Can you put a price on nature? The prospects for ecosystem services markets.
The great variety of services that natural systems provide is rarely recognized. From water filtration to flood prevention to carbon sequestration, these ecosystem services are crucial to supporting both natural and human life. The cost of preserving these services is often far eclipsed by the cost of replacing them mechanically should they be lost, a point that is rarely appreciate economic markets. What can be done to correct this and ensure that natural systems continue to provide their much-needed benefits?
In his dissertation, Tijs van Maasakkers (PhD ’13) examines one solution that has been eagerly advanced in environmental circles: the ecosystem services marketplace. Similar to other environmental markets like carbon cap and trade schemes, ecosystem services markets are based on the idea that a developer who is likely to damage the ability of natural systems to provide their full benefits would have to pay for improvements elsewhere to offset these impact. In an early example, increases in water temperatures in Oregon’s Tualatin River threatened the survival of a number of local salmon species, a problem often corrected at great expense mechanically by chilling wastewater before releasing it. Instead, the local water utility opted to offer incentives to local landowners to plant shade trees along the river’s banks, cooling the river naturally, effectively, and at a lower cost.
If implemented well, ecosystem services markets could allow for continued economic progress without sacrificing natural systems. But, as Tijs shows in his study of efforts to create ecosystem services markets in the Willamette River basin and in the Chesapeake Bay, such markets are difficult to develop and face three important structural obstacles.
First, people care deeply about particular places, and tend not to view the services that are provided in one place as transferrable to another. Second, metrics that account for ecosystem services are not yet consistent, comprehensive, and universally accepted. Third, it has been difficult to establish a consensus among effected stakeholders about what these markets should look like.
These obstacles limit the potential of ecosystem services markets, and if they cannot be addressed, it is difficult to imagine how markets can be scaled up. Read more about the promises and pitfalls of ecosystem service marketplaces in Tijs’ dissertation.