Ecosystem Services

What are ecosystem services?

Everyone in the world depends on the Earth’s ecosystems and the services they provide, such as food, water, disease management, climate regulation, spiritual fulfillment and aesthetic enjoyment. 

There are different categories of ecosystem service market opportunities:

• Carbon

  Across the world, people are becoming more concerned about carbon emissions and global warming. In the United States, companies interested in offsetting their carbon emissions turn to the Chicago Climate exchange, a voluntary greenhouse gas market.
  
  Landowners have an opportunity to be paid for managing their forestlands to maximize carbon sequestration. Land certified under ATFS is eligible to be included in projects registered with the Chicago Climate Exchange, but not all ATFS certified lands will be appropriate for carbon projects. Many times, landowners must contract with an aggregator organization to have their lands included in a larger pool so that they can accumulate enough carbon to trade.
  
  ATFS is currently working on three aggregation pilot projects to test various business models for aggregators so that family forest landowners may be more involved in these emerging markets.

• Water

  The quality of our water supplies and the quantity of water our reservoirs hold is becoming an important issue for many communities across the U.S. Water issues are likely to become even more important in the future and local officials are beginning to see the value of forests for protecting their water values.
  
  There is the potential for Tree Farmers to become involved in water quality/quantity initiatives. The conservation initiative established to protect the water source of the New York City Watershed is an example of a market based approach to protect water quality by protecting forests. 

• Biodiversity

  Market systems established to protect elements of biodiversity operate in many different ways. Wetlands mitigation banking is the grandfather of all market based approaches to conservation. Wetlands mitigation banking was established with guidance from the U.S. Fish & Wildlife Service more than 25 years ago.
  
  The system was established to offset impacts anticipated by state transportation departments and other government agencies. Conservation banking, referring to both species banking and habitat credit trading market based approaches, seeks to reward landowners for managing of endangered species.
  
  The American Forest Foundation received a conservation innovation grant from the National Resources Conservation Service to develop a habitat credits bank for the Gopher Tortoise in portions of Alabama and Georgia, and will be partnering with several conservation groups and state agencies to complete this project.

Why are ecosystem services a hot topic?

Land management and conservation continue to evolve as we learn more about the dynamic landscapes and resources that we care for.

In recent years, attention has shifted toward ensuring the sustainability of natural systems, within the context of human activities.  People and lawmakers are beginning to see that the costs associated with the depletion of natural systems have long term consequences.  Valuing the ecosystem services provided by healthy natural systems is one way to ensure that they will be managed sustainably.

AFF's work is about highlighting the benefits provided to people by healthy ecological systems.  The hope is that people will continue to see the values provided to them by nature, so they will in turn take action to sustainably manage natural resources in ways that the many ecological services they provide will continue to be available.

How do ecosystem markets work?

Just like any other marketplace, ecosystem markets work based on supply and demand.  Working with a variety of partners to create the demand for a paid supply of these services.  The services—clean water, wildlife protection, even carbon storage—have been provided for free.  AFF's work is to generate income for forest owners for these services, so they can continue to offer them through healthy and productive forests.

What does that have to do with me and my woods?

More than 10 million landowners own 264 million acres—or 35 percent—of forestland in the U.S. Privately owned woodlands provide many benefits for all Americans, in the form of clean water, wildlife habitat, and forest products.

Most forestland owners have expenses associated with the ownership and management of land, including property taxes.  Many landowners are interested in opportunities available to generate income on their land in ways that mesh with overall ownership goals and objectives.

Some landowners harvest timber, others lease land for hunting, some host recreation sites and some offer protection for endangered species. It often takes a number of these income streams together to help offset land ownership costs. Payments for ecosystem services, such as carbon storage and water filtration, are one way to diversify income streams for forestland owners.

In any given year, landowners may receive some income from harvesting timber, some income from Farm Bill conservation programs, and some income from a hunting lease. A landowner may also receive income from selling carbon credits based on the amount of carbon held in trees on their property, or from water quality or habitat credits generated through land management practices designed to protect clean water and wildlife habitat.

What we hear all the time from woodland owners is that they would reinvest these income streams back into their property. If payment for ecosystem services were more widely available, more family forest owners would have the resources to put back into their forestland.

What is American Forest Foundation doing to support ecosystem services that help private landowners?

Well-managed private forestland is critical to protect the diversity of nature and maintain healthy and productive ecosystems across the country. Right now, owners of working forestland are looking for ways to continue their sound stewardship and gain access to the new market opportunities for ecosystem services that are emerging. 
 
The American Tree Farm System is a program of the American Forest Foundation (AFF).  AFF works with other conservation organizations to promote policies that will help advance ecosystem markets.  This in turn, can help Tree Farmers gain more income for the good stewardship they are doing on their land. 

AFF co-sponsors the annual national Ecosystem Markets Conference, now in its 4th year.  The conference convenes the world’s top thought leaders to not only discuss the state of ecosystem markets, but to tackle the tough issues facing these markets in order to determine how to drive them forward.  Register today for the Ecosystem Markets Conference in Madison, Wisconsin, June 29-July 11, 2011.

AFF has also developed pilot projects to demonstrate different ways that landowners may receive payments for protecting water quality in the northeast, and for creating and maintaining gopher tortoise habitat in the Southeast.

The Katoomba Group's Ecosystem Marketplace: Information on various ecosystem markets in the United States and internationally.

Chicago Climate Exchange (CCX): CCX develops and administers the largest voluntary carbon trading market in the United States.

Pacific Forest Trust's carbon trading project on the Van Eck Forest: Pacific Forest Trust works to conserve working forests for all of their public benefits – wood, water, wildlife and a well-balanced climate.

Pacific Forest Trust's Published Reports: Pacific Forest Trust has also published reports on opportunities for private forestland owners to become involved in carbon markets.

Society of American Foresters: SAF has published an extensive report on climate change and the role of forests and opportunities for forest landowners.

Millennium Ecosystem Assessment (MA): Assess the consequences of ecosystem change for human well-being and the scientific basis for action needed to enhance the conservation and sustainable use of those systems and their contribution to human well-being.