providing ecosystem services (PES) (Farley and Costanza, 2010;Rodríguez-Ortega et al, 2018;Salzman et al, 2018;. Across Australia, the most prevalent PES is the Carbon Emissions Reduction Fund, which makes payments to farmers for the generation of carbon credits (representing the storage or reduction of carbon).…”

Ecosystem Services in U.S. Environmental Law and Governance for the Ecosystem-Based Management Practitioner

“…The field of ecosystem services accounting and valuation is an ongoing area of scientific development. Pardy (2014) describes the three primary approaches for protection of ecosystem services as: (1) a regulatory approach (e.g., da Silva and de Carvalho 2018); (2) payments to protect ecosystem services (e.g., Hirsch 2007;Ruhl 2008;Benjamin 2013;Salzman et al 2018), including investments in green infrastructure (Cosens and Fremier 2014;Salzman et al 2014; da Silva and de Carvalho 2018); and (3) market-based approaches (e.g., Salzman 2005;Hirsch 2007;Glicksman and Kaime 2013;Kaime 2013). From an environmental law perspective, the authority for using valuation and accounting, and the range of potential approaches and methodologies themselves are all areas of ongoing development, case law, and legal debate.…”

“…Further discussion on issues associated with geographic boundaries in environmental law and policy are outside the scope of this chapter, but the reader is directed to Womble and Doyle (2012) and Ruhl et al (2009) for more information. Ruhl and Salzman (2007) and Salzman et al (2018) present an overview of payments for ecosystem services, including both positive and negative incentives ("carrots vs. sticks"; Salzman et al 2018) from a mitigation context.…”

Financial incentives for large-scale wetland restoration: Beyond markets to common asset trusts

“…[9][10][11] Among these approaches, public/private funding schemes that include payments for ecosystem services (PES), provide a potential way of raising the financial capital needed to deliver large-scale wetland restoration. [12][13][14] PES schemes may be regulated (e.g., government-led programs to achieve legislated environmental limits) or voluntary (e.g., non-government organization-led programs to achieving non-binding goals), and seek to provide payment for the additional or sustained existing ecosystem services that restored ecosystems provide, often to offset impacts elsewhere.…”

“…PES schemes have primarily arisen from trading carbon for climate change mitigation or trading nutrients for water quality improvement, mitigation banking, or sale of habitat protection/ restoration ''stamps.'' 12,15 New scheme mechanisms (e.g., crowd funding), new support technologies (e.g., block-chain mechanisms and remote sensing), and new opportunities (e.g., blue carbon, property protection, 16 and bioenergy) are on the horizon and present options for schemes that endeavor to fund future wetland restoration within the UN ''decade of ecosystem restoration (2021-2030).'' 17 While promising, PES schemes do not often deliver the expected benefits from wetland restoration.…”