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					Constructing a Strategy for Marketing Ecological Services from Private Lands:
                            Stacking vs. Bundling
                                        Final Report




                                          May 2009




                Prepared for the USDA, Office of Ecosystem Services and Markets


 Prepared by Todd Jones, Henry DeBey, Steven Williams, Yale School of Forestry & Environmental
                                           Studies
Index

I. INTRODUCTION ................................................................................................................................... 1
II. METHODOLOGY ................................................................................................................................ 1
III. ECOSYSTEM SERVICES MARKETS ............................................................................................. 2
   III.A. WHAT IS IT WITH WHICH WE‟RE CONCERNED? ............................................................................... 2
   III.B. THE NEED FOR ECOSYSTEM SERVICES MARKETS .......................................................................... 2
   III.C. LIMITATIONS TO ECOSYSTEM SERVICES MARKETS ........................................................................ 3
   III.D. STACKING AND BUNDLING ............................................................................................................. 4
IV. STACKING ........................................................................................................................................... 5
   IV.A. ADVANTAGES ................................................................................................................................. 5
   IV.B. DISADVANTAGES OR TRADE-OFFS .................................................................................................. 6
     IV.B.1. Disputed Advantages................................................................................................................ 6
     IV.B.2. Disadvantages .......................................................................................................................... 7
     IV.B.3. Risks ......................................................................................................................................... 8
     IV.B.4. Challenges................................................................................................................................ 8
        IV.B.4.a. Property Rights ................................................................................................................. 8
        IV.B.4.b. Additionality and Baseline ............................................................................................... 8
     IV.B.5. Tradeoffs .................................................................................................................................. 9
   IV.C. CARBON .......................................................................................................................................... 9
   IV.D. WATER .......................................................................................................................................... 10
   IV.E. HOW COULD IT WORK? .................................................................................................................. 11
     IV.E.1. Additionality and Double-dipping.......................................................................................... 11
V. BUNDLING .......................................................................................................................................... 12
   V.A. ADVANTAGES ................................................................................................................................. 12
   V.B. DISADVANTAGES OR TRADE-OFFS ................................................................................................. 13
     V.B.1. Disputed Advantages ............................................................................................................... 13
     V.B.2. Disadvantages ......................................................................................................................... 14
     V.B.3. Challenges ............................................................................................................................... 14
     V.B.4. Tradeoffs.................................................................................................................................. 14
   V.C. WETLANDS ..................................................................................................................................... 15
   V.D. HOW COULD IT WORK? ................................................................................................................... 16
VI. POLICY TARGETS – MANDATORY (COMPENSATORY MITIGATION) AND
VOLUNTARY MARKETS...................................................................................................................... 17
VII. AGGREGATION .............................................................................................................................. 17
VIII. CONCLUSION ................................................................................................................................ 17
VIX. REFERENCES ................................................................................................................................ 19
Final Report                                                                                 Monday, May 4, 2009
Marketing Ecological Services from Private Lands                                                     Yale F&ES

I. Introduction

This project concentrates on ways in which private lands can capture market opportunities for
providing ecological services, the challenges associated with building such markets, and the rules
for guiding the development and institutionalization of such markets from a governmental or
regulatory perspective.

We focus specifically on the subjects of „stacking‟ and „bundling,‟ which are defined more
specifically in section III.D below but which broadly describe two different generalized schemes
or approaches for developing, organizing, and coordinating ecosystem services markets. At
various points in this report, we contextualize this discussion in markets for carbon, water, and
wetlands. We discuss these markets both in terms of potential market opportunities for each, and
in order to glean lessons from past experiences.

We are broadly concerned with the following questions.
 What are the advantages and disadvantages or trade-offs associated with stacking vs.
   bundling?
 What might stacking and bundling look like in terms of achieving conservation of ecosystem
   functionality (ecosystem uplift), profitability, feasibility, affordability, additionality, baseline
   issues, transparency, liquidity, transaction costs, private property issues, liability issues, and
   other policy and regulatory challenges?
 What are the ramifications of each for different participants, including landowners
   (providers), buyers, brokers, speculators, regulators, and others?
 Does this particular piece of market design (stacking vs. bundling) fit into the development
   of ecosystems services markets?

