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Payments for ecosystem services

Incentives for landowners to keep their forest as forest

 

People who own forested land may be able to sell the ecosystem services the land provides.

scenic landscape
Forests are home to wildlife, and provide drinking water, carbon storage, and much more. Such ecosystem services can be bought and sold. USDA Forest Service photo.

Hunting leases are one example. For the years 2010-2019, payments for hunting leases, wildlife viewing fees, and other such services averaged $1.5 billion a year, as USDA Forest Service research economist Greg Frey and his colleagues estimate.

Markets for ecosystem services are vast and complex – even without timber or non-timber forest products, which the researchers did not include in their assessment.

Direct government payments, voluntary markets such as hunting leases and conservation easements, and compliance markets for carbon and wetland credits were assessed. Compliance markets are established through state laws and are extremely varied. One example of how they can work is that a landowner restores a wetland and then sells wetland credits to a company or agency that aims to replace a similar wetland site with a road, built structure, or some other developed use.

“Some of the most active and innovative wetland and water quality markets are in the South,” says Frey.

Some states also have programs that pay forest landowners for carbon storage, as an offset to emissions elsewhere.

“The prices of carbon and wetland credits are still a huge unknown. They are quite volatile,” says Frey.

Across all markets, the total value of payments for forest-based ecosystem services was $3.3 billion a year for the decade 2010 to 2019 (in 2015 dollars). The average annual payment was about seven dollars an acre.

Frey and his colleagues used publicly available data, including surveys from the U.S. Census Bureau and the Fish and Wildlife Service.

Read the article in the journal Ecosystem Services. View the compiled annual, national and state-level data. For more information, email Greg Frey at gregory.e.frey@usda.gov.

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