The global value of ecosystems services has been calculated at $33 trillion, far more than global GNP. Without these services–from clear water to breathable air–our economy would cease to function. Yet how much is that wetland or forest in your backyard worth in cold hard cash? Not much beyond the value of the land itself, probably–unless you happen to live in the Chesapeake Bay watershed.
The pioneering Bay Bank has created one of the first comprehensive markets for regional ecosystem services in the country by connecting landowners with financial resources needed to protect natural lands. It was created to help stop the deterioration of the Chesapeake Bay ecosystem (which includes delicious Chesapeake blue crabs, above). It’s an ecosystem which continues to decline: A recent scientific report card of Bay health by EcoCheck >awarded the region C’s and D’s, with the occasional F.
The problem is daunting. Restoring the Chesapeake’s streams, farms, forests, wetlands, and ultimately the Bay requires the collective action of millions of individual (and often private) farmers and woodland owners. There have been regulations established, intended to either force or entice landowners to conserve their land. But these attempts failed to establish a market for regional ecosystem services (or even effective conservation mechanisms) because critical pieces of infrastructure–registries, service providers, transaction exchanges, and monitoring services–were missing or prohibitively expensive.
Now, says Bay Bank, there is an efficient way to link them with capital. Bay Bank has built the marketplace for realistic financing for private conservation by pulling these together under a single entity. Landowners in the region (including New York, Pennsylvania, Delaware, Maryland, Virginia, and West Virginia) can now offer up their lands to earn credits or financing for forest and habitat conservation, carbon sequestration, water quality protection, and wetlands restoration. A web-based tool called LandServer serves up instant ecosystems services reports, and matches landowners with potential buyers in the online marketplace.
The first pilot projects began in Maryland and Delware in 2010, and the site aims to be fully functional by 2011. For now it’s expensive: The market is mainly developers who need to fund habitat or forest conservation to offset their commercial projects. But someone may find a way to aggregate demand among smaller buyers so anyone can make a major purchase. The first deals are up now.