Ecosystem Markets: Making Them Work - 2009
Conservation professionals across the country are looking for innovative strategies to protect and restore ecosystems. One of the most promising is the development of new markets that create value for ecosystems and the services they provide. But many developmental issues remain before ecosystem markets achieve their full potential as a priority conservation tool.
To inform and speed development of market-based conservation, the American Forest Foundation and Northwest Environmental Business Council (NEBC) co-hosted the National Ecosystem Markets Conference on June 18-19th in Portland, Oregon. More than 200 national and regional experts, innovators, resource professionals, buyers and sellers, and hands-on users of evolving market models all gathered to discuss lessons and opportunities. The success of such markets will become an increasingly important tool for family forest owners in maintaining healthy forests on their land. The key attraction of such market-based initiatives is the ability to generate both economic and ecological gains for forests and other natural areas.
Conference presentations included significant new findings on:
- Ecosystem Markets — Progress and Lessons Along the Path
- The Business Opportunity
- Market Design — Policies and Regulation-Based Markets
- Market Tools & Mechanisms
- Voluntary Market Opportunities
- Case Studies on Watershed Services, Species & Habitat Offsets, and Carbon Credits
- What’s Next — Filling the Gaps
Keynote speakers Kate Brown, Oregon Secretary of State and Sally Collins, Director of USDA’s Office of Ecosystem Services and Markets kicked off the event with insightful introductions to ecosystem markets as the next big wave in the conservation movement, providing mechanisms to recognize and account for the true economic and ecological value of our nation’s private forests, grasslands, and farms.
Kate Hamilton, Director of Forest Trends, inspired the crowd with market-trend data citing more than 100% growth for the U.S. voluntary carbon markets in 2008, worth over $705 million. With national and global climate change mitigation agreements expected in the coming years, carbon markets are anticipated to reach the billions of dollars. However, as
Betinna von Hagen, of Ecotrust Forest Management stated in her “observations from the bleeding edge,” the devil is in the details and ever-changing rules and red tape have dramatically increased the costs of entry and efficiency of emerging carbon markets.
Frank Casey, economist with Defenders of Wildlife agreed, suggesting that state and federal agencies have a major role to play in advancing the use of ecosystem markets. Casey argued that agencies should promote transparent, credible, and consistent protocols that focus on ecological outcomes that address multiple values, reward strategic investments, and balance precision and practicality.
John Campagna, Managing Director of Benchmark Asset Managers, provided the unique perspective of the business sector by presenting examples of innovative private capital and debt financing schemes to restore the Chesapeake Bay. John sees these approaches as evidence that Ecosystem Markets are beginning to be viewed in similar ways to traditional financial opportunities by investors.
Case studies from the water sector included the
Bay Bank, a voluntary multi-credit market-based approach, focused on restoration of the Chesapeake Bay watershed. Water quality markets in the Great Miami River in Ohio were also highlighted.
Dusty Hall, of the Miami Conservation District, provided in-depth lessons of their successful pilot project which utilized a reverse auction bidding process to implement 49 nutrient-reduction projects leading to 326 tons of nitrogen and phosphorous reductions and payments totaling over $937,000 to landowners. Market expansion is planned for the near future which Dusty believes will lead to “thriving communities, a healthy watershed, and a higher quality of life, sustained by well-managed water resources throughout the watershed.”
Other conference sessions dealt with essential tools and systems, such as
credit registries, nutrient-reduction calculators,
carbon protocols, and
ecosystem services mapping software. These tools ensure transparent markets that attract buyers and remain credible to regulators.
The Foundation, along with the
Willamette Partnership and
Clean Water Services organized a field day following the conference to provide attendees an opportunity to see conservation forestry in action. Participants visited several Washington County sites engaged in ecosystem markets, including forests owned by the City of Forest Grove managed as part of its municipal water supply. Participants also visited Anne and Richard Hanschu, the 2006 Western Regional Outstanding
Tree Farmers of the year, to discuss how small forest owners are trying to access ecosystem markets. The last stop included a walk through an urban stream's ten years of riparian restoration conducted by Clean Water Services, part of its temperature reduction water quality trading program.
As the premier event of its kind, the conference and field day engaged a diverse group of stakeholders focused on ecosystem markets for family forest owners. In the future the American Forest Foundation and its partners will continue to bring this community together to ensure that family forest owners can continue to manage their land for the critical services that forests provide.
Full conference information and speaker presentations For additional information on ecosystem markets and conservation incentives contact Todd Gartner, M.F., Conservation Incentives Manager, at the American Forest Foundation,
tgartner@forestfoundation.org, 202-463-5181.
Photos courtesy of Mac Martin, Clean Water Services 