It is the purpose of this project to generate a series of key questions, options, research priorities,
and, where appropriate, operational objectives for the federal government related to the
architecture of ecosystem services markets in general and stacking and bundling approaches in
particular.

II. Methodology

To complete this project, we conducted interviews with expert individuals over the months of
February, March, and April of this year. The results of these interviews make up the majority of
the content of this report. These individuals were found using a „snowball‟ sampling technique
by which interviewees recommend other potential respondents. Respondents included
individuals representing academia, government, and the private sector. Additionally, an effort
was made to represent different market perspectives. Per the request of many, we have kept the
identities of respondents participating in the project anonymous1.

To supplement the information we obtained from interviews, literature reviews were conducted.
Also, we asked all respondents to provide any literature they thought relevant, which was

1
  For inquiries regarding the identities of interviewees or additional information regarding interviewee responses
please contact the co-authors so that we may consult with interviewees before revealing their identities and releasing
their contact information.


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Marketing Ecological Services from Private Lands                                       Yale F&ES

reviewed and incorporated as well. However, what we present in this report is essentially the
aggregation of interview responses, synthesized and organized so to be useful to federal agencies
pursuing the development of markets for ecosystem services.

This report begins with the following section which provides some background on ecosystem
services markets, and some initial and fundamental concerns associated with designing,
implementing, and coordinating them.

Sections IV and V address the advantages and disadvantages of stacking and bundling
respectively. Also included in these sections is a discussion of risks, challenges, and tradeoffs,
as well as subsections on how these challenges could potentially be or have in practice been
managed.

Finally, sections VI and VII briefly address the two overarching issues of policy targets and
aggregation respectively. Though we are not able to provide a great amount of detailed
discussion on these two issues, we felt it was important to articulate their importance within the
broader discussion of ecosystem services market architecture as we localize our discussion on
stacking and bundling systems.

III. Ecosystem Services Markets

  III.A. What is it with which we’re concerned?

The aim of ecosystem services markets is the provision of public benefits through private
behavior. As such, we hope that these markets can increase the pace and effectiveness of
landscape restoration and conservation. Therefore, adjusting or affecting private behavior is the
critical challenge for these markets. Ultimately, ecosystem services markets aim to adjust
private behavior by producing a reward (or payment) for the person or entity that is producing
public benefits (Pers. comm. A 2009):
    “Paying landowners, such as farmers, to conserve their property has been a theme of
    federal farm policy for decades, embodied in programs such as the Conservation Reserve
    Program (CRP) which pays farmers to take land out of production for defined periods to
    enhance conservation values, or the Conservation Security Program (CSP) and
    Environmental Quality Incentives Program (EQIP) which rewards farmers for employing
    better practices on working lands. Farms have long been understood as land units that have
    the capacity to contribute to environmental and cultural values. Only recently has the focus
    turned to expanding the position of private landowners as a source of regulating services
    valuable to surrounding local, regional, and national communities – the problem being how
    to provide landowners the incentive to manage for such services when no market yet exists
    for them” (Ruhl 2008:426).

This report specifically addresses markets to incentivize the protection of ecosystem services on
private lands, as well as offset markets, in which damages to or loss of ecosystem services are
offset on private lands (Pers. comm. D 2009).

  III.B. The Need for Ecosystem Services Markets



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Final Report                                                                   Monday, May 4, 2009
Marketing Ecological Services from Private Lands                                       Yale F&ES

A recent study by Dr. Brian Murray, Duke University, on the lower Mississippi valley identified
three valuable ecosystem services: carbon, nitrogen reduction, and wildlife habitat. Of these, the
highest market value was associated with nitrogen reduction. There is, however, no functioning
market for this in the lower Mississippi valley.

Ultimately, if there is a value associated with an ecosystem service or function, that value needs
to be assumed or taken up somewhere (Pers. comm. D 2009). Quite simply, there are
externalities in the form of damage to or loss of ecosystem services which need to be captured.
And this needs to be done without imposing inequity on the private landowner (Pers. comm. D
2009).

Two positions on this are popular. On the one hand, why should private buyers (those
looking to offset damages) pay for services that they’re currently getting for free? On
the other hand, nature has intrinsic value and its protection shouldn’t be driven solely by
its economic value. Though there’s merit to these arguments, certain respondents have
found that they result in a false choice between public and private benefits or rights
(Pers. comm. D 2009).

