Ecosystem Services
This basic issue of the public value of intact natural resources versus the private rights to harvest these resources for fiber, food or water has plagued policy makers for millennia. With the advent of ecosystem service payments and markets, we have an opportunity to address this dilemma in new ways.
Payment for ecosystem services, such as carbon storage or water quality, is not an entirely new concept. Since 1985, the government has compensated farmers for reducing soil erosion and creating habitat through the Conservation Reserve Program. Today, the scale and rapid adoption of new markets to reduce greenhouse gas emissions under the Kyoto Protocol has caught the eye and imagination of policy makers and entrepreneurs from California to Zimbabwe.
Ecosystem service market approaches are appealing because they combine the best of government and private enterprise. The government, representing the public interest, sets the cap (in the case of an undesired “bad”, such as greenhouse gas emissions) or the floor (in the case of a desirable good, such as biodiversity) and establishes the rules of the new market. The private sector is then free to innovate on achieving the desired outcome in the most effective way.
A September 2005 Scientific American article applied this concept to the family farm. In this idealized farm of the future, only 30% of revenue comes from traditional commodity sources such as wheat and wool. The other 70% comes from carbon credits, water quality credits and biodiversity credits. The farmer has every incentive to adopt this model because it provides greater revenue opportunities at less risk.
Ecotrust’s Bettina von Hagen has been writing and speaking on the subject on ecosystem services for years. Please contact Bettina to learn more about Ecotrust’s emerging Ecosystem Services program.
