Ecosystem Service Markets: Strategies for Sustaining

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Ecosystem Service MarketsStrategies for
Sustaining Abundant Clean Water
Mark S. Kieser Senior Scientist Kieser
Associates and Acting Chair Environmental Trading
Network
March 1, 2007
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Ecosystem Services Traded
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Watershed Scale WQT Programs
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Statewide Trading Programs
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Benefits of Water Quality Trading
With each trade, a portion of the reductions
(credits) can be retired for a net
environmental benefit
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Ohios Great MiamiRiver Watershed

• 4,000 mi²
• Major tributaries
• Stillwater River
• Mad River
• 1.5 million residents
• Dayton is largest city
• Agriculture is dominant land use

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Watershed Total Cost Comparisons (Net present
worth over 20 years 5 interest rate)
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Local/Regional WQ Benefits

• 380M Savings with Water Quality Trading
• Net retirement of some reductions
• Substantial ancillary benefits (hydrology,
  sediment)

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Early Signs of Payment Integration

• Pennsylvania
• Conservation tillage for nutrients, sediment,
  carbon
• Great Miami River, Ohio
• Ag BMPs for nutrients, instream habitat, carbon
• Florida rangelands
• Water storage, P, habitat enhancement
• Vermillion River, Minnesota
• Flow, temperature, sediments, riparian quality
• Great Lakes
• Water quantity/water quality offsets (flow,
• nutrients, green space, wetland banks, LID)

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Ecosystem Market Considerations

• Mix of regulatory drivers and market
  opportunities
• Enforceable caps
• Performance vs. Technology Requirements for
  urban
• stormwater (load limit vs. cheapest BMP)
• Credit retirement with each trade
• Investment scale (bilateral trades vs. watershed
  scale)
• Overlapping environmental commodity markets
• Consistent/standardized quantification
• Recognizing common environmental outcomes
• or metrics across all programs
  (quality/quantity)
• Markets take time to develop