We can consider command and control regulatory schemes to protect because of intrinsic value.
As a result, the public gets ecosystem services for free, at the expense of the private landowners
whose rights to profit from their own land are consequently limited. This may be the right thing
to do from the public‟s perspective, but it creates huge inequities by requiring private sacrifice
without any private compensation. If, however, we choose not to put regulatory restrictions on
private land use, in order to maintain equity among landowners, we have externalities leaving the
system (the ecosystem service value), which creates its own inequities as someone or some entity
inevitably assumes that cost. Respondents have found that this cost tends to land on the local
jurisdictions that are required to provide basic services (Pers. comm. D 2009). Effectively then,
this cost gets reflected back in tax burden as local jurisdictions are forced to pay for the next
facility upgrade. When taxes are paying for the loss of ecosystem services (that is, paying to
compensate for or correct the conditions created by the loss), many observe that it is typically the
poorer segments of the population that bear a disproportionate burden. As such, we are forced to
choose between adequately protecting public interest at the cost of private individuals and
adequately protecting private interests at the expense of the public interest.

However, advocates of ecosystem services markets have argued that by compensating private
individuals for providing ecosystem services on their property, we may escape this false choice.
Some respondents have noted the variety of contexts in which we recognize the public and
private benefits as well as the public costs that result from property development. System
development charges for a hard infrastructure are one example, which account for the costs
associated with the development of additional social infrastructure to serve new hard
infrastructure. We do not, however, have system development charges for what one respondent
called „green infrastructure.‟ “If we recognize this cost in one context,” he argued, “why not in
the other” (Pers. comm. D 2009)?

  III.C. Limitations to Ecosystem Services Markets




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Final Report                                                                   Monday, May 4, 2009
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Many respondents noted a fundamental problem with using market mechanisms to provide vital
environmental services or to meet important social needs. Basic human needs and rights (like
ecosystem services), they argue, are not suited to markets. They explain that it is difficult to
value them highly enough, and improper valuation of ecological services can be a fundamental
flaw in ecosystem services markets (Pers. comm. H 2009). Compensatory mitigation (requiring
that damage or destruction of ecosystem services be mitigated or replaced), for example, as one
respondent noted, “is based on the assumption that we can reproduce ecosystem services” (Pers.
comm. B 2009).

On a more practical level, ecosystem services markets appear to present a problem in terms of
defining weights and measures. Most respondents agreed that these commodities, if that‟s how
they‟re treated, are inherently unlike corn or other commodities (Pers. comm. H 2009).
Establishing the scope and conditions of ecosystem markets is clearly a challenge. As one
respondent asked, “Are we seeking completely open trading of a clearly defined global
commodity, with deliverable grades, at a trading floor where all information converges to one
place, where every transaction is recorded and there are lots of buyers and lots of sellers and an
enforcer or verifier that can address disputes between the two” (Pers. comm. M 2009)? He
concluded that such a market may not be suited to or possible with ecosystem services, and to the
extent that markets deviate substantially from this model, he hypothesized that other approaches
to managing these services may produce better ecological outcomes (Pers. comm. M 2009).

  III.D. Stacking and Bundling

With these potentials, concerns, and limitations in mind, we begin our discussion of stacking and
bundling approaches to ecosystem services markets.

„Stacking,‟ in the context of this report, refers to managing a portfolio of ecosystem services on
the land. Different commodities and services (corn, carbon, water, etc.) are „stacked‟ to later be
pulled out and sold by the provider or landowner. Stacking, therefore, values each service
provided to or withheld from the general public. It offers the potential for multiple revenue
streams to landowners, and means that the landowner has an obligation as a provider to multiple
purchasers. Multiple revenue streams may mean more total revenue to the landowner, which
may help keep the land out of other land uses that traditionally yield higher rents. Stacking itself
can be disaggregated into „vertical‟ and „horizontal‟ stacking, where vertical stacking involves
managing for several services simultaneously on the same area of land, and horizontal stacking
involves using different land areas for different services, or „growing‟ different services in
different areas of a property.

