Paying for Ecosystem Services—Promise and Peril

Payment mechanisms designed without regard to the properties of the services they cover may be environmentally harmful. The Millennium Ecosystem Assessment concluded that over the past 50 years, 60% of all ecosystem services (ES) had declined as a direct result of the growth of agriculture, forestry, fisheries, industries, and urban areas (1). This is not surprising: We get what we pay for. Markets exist for the products of agriculture, aquaculture, and forestry. But the benefits of watershed protection (2), habitat provision (3), pest and disease regulation (4), climatic regulation (5), and hazard protection (6) are largely unpriced. Because existing markets seldom reflect the full social cost of production, we have incorrect measures of the scarcity of some ES and no measures for the rest.

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