Forest Economics and Policy Research in SRS

A Focus on Payments for Ecosystem ServicesJeff Prestemon, with assistance from Evan Mercer

Forest Economics and Policy:What we do

Forest Disturbance and Management Economics Economics of natural disturbances—fire, hurricanes, pests,

invasives—Holmes, Prestemon, Abt, Mercer Timber salvage economics—Prestemon, Holmes Climate change adaptation and mitigation—Holmes, Wear,

Prestemon Forests and crime—Prestemon

Policy and Program Evaluation Markets for ecosystem services—Mercer Taxes and forest management—Greene Policies and programs—Greene, Mercer

Natural Resource Assessment and Forecasting Markets and trade—Prestemon, Wear, Holmes, Abt Bioenergy markets—Abt Regional, national, and international assessments—Wear,

Prestemon, Abt, Holmes

Payments for Ecosystem Services

Ecosystem Services: the benefits people obtain from forests Marketable—e.g., hunting leases, water,

carbon credits Non-marketable—e.g., habitat for non-

game animal species, air filtration, esthetics

Why ‘Payments’ for Ecosystem Services?

Most ecosystem services are provided free of charge Production of ecosystem goods (such as timber

or oil) are favored over the conservation of ecosystems and services.

Forest land is undervalued Without a market and no government or private

sector actions, many ecosystem services are under-provided compared to how they are valued.

Markets can be developed Pay landowners for the services produced.

But who pays?4

Potential buyers of ecosystem services include

Drinking water providers Sewage treatment plants Developers Industrial polluters and energy

companies Individual Citizens and Communities Federal, state and local governments

Recent Efforts in Valuation 2010 National Report on Sustainable

Forests▪ Indicator 6.27 Revenues from Forest Based

Environmental Services (Mercer 2011) http://www.fs.fed.us/research/sustain/

Taking Stock: Payments for Forest Ecosystem Services in the United States. (Mercer, Cooley and Hamilton 2011)

▪ Ecosystem Marketplace and USDA Forest Service. http://www.forest-rends.org/documents/files/doc_2673.pdf

.

Taking Stock: Objectives

Assess state of forest-based PES in the United States

Focus on actual payments to landowners to manage (or reforest) their forestlands to produce ecosystem services

Total PES per Acre of Forest, 2007

$/acre

0.003 - 2.00

2.01 - 4.00

4.01 - 8.00

8.01 - 16.00

16.01 - 28.09

Total Payments for Forest Ecosystem Services Per Acre of each State's Forestland 2007

Overall Impact

Forest-based PES 2005-2007 At least $1.9 billion per year

By Source: Private: 81% Government Agencies: 19%

By Type Wetland Mitigation Banking: 38%

▪ 173 landowners Hunting Leases/fees: 22% Conservation Easements: 17%

▪ 1.8% of private landowners have them Carbon Offsets: 0.001%

New Work in Payments

U.S. Forest Service funded grant Evan Mercer is working with Buck Kline

(VA DOF) and Southern Group of State Foresters

Seeks to develop a methodology for producing consistent measures of these payments across states, get this approach broadly adopted

Contact: Evan Mercer, emercer@fs.fed.us, 919-549-4095