Payments for Ecosystem Services

Abstract

Payments for ecosystem services come in several different conservation financing instruments such as: biodiversity offsets; watershed payments; and forest carbon markets, particularly blue carbon projects. The author presents an historical overview, provides more details on the instrument’s mechanisms, outlines the size of the instrument, presents one case study, and then undertakes both a financial analysis and a policy analysis, along with a future outlook. The case study is the Reef Credit Initiative. The Reef Credit Initiative is setting up the infrastructure for local Queensland landowners to develop projects which issue credits representing a reduction in nutrients, pesticides, or sediments. This infrastructure includes, for example, a publicly available standard and methodologies. The two main problems facing the Great Barrier Reef, asides from global climate change, that the Initiative is attempting to address is the runoff from agricultural lands throughout Queensland and the clearing of coastal wetlands.