On the other hand, how do we separate ecosystem services and functions from others, especially
those that are necessary and perhaps prior to the services we‟d like to buy and sell? The
argument could be made that ecological services are as valuable as they are because they are
integrated into natural systems. „Bundling‟ may better recognize this. „Bundling‟ means
ecosystem services are „bundled‟ together to be bought and sold in the market as a single
commodity/service. Once „bundled,‟ individual services cannot be separated out, offering a
single revenue stream to landowners. This may allow a peanut farmer, for example, who is
perhaps concerned with water, air, and peanuts, to change his/her peanut-growing practices in



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Final Report                                                                 Monday, May 4, 2009
Marketing Ecological Services from Private Lands                                     Yale F&ES

order to enhance water and air in a quantifiable way without specifically focusing on growing
and delivering water quality.

Though this project was unable to discover a body of literature which specifically pertains to
stacking and bundling approaches with respect to ecosystem services markets, scholars like
Dennis Hirsch have indirectly commented on the difference between stacked and bundled
markets. As noted by Ruhl and Salzman (2007), “Hirsch distinguishes between regulatory
markets that trade one ecosystem service for another, such as the wetland mitigation banking
program, and regulatory markets that trade between technological services and ecosystem
services, such as the carbon sequestration trading program” (Ruhl and Salzman 2007:171).

Nevertheless, single commodity markets (carbon for example) and bundled markets (wetlands
for example) are not designed with each other in mind. They‟re designed rather on an ad hoc
basis, which makes for an awkward stacking (of commodities) vs. bundling dilemma. Hirsch
argues that since these markets are set up differently, they subsequently demand different
analytical frameworks (Ruhl and Salzman 2007). We explore the implications of these
differences here.

However, noting that Hirsch‟s „dilemma‟ stems from a lack of attention to one approach by the
other, the USDA might consider first and foremost how to design ecosystem services markets in
the US so that they link and fit together (Pers. comm. C 2009), in which case „stacking‟ and
„bundling‟ may become irrelevant as broader approaches to market design. In any case, some
respondents have noted, any bundled ecosystem services market will need to blend with other
commodity markets; and stacked markets too will need to fit together for obvious reasons (Pers.
comm. C 2009).

IV. Stacking

  IV.A. Advantages

While distinguishing and disentangling ecosystem services is clearly challenging, stacking is
considered a valuable approach for numerous reasons.

First, stacking may be suited to the current marketplace (Pers. comm. L 2009). In the context of
regulatory markets, buyers are may only be interested in specific ecosystem services as a result
of demand created through government regulation. One respondent offered this example, “a
municipal water treatment plant only needs to offset its effluents that were regulated by a TMDL,
not its carbon footprint, or any altercations to biodiversity. Each of these credits are going to
carry different values because of the spatial scale of the issue (carbon - national/global;
biodiversity/habitat for a given species - eco-region; water quality - watershed)” (Pers. comm. K
2009).

In other words, there are buyers for different services, and stacking appears to accommodate this.
Creating different markets would ostensibly recognize the multiple scales at which services
operate, treat the demands (or willingnesses to pay) for different services as separate, and
therefore more accurately reflect demands for ecosystem services (Pers. comm. C 2009).



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Final Report                                                                    Monday, May 4, 2009
Marketing Ecological Services from Private Lands                                        Yale F&ES


It is also perceived that stacking may address barriers to ecosystem recovery built into the
current regulatory process, which divides the landscape into regulated and non-regulated
elements. “By allowing stacking,” says one respondent, “we‟re potentially allowing more
opportunity for providers to find potential markets for non-directly-regulated benefits coming off
the landscape” (Pers. comm. D 2009).

Because it involves valuing, measuring, and monitoring different ecosystem services separately,
many respondents commented that stacking may be more efficient (compared with bundling); it
may measure ecological benefit or failure more accurately, and it may help to tease out where
we‟re creating additionality and where we‟re not (Pers. comm. H 2009).

Stacking also has the appeal of multiple revenue streams to the landowner or provider. Many
respondents felt that if the social value of the ecosystem is in fact larger than the total value that
landowners see, then the landowner should get paid enough to compete with the highest paying
alternative (Pers. comm. E 2009). Stacking recognizes that forestland provides multiple services,
and allows the landowner to see revenue associated with all of them. Since stacking allows for
the disaggregation of services and revenues for each service, many respondents have estimated
that under a stacking scheme the landowner may see a larger total payment (as compared with
revenue from a single ecosystem services credit) (Pers. comm. E 2009).

