Developing payments for ecosystem services programs that are sustainable, fair, and efficient
Introduction:
Since the 1990s, market-based approaches to environmental
problems have gained ground as practical, efficient policy tools.
With understanding of the importance of ecosystem services
growing, "payments for ecosystem services" or PES that reward private
landowners for providing public goods are becoming popular techniques.
Some of the most well known PES programs include voluntary (in
the U.S.) or Kyoto-mandated (in the rest of the world) efforts to
sequester or store carbon dioxide, a key contributor to global climate change. In the U.S., PES programs have
existed for at least the last 20 years in the form of subsidies to farmers to
restore wetlands, protect erodible lands, and provide wildlife habitat.
There is also growing interest in many areas to develop markets
for watershed services - such as water supply, water quality, sediment
and nutrient reduction in lakes and rivers. In perhaps the best
known example of this, New York City saved billions of dollars by
paying upstream landowners to protect their watershed rather than
building and operating a massive, costly treatment system.
PES programs are not a cure-all, though. Systems must be
carefully designed to respect ecological limits and thresholds, provide
a sustainable funding mechanism, raise and distribute funds fairly, and
reach environmental goals more cheaply and quickly than traditional
regulatory approaches. Markets may not be appropriate for all
situations, and can lead to unintended and undesirable outcomes if not
thoughtfully designed. The recent Heredia Declaration on Payments for Ecosystem Services
was developed by a group of international experts in PES as a set of
guidelines for PES development. My research interest in PES
includes developing new tools to fund conservation, particularly for
private landowners.
Payments for ecosystem services links:
UVM/Gund Institute and Payments for Ecosystem Services
Environmental Defense - Center for Conservation Initiatives
Conservation Finance Guide
U.S. agricultural PES through the USDA
The 2007 Farm Bill will impact the future of U.S. agricultural ecosystem service payment programs
The Wetlands Initiative's proposal for "nutrient farming" on the Illinois River
Katoomba Group - Ecosystem Marketplace
DEFRA - agricultural PES programs in the United Kingdom
Rewarding Upland Poor for Provision of Environmental Services (RUPES) in Asia
Costa Rica's National Forestry Financing Fund (FONAFIFO)
Peter Barnes' book "Capitalism 3.0" suggests that we can protect ecosystem services for the public good through a new model of "common asset trusts." Earth, Inc. is a new organization devoted to promoting this principle.
Other perspectives on payments for ecosystem services:
"I do not challenge the purchase of public lands for conservation... I
do challenge the growing assumption that bigger buying is a substitute
for private conservation practice. Bigger buying, I fear, is
serving as an escape-mechanism - it masks our failure to solve the
harder problem. The geographic cards are stacked against its
ultimate success. In the long run it is exactly as effective as
buying half an umbrella... conservation will ultimately boil down to
rewarding the private landowner who conserves the public interest"
- Aldo Leopold, 1934
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For more information, contact kbagstad@uvm.edu
