An assessment of market-based approaches to providing ecosystem services on agricultural lands

Abstract Market-based approaches are increasingly being advocated as tools for achieving the conservation of ecosystem services. We examine the reasons why markets so far appear to have failed to provide an efficient allocation of many ecosystem services, and identify the conditions under which markets deliver efficient resource allocation. We discuss different forms of market-based approaches to ecosystem services and identify the characteristics of services that make them better suited to one or another of these approaches. We find that lack of low-cost measurability and valuation currently precludes efficient allocation of many ecosystem services through market-based approaches. Still, some forms of market-based approaches hold promise for cost-effectively managing some ecosystem services provided by and to agricultural lands. In many cases some form of well-designed government involvement will be required to seek outcomes that protect the public interest.

[1]  J. Boyd,et al.  Landscape Indicators of Ecosystem Service Benefits , 2002 .

[2]  Lisa A. Wainger,et al.  Wetland Value Indicators for Scoring Mitigation Trades , 2001 .

[3]  Bo Gustafsson,et al.  Scope and limits of the market mechanism in environmental management , 1998 .

[4]  Robert Costanza,et al.  Economic Reasons for Conserving Wild Nature , 2002, Science.

[5]  Stefano Pagiola,et al.  Selling Forest Environmental Services : Market-Based Mechanisms for Conservation and Development , 2002 .

[6]  James E. Salzman,et al.  Currencies and the Commodification of Environmental Law , 2000 .

[7]  Lisa A. Wainger,et al.  Measuring Ecosystem Service Benefits: The Use of Landscape Analysis to Evaluate Environmental Trades and Compensation , 2003 .

[8]  Geoffrey Heal.  Valuing Ecosystem Services , 2000, Ecosystems.

[9]  P. Eugene,et al.  RELATIONSHIPS BETWEEN STRUCTURE AND FUNCTION IN THE ECOSYSTEM , 1962 .

[10]  J. Buongiorno,et al.  Willingness to pay for forest amenities: The case of non-industrial owners in the south central United States , 2006 .

[11]  R. O'Neill,et al.  The value of the world's ecosystem services and natural capital , 1997, Nature.

[12]  S. Carpenter,et al.  Global Consequences of Land Use , 2005, Science.

[13]  A. Troy,et al.  Mapping ecosystem services: Practical challenges and opportunities in linking GIS and value transfer , 2006 .

[14]  Alan Randall,et al.  Resource Economics: An Economic Approach to Natural Resource and Environmental Policy , 1981 .

[15]  R. D. Groot,et al.  A typology for the classification, description and valuation of ecosystem functions, goods and services , 2002 .

[16]  H. Mooney,et al.  Human Domination of Earth’s Ecosystems , 1997, Renewable Energy.

[17]  Dennis Wichelns,et al.  Measuring heterogeneous preferences for preserving farmland and open space , 1998 .

[18]  Millenium Ecosystem Assessment.  Ecosystems and human well-being: synthesis , 2005 .

[19]  Gretchen C Daily,et al.  Conservation Planning for Ecosystem Services , 2006, PLoS biology.

[20]  Peter James,et al.  The Green Bottom Line , 1998 .

[21]  J. Losey,et al.  The Economic Value of Ecological Services Provided by Insects , 2006 .

[22]  J. Fox,et al.  Status of Species Conservation Banking in the United States , 2005 .

[23]  Jeff L. Brown.  Protecting the source , 1996 .

[24]  Roy Brouwer,et al.  Environmental value transfer: state of the art and future prospects , 2000 .

[25]  Kevin J. Boyle,et al.  Valuing ecosystem services: toward better environmental decision-making , 2005 .

[26]  J. Stiglitz,et al.  The Great Transformation: The Political and Economic Origins of Our Time , 2001 .

[27]  Dietrich Earnhart,et al.  Using Contingent-Pricing Analysis to Value Open Space and Its Duration at Residential Locations , 2006, Land Economics.

[28]  R. Norgaard.  Economic indicators of resource scarcity: A critical essay , 1990 .

[29]  J. Boyd,et al.  What Are Ecosystem Services , 2006 .

[30]  Neal M. Williams,et al.  The area requirements of an ecosystem service: crop pollination by native bee communities in California , 2004 .

[31]  Muhammad Ibrahim,et al.  Paying for Biodiversity Conservation Services in Agricultural Landscapes , 2004 .

[32]  J. Boyd,et al.  What are Ecosystem Services? The Need for Standardized Environmental Accounting Units , 2006 .

[33]  N. Landell-Mills,et al.  Silver bullet or fools' gold? A global review of markets for forest environmental services and their impact on the poor. , 2002 .

[34]  N. Myers,et al.  Perverse Subsidies: How Tax Dollars Can Undercut the Environment and the Economy , 1998 .

[35]  M. Bennett,et al.  The green bottom line : environmental accounting for management : current practice and future trends , 1998 .

[36]  Terry L. Anderson,et al.  Free Market Environmentalism , 2019 .

[37]  E. Munson.  Ecosystems and Human Well-being : Current State and Trends Main Messages , 2006 .

[38]  William J. Sutherland,et al.  How effective are European agri‐environment schemes in conserving and promoting biodiversity? , 2003 .

[39]  William R. Dolphin,et al.  Costs of Sprawl -- 2000 , 2002 .

[40]  J. Hecht.  National Environmental Accounting: Bridging the Gap between Ecology and Economy , 2005 .

[41]  Robert Bigelow,et al.  A status report , 1992, Comput. Law Secur. Rev..

[42]  J. Loomis,et al.  Potential non-market benefits of Colorado's agricultural lands : a review of the literature , 2000 .

[43]  G. Likens,et al.  Technical Report: Human Alteration of the Global Nitrogen Cycle: Sources and Consequences , 1997 .

[44]  T. Brown,et al.  Defining, valuing and providing ecosystem goods and services , 2007 .

[45]  L. Shabman,et al.  Past, Present, and Future of Wetlands Credit Sales , 2004 .

[46]  Richard C. Bishop,et al.  Endangered Species and Uncertainty: The Economics of a Safe Minimum Standard , 1978 .

[47]  J. Bergstrom,et al.  Status of Benefits Transfer in the United States and Canada: Reply , 1999 .

[48]  G. Daily.  Nature's services: societal dependence on natural ecosystems. , 1998 .

[49]  G. Heal,et al.  Economic returns from the biosphere , 1998, Nature.

[50]  G. Daily,et al.  ECOSYSTEM SERVICES: Benefits Supplied to Human Societies by Natural Ecosystems , 2007 .

[51]  R. Repetto,et al.  Wasting Assets: Natural Resources in the National Income Accounts , 1989 .

[52]  K. Arrow,et al.  The New Palgrave Dictionary of Economics , 2020 .

[53]  George Van Houtven,et al.  Benefit Transfer via Preference Calibration: “Prudential Algebra” for Policy , 2002, Land Economics.