Can Ecomarkets Deliver Paydirt?

In the Winter 2011 issue of Headwaters Magazine, I write on ecosystem services and what markets that peddle in prairie dogs, sage grouse and wetlands might look like, and whether they can provide significant financial benefits to farmers and other landowners.

For the article, “Ecomarkets and the Farm of the Future,” I spoke with ranchers, environmentalists, government officials, professors, and one Green Party county commissioner/poet to learn about several efforts getting under way in Colorado, which would establish markets to pay landowners to protect and restore wetlands, floodplains and endangered species habitat, offset damages resulting from development, and provide a supplementary source of income for struggling farmers and ranchers.

Here’s an excerpt:

In southwestern Colorado, Art Goodtimes is also exploring options for payment for ecosystem services (PES) projects. A performance poet, environmental activist and San Miguel County commissioner, in no particular order, Goodtimes was inspired while attending a conference on collaborative conservation at Colorado State University in September 2009, where he heard Sally Collins and others speak. “They all were talking about PES projects, but no one was really doing them,” says Goodtimes, who decided his county would be a prime area for a market-based experiment.

San Miguel County voters had approved a bond issue in 2001 to pay landowners to preserve open space. The initiative funded the purchase of development rights from farm properties, which prohibits subdivision of parcels and puts conservation easements in place. Goodtimes considered the county’s support of the program as a signal that his constituents—a mix of liberal-minded skiers and hippies in Telluride and conservative ranch families in much of the rest of San Miguel—would be open to innovative PES projects that would support ranch families and local land stewardship.

With financial support from the county and a grant from Colorado State University’s Center for Collaborative Conservation, Goodtimes has convened a county working group, receiving support from Toombs, Fankhauser and Goldstein, to develop local PES programs. Similar to the Piñon Canyon idea, one project could center on rare plants, identified through the state’s Natural Heritage Program. A second option would build on a past county monitoring project for old-growth wetlands called fens and create a market to protect sensitive wetland areas. Goodtimes and Fankhauser have also spoken about extending a sage-grouse market program to include Gunnison sage-grouse. The distinct and smaller grouse species also received a “warranted but precluded” ruling from the government this past September, so any market initiatives would, again, rely on voluntary actions.

Over the next year, Goodtimes expects to develop at least one of the ideas into a pilot program. Along the way, the working group will have to identify landowners willing to participate and settle on the ecosystem services that could drive a credit program.

“I’ve always been upset that we don’t get a real accounting of what natural resources are really worth in the economy,” Goodtimes says. “I want this to be a model so other people can see if it works.”

Goodtimes isn’t shy about saying “if” when talking about whether market-based initiatives will work. As a self-proclaimed environmentalist and a member of the Green Party, he has issues with every aspect of the economic valuation of the environment. “But,” he says, “I see it as a great tool for society. If it doesn’t work, the pilot will show that.”

Beyond any philosophical discussion over defining nature in economic terms, payments for ecosystem services have raised some harsh criticism. One of the leading arguments aimed at PES programs and environmental markets is that despite the economic and environmental objectives, the programs facilitate development without actually achieving biodiversity conservation.

Critics argue that ecosystem services make for complicated commodities that are difficult to measure. Programs that aim for “no net loss” of wetlands or wildlife habitat might look good on paper, but can still fail to positively impact species populations or water quality measures.

It’ll be interesting to see how many of these market projects get off the ground, and whether they can deliver on their prospects: to improve conservation on private lands and make it pay for landowners, who are otherwise struggling to preserve family ag lands. One aspect I didn’t dive too deeply into during the story, but hope to explore soon is whether Wall Street’s interest in ecosystem services and markets can boost the efforts, or maybe just turn them into the next investment bubble.

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