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Forested watersheds of the southern United States provide numerous services to the region. At no cost, they purify water, control flooding and erosion, and provide places for people to relax and have fun. Yet despite their value, many watersheds are under threat from development and poor land management.

“Payments for Watershed Services” (PWS) programs are one strategy to keep watersheds healthy. Through a PWS program, landowners receive financial incentives to conserve, sustainably manage, and/or restore watersheds to yield the kinds of benefits described above.

Using markets to protect and restore ecosystems – and the many services they provide – is gradually becoming a reality. Market-based systems have already protected hundreds of thousands of acres of land while still meeting human economic and development needs. They can help ensure that environmental benefits, from wildlife habitat to water purification, will be preserved for future generations.

But what are the critical elements for success? What progress has been made? What are the innovative ideas that will push these markets forward? The World Resources Institute and the American Forest Foundation recently convened some of the world’s leading experts on ecosystem markets in Madison, Wisconsin to address these questions.

2011 will be an important year for the Chesapeake Bay, not only because scientists are predicting an unusually bad “dead zone” this summer.

Last December, the Environmental Protection Agency (EPA) issued total maximum daily loads (TMDLs) that establish the amount of nutrient and sediment pollution that the Bay and its tidal tributaries can safely receive each year. The TMDLs divide the pollution loads among sources, such as urban areas regulated for stormwater runoff, wastewater treatment plants, and agricultural lands.

Now, responsibility for implementing the TMDLs falls to states in the Bay watershed that have been delegated authority from EPA to run water quality programs. By December 1, 2011, Delaware, Maryland, New York, Pennsylvania, Virginia, and West Virginia will submit plans to EPA that explain how sources within their jurisdiction will meet and maintain the TMDLs.

The December deadline has states reviewing legislation and regulations that could reduce the amount of nutrient and sediment pollution that impairs Bay water bodies.

This piece originally appeared in the India Business Council for Sustainable Development quarterly magazine, Volume 8, Issue 2, in July 2011.

In August of 2010, the Indian electricity company Satluj Jal Vidyut Nigam Ltd (SJVN) lost its source of power in Himachal Pradesh. Deforestation and river alterations upstream of the company’s dam had aggravated erosion in the area. Without the trees, heavy rains washed an unprecedented amount of sediment straight into the water, lowering dam reservoir capacity and power output. The resulting 22 days of closure for the facility left millions of people without power and cost the company upwards of $42 million, or INR. 198 Crore.

Wisconsin is a state blessed with abundant natural beauty and was home to one of America’s first conservationists, Aldo Leopold. Leopold recognized that beyond commodities, nature provides services that sustain our planet – such as clean air, clean water and recreational opportunities – and that these services are worth something. He also recognized the importance of providing incentives that reward proper land management. Leopold’s vision still resonates as the 4th annual Ecosystem Markets Conference takes place this week in Madison, Wisconsin.

Current Use Valuation Programs

Property Tax Incentives for Preserving Local Benefits of Forests

This paper explores current use valuation programs as one tool for conserving and fostering sustainable management of southern U.S. forests under private ownership. The brief identifies key constraints on existing programs and suggests measures that could be implemented to enhance program...


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