The California regulatory environment is a clear indication that we, the people of California, value forestland for much more than its ability to produce timber. We also value the services that forests provide: clean water, wildlife habitat, open space, and the feeling of respite we experience when we look out over a well-managed unbroken forested landscape and imagine… that something is still right with the world. But, how much do we value them? We expect local ranchers pay their taxes, provide local jobs, and to maintain stream conditions that can support healthy salmon populations. But, we only want to pay them for raising timber and cattle—not for raising salmon… or murrelets, or owls.

Economists call the services provided by our forests ecosystem services. From an economist’s perspective the central problem is that there is no existing market for these services. We know it costs money to provide or preserve them, but without markets how do we estimate the value of specific ecosystem services? As the concept of payments for ecosystem services becomes mainstream—with emerging markets for carbon storage leading the way—it becomes increasingly important to understand the logic and potential behind efforts to create markets for ecosystem services.

The following links provide an introduction:

Ecosystem Services: A Primer
The Ecological Society of America (ESA)

Ecosystem Services: Benefits Supplied to Human Societies by Natural Ecosystems (pdf)
The Ecological Society of America

Human societies derive many essential goods from natural ecosystems, including seafood, game animals, fodder, fuelwood, timber, and pharmaceutical products. These goods represent important and familiar parts of the economy. What has been less appreciated until recently is that natural ecosystems also perform fundamental life-support services without which human civilizations would cease to thrive...

The United States Society for Ecological Economics (USSEE)

The USSEE provides a venue for a holistic and strong community of ecological economists, social and natural scientists, and people who care for the well-being of this planet and its inhabitants so as to allow this diverse membership to easily communicate with and learn from each other on a regular basis. We believe this will better enable members of the USSEE to develop solutions to our most pressing economic, social and environmental problems.

Ecosystem Services Markets (pdf)
Alicia Robbins 2005

This paper reviews examples of existing markets for ecosystem services in the United States and internationally, focusing on forest-lands. It includes a discussion of opportunities for the Pacific Northwest. It also lists databases of international clearinghouses of information on ecosystem services valuation and markets. The paper includes an appendix describing the principles of conservation economics and valuation methodologies for estimating the value of environmental variables.

USDA FS Website on Ecosystem Services

The Forest Service is exploring national opportunities to advance markets and payments for ecosystem services. With help from our partners and others, we will encourage broader thinking and collaboration that stimulates market-based conservation and stewardship.

The Katoomba Group: The Ecosystem Marketplace

The Ecosystem Marketplace seeks to become the world's leading source of information on markets and payment schemes for ecosystem services; services such as water quality, carbon sequestration and biodiversity. We believe that by providing solid and trust-worthy information on prices, regulation, science, and other market-relevant issues, markets for ecosystem services will one day become a fundamental part of our economic and environmental system, helping give value to environmental services that have, for too long, been taken for granted.

Pacific Forest Trust: Policy Initiative

The capacity of forests to become enhanced carbon sinks can bring added revenue to landowners through the emerging market in forest carbon credits. A well-organized forest carbon market can provide a financial incentive for landowners to permanently conserve more forests and practice the type of management that results in carbon-rich forests.

Forest Trends: Making Environmental Markets Work (pdf)

The paper argues that although markets can help maintain, provide, and distribute environmental goods and services, they require government will, government power, and established legal institutions to do so effectively.