Applied ecosystem services in working forests: A direct market valuation

Ecosystem services, or the benefits humans obtain from natural ecosystems, have long been recognized as critical to human health. Efforts have been taken by many to determine the non-market values of these services but few have offered a direct market valuation. Increasing awareness, scarcity, and regulation have fostered transactions, and markets are emerging that can allow for direct valuation and could provide landowners the opportunity to merchandise this natural capital. This paper provides a valuation and comparison, as a case study, of a traditional management scheme, including the marketing of fiber and recreational leases, and an ecosystem services management scheme, including the marketing of fiber, recreational leases, carbon sequestration, watershed services, and biodiversity. The traditional forest management scheme had an estimated present value at three pricing scenarios ranging from “pessimistic” at $538,714.63 to “optimistic” at $868,528.27 for the entire 3,976-acre project area. The ecosystem services management scheme had an estimated present value at three pricing scenarios ranging from “pessimistic” at $621,508.61 to “optimistic” at $1,363,628.13 for the entire 3,976-acre project area. This paper concludes that even in these early stages of ecosystem markets, an ecosystem services management scheme may offer more revenue to landowners than a traditional management scheme.