What are ecosystem services | Paying for ecosystem services | An example
The natural world does more than provide raw materials for human use. It also performs a host of services for people:

• Producing oxygen and storing carbon dioxide
• Purifying, cooling, and storing water
• Reducing or preventing damage from flooding
• Providing habitat for fish and wildlife
• Improving pollination
• Fertilizing the soil

Well-managed forests, functioning river floodplains, bands of diverse streamside shrubs and woodlands, and healthy wet prairies and wetlands provide vital services for people.

These ecosystem services are critical to human life. If they were not provided for us by the natural world, we would have to try to use technology to create them, at great difficulty and expense (if they could be replicated at all).

Instead, ecosystem services are provided for us through natural processes in intact ecosystems. When we conserve, restore, and protect our ecosystems, we are maintaining our ability to meet our own needs.

Paying for ecosystem services

The idea that healthy, vibrant ecosystems meet the needs of both the environment and society has generated a great deal of enthusiasm for ecosystem services markets. These innovative financial structures quantify the value of ecosystem services so that the people who actually restore and maintain ecosystem services can get paid for doing so. The result is expanded conservation efforts at strategic locations—and significant improvements in ecosystem health. 

As in other markets, paying for ecosystem services involves the following:

• Defining a service or function to be traded (improving water quality, for example)
• Measuring that service or function (checking the levels of specific pollutants, for example)
• Arranging for quantities of what is being measured to be paid for or invested in (agreeing on how much a given pollutant will be reduced each year, and at what price)

Developing markets in which ecosystem services can be bought and sold represents new thinking about how we can maintain these services over the long term, for our own benefit.

Example

A garden-variety scenario for an ecosystem service payment would be a local factory paying a farmer to improve the quality of water draining off his or her land so that the factory wouldn’t need to invest additional water improvement infrastructure. Here, the ultimate goal of water quality is met through the use of a natural process for less money than the creation of new infrastructure. Furthermore, if the behavior of the private landowner also provides secondary benefits, like creating new habitat or sequestering carbon, then the public benefits increase—without additional costs.