Defenders' Experts
Ecosystem Marketplace
What is an ecosystem marketplace?
An ecosystem service is something that the earth does for society naturally, such as trees giving us oxygen and shade, forests purifying our drinking water, or wetlands filtering our wastewater. Conservation, restoration, and stewardship of our environment allows nature to deliver these services, including cleaning our water and air, providing fish and wildlife habitat, pollination, lessening environmental hazards, tempering our climate, controlling pests and disease, locking up carbon, and fertilizing our soils.
Although these services or goods are not typically bought and sold in the sense that food, building products, and manufactured goods are, an ecosystem market can arise when people are willing to pay to establish or enhance a particular natural function. For example, a developer wanting to build a new subdivision might choose to meet air quality requirements by paying a nearby farmer to plant trees to absorb the greenhouse gases over the life of the project.
Why is an ecosystem marketplace needed?
Society generally values clean air, water, fish and wildlife and natural landscapes. We have many regulations that constrain activities that are harmful to the environment, like discharging toxic chemicals, destroying endangered species habitat, killing migratory birds, or harvesting fish beyond a legal limit. Although these regulations are effective at stopping or limiting harmful acts, they are not always effective at requiring positive or restorative actions.
Ecosystem markets can offer an alternative approach to conservation that may achieve better results at a lower cost than simple compliance with existing regulations. Most regulations are narrowly focused and do not address many important environmental values.
Under most current mitigation schemes, industries, businesses, developers, and individuals whose activities cause adverse impacts to some natural resources must meet regulatory standards or compensate for additional unavoidable impacts. For example, a city might require a developer who cannot avoid impacts to a wetland to replace it, either on site or elsewhere; or state or federal laws require cities and industries to clean and cool wastewater before releasing it into a river.
Where impacts cannot be avoided completely or where a resource can be better protected elsewhere, ecosystem markets provide an alternative option: regulated parties (buyers) can pay other land and water managers (sellers) to restore wetlands, plant trees along streams, or provide other ecosystem improvements.
There are many other reasons for creating an ecosystem marketplace, including:
- Increasing the level of investment in conservation by tapping sources that are currently not participating in conservation activities would increase the scope and scale of investment, thereby resulting in additional ecological benefits;
- An efficient market-based system can provide greater ecological benefits at a much lower cost to responsible parties;
- Rural landowners find it increasingly difficult to remain profitable in the face of intense foreign competition and pressure to reduce prices for resource-based commodities like food and fiber. Markets for ecosystem services can supplement income from commercial products and diversify revenue for rural landowners, while also providing society with greater ecological benefits.
How is Defenders involved?
Defenders is a member of the Willamette Partnership, a nonprofit organization in Oregon working to create a multi-credit ecosystem marketplace to conserve fish and wildlife habitat, improve water quality, and find more effective ways to restore ecosystems. Visit Willamette Partnership web site.
For more information about ecosystem marketplaces, read the following Defenders publications:
The State of Washington is one of the few in the nation with an official policy acknowledging the importance of biodiversity conservation. This report provides information on market-based strategies and outlines the opportunities and challenges they present in Washington.
Opportunities exist in Oregon that will support development of an ecosystem marketplace, as well as some of the limitations that could hinder this development. By Gina LaRocco and Sara Vickerman. February 2007.
