Abstract: Natural ecosystems provide a variety of benefits to society, known as “ecosystem services.” Fundamental to the provision of ecosystem services in a region is its underlying biodiversity, i.e., the wealth and variety of plants, animals, and microorganisms. Because the benefits from ecosystem services and biodiversity are not valued in market exchanges, private landowners tend to undersupply them. We compare and contrast the different approaches taken to providing ecosystem services on private land in three federal programs—the Endangered Species Act, the Conservation Reserve Program, and Section 404 of the Clean Water Act. The Endangered Species Act (ESA) places restrictions on land uses for private landowners if endangered species, or critical habitats for endangered species, are found on their properties. The Conservation Reserve Program (CRP) compensates farmers for removing valuable property from agricultural production to preserve wildlife habitat, water and soil quality, and other ecosystem values. Section 404 of the Clean Water Act prohibits destruction or damage to wetlands, unless individuals buy credits for equivalent wetlands created by third parties—so-called “wetlands mitigation banks.” These three policies run the gamut from a command-and-control regulatory approach to a “payment for ecosystem services” option. We summarize the economics literature on key findings from these programs.

Abstract: Conservation investments are increasingly evaluated on the basis of their return on investment (ROI). Conservation ROI analysis quantitatively measures the costs, benefits, and risks of investments so conservancies can rank or prioritize them. This paper surveys the existing conservation ROI and related literatures. We organize our synthesis around the way studies treat recurring, core elements of ROI, as a guide for practitioners and consumers of future ROI analyses. ROI analyses involve quantification of a consistent set of elements, including the definition and measurement of the conservation objective as well as identification of the relevant baselines, the type of conservation investments evaluated, and investment costs. We document the state of the art, note some open questions, and provide suggestions for future improvements in data and methods. We also describe ways ROI analysis can be extended to a broader suite of conservation outcomes than biodiversity conservation, which is the typical focus.

Abstract: Tropical forests provide critical global and local ecosystem services and habitat for many of the world’s plants and animals. Their loss threatens the sustainable economic growth and social stability of developing countries, and illegal deforestation abroad places U.S. producers at an unfair disadvantage. For these and other reasons, the United States has long been engaged in programs to reduce forest loss. This engagement has recently increased, with the new Presidential Global Climate Change Initiative including a pillar dedicated to slowing forest loss. While promising, this new funding and coordination is insufficient, with a narrow focus on climate-based development assistance. Engaging the full suite of forest policy levers in the federal government, or taking a “whole-of-government” approach, would provide greater immediate impact in preventing forest loss while building the foundations of a working landscape ethic. In this discussion paper, we explore the opportunities to expand U.S. contributions to reducing tropical deforestation through this approach. A whole-of-government approach to international deforestation consists of coordinating and focusing the programs across the federal government that could reduce the rate of tropical forest loss. It is an integrated strategy that employs existing activities and authorities of the U.S. government and directs them under an overarching goal of reducing deforestation in tropical forest countries, while continuing to support other developing-country goals, such as economic development, health, food security, and biodiversity. We identify three major areas where policy adjustments and actions by relevant authorities can have immediate and tangible impact on reducing deforestation.

Abstract: Despite the recent popularity of conditional cash transfers (CCT) and payments for environmental services (PES) programs, what determines their success is not well understood. We developed a conceptual framework to give insight into some of the main determinants of CCT and PES program efficiency that hope to increase investments in human and environmental capital. We used a simple agent-based model and validated the results with empirical data from existing programs. We show that 1) the share of participants who meet the program’s conditions at baseline is a powerful predictor of program efficiency, (2) and selection bias erodes program efficiency to a large extent. (Selection bias stems from agents who already meet program criteria and who self-select into programs at higher rates than those who do not meet the conditions.) Based on these results, we discuss possibilities for improving efficiency—mainly by targeting applicants or increasing payments—and criteria for evaluating and choosing CCT, PES, or other policy instruments.

Abstract: This paper describes specific ways in which the analysis of ecosystem goods and services can be included in terrestrial carbon sequestration assessments and planning. It specifically reviews the U.S. Geological Survey’s LandCarbon assessment methodology for ecosystem services. The report assumes that the biophysical analysis of co-effects should be designed to facilitate social evaluation. Accordingly, emphasis is placed on natural science strategies and outputs that complement subsequent economic and distributional analysis.

Abstract: Choice experiments, a stated preference valuation method, are proposed as a tool to assign monetary values to environmental externalities during the ex-ante stages of environmental impactassessment. This case study looks at the impacts of the Costa Rican Institute of Electricity’s Toro 3 hydroelectric project and its affects on the Recreo Verde tourism center in San Carlos, Costa Rica.Compared to other valuation methods (e.g., travel cost and contingent valuation), choice experiments can create hypothetical but realistic scenarios for consumers and generate restoration alternatives for the affected good. Although they have limitations that must be taken into account in environmental impact assessments, incorporating economic parameters—especially resource constraints and tradeoffs—can substantially enrich the assessment process.

Abstract: The study describes existing federal policies that permit or promote ecosystem services analysis, management, investments, and markets. Our survey discusses: 1) current programs that stimulate or support the measurement of ecosystem services; 2) existing federal drivers of ecosystem services analysis; and 3) programs that stimulate investment in ecosystem services. Understanding existing capacity is important to federal and other leaders who see opportunities for environmental policy innovations—such as payments, markets, and management practices—based on ecological wealth and services.

Abstract: Wetlands are commonly understood to have the capacity to reduce the loads of excess nutrients, pathogens, sediments, and other contaminants generated by various activities in their catchment areas.However, quantifying these “services” is difficult and most research in this field has concentrated on artificial treatment wetlands. Understanding the value of their water treatment characteristics, as well as the other services they provide, is increasingly recognized as essential to achieving a balance between conservation and activities that degrade or replace wetlands. The aim of this study is to estimate the water treatment capacity of wetlands on a landscape scale in the South Western Cape of South Africa and estimate the economic value of the service performed. We collected samples at the outflow points of 100 subcatchment areas and measured the loads of nitrogen, dissolved phosphorus, and suspended solids, which were analyzed with respect to detailed spatial data on land cover andwetlands area. Wetlands play a significant role in the reduction of nitrates, nitrites, and ammonium, but not dissolved phosphorus or suspended solids. Estimated removal rates range from 307 to 9,505 kg N per ha^-1 year^-1, with an average of 1,594 +/- 1,375 kg N per ha^-1 year^-1. Data from a number of water treatment works suggest that the cost of removal of ammonium nitrogen is in the order of ZAR 26 per kilogram. Applied to the wetlands in the study area—assuming wetlands do play a role in total phosphorus removal—this suggests that the average value of the water treatment service provided by wetlands in the study area is about ZAR 14,350 +/- 12,385 ha^-1 year^-1. These values are high enough to compete with the alternative land uses that threaten their existence. The results suggest that wetlands should be given considerably more attention in land-use planning and regulation.

Abstract: The paper addresses the definition and measurement of liability for marine oil pollution accidents. The economic value of lost or injured ecosystem goods and services is argued to be the most legally, economically, and ecologically defensible measure of damages. This is easier said than done, however. Calculating lost ecological wealth with any precision is an enormous scientific and economic undertaking. The paper proposes practical ways to improve our futureability to calculate such losses.