One respondent noted that stacking may provide the potential for smaller markets to become
more viable because they would no longer have to stand alone; that is, they would not have to
exist as a separate creation (Pers. comm. D 2009). He offered water quality trading markets as an
example: “Water quality trading markets are forced to be small. They involve very small service
areas and a very limited participation pool. Even though there is still a limited potential market
for water quality benefits, with stacking these benefits represent an additional opportunity on top
of other credit types that could be generated off of the property” (Pers. comm. D 2009).

Finally, many perceived that stacking allows for increased market flexibility. If we expect that
over time those which represent the most viable markets are going to change based on changes in
regulation, need, policy direction, among other things, then “stacking may add an element of
flexibility in terms of how we certify restoration activities and what we certifying them for, so
that the provider has a more diverse portfolio” (Pers. comm. D 2009).

  IV.B. Disadvantages or Trade-offs

    IV.B.1. Disputed Advantages

Critics of stacking have compared it to “selling an automobile at a parts store,” and “a doctor
who is concerned only with the gallbladder” (Pers. comm. A 2009). Ecosystems by their very
nature, they argue, are complex and interrelated organisms. Therefore, how can we separate one
element out from the rest, and isn‟t it presumptuous to do so (Pers. comm. A 2009)?

When it comes to compensatory mitigation, we should ostensibly be offsetting for what was lost
or damaged. With wetlands, for example, this means offsetting for the whole ecosystem, not just



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Final Report                                                                  Monday, May 4, 2009
Marketing Ecological Services from Private Lands                                      Yale F&ES

selected functions it provides. As a result, stacking in wetlands mitigation is not allowed. The
404 Program (Section 404 of the Clean Water Act) has a “no net loss” requirement, which means
no net loss of acres and functions. Replacement of wetlands means replacement of all aquatic
resource functions; they cannot be unbundled. Not only the regulators working on Section 404,
but also the EPA, in a recent workshop with the Environmental Law Institute on water quality
trading, has determined that stacking would not serve the purpose of compensatory mitigation
(Pers. comm. B 2009).

Several respondents echoed the concerns of one that asked, “Why should I pay for services that
I‟m getting for free” (Pers. comm. J 2009)? These respondents worry that there is a potential
disincentive to pay for services that will come with other services. They see this as a major
problem for stacking.

Additionally, in contrast to the argument that stacking may provide a means for developing new,
untapped ecosystem services markets, many worry that stacking could potentially value only
regulated resources and ignore unregulated values, therefore failing to challenge the current
regulatory framework (Pers. comm. L 2009).

Finally, with respect to the asserted potential for multiple revenue streams to the landowner, the
sum of which may better compete with developed land uses, its critics are quick to point out that
stacking doesn‟t necessarily carry more potential to compete with alternative land uses which
yield higher rents. To the extent that it does yield more total revenue to the landowner, they
argue, this total is still unlikely to compete with developed uses, where they are physically and
economically possible. According to one respondent, “Ecosystem service activities and markets
are ultimately on the margin. Whatever ecosystem services will offer a landowner (no matter if
they‟re bundled or stacked), we can anticipate that it will be so far from what large developers
will be willing to pay, that it really becomes a zoning or land use regulation problem. For a
company like Wal-Mart, for example, the value of land is a minor line item on their list. We can
expect them to pay several times what any ecosystem services market scheme can generate in
order to get the land enrolled” (Pers. comm. A 2009). In other words, they argue that it is not
likely that we can devise an ecosystem services market that can tax for the services provided at a
competitive rate with those land uses (Pers. comm. A 2009).

    IV.B.2. Disadvantages

Among the disadvantages associated with stacking, its critics note that landowners trying to
optimize their revenue through vertical stacking may potentially be left with an “optimization
problem” (Pers. comm. A 2009). As one respondent describes, “we observed a substitution
effect with stacking. A landowner could choose to tradeoff carbon for timber production due to
the higher demand or better value in selling the pulp. Alternatively, the landowner could
tradeoff timber production for a Stream Management Zone if a higher revenue is associated with
water quality trading than with timber. As such, stacking could lead landowners to substitute
internally in their management plans, influencing markets to work against each other” (Pers.
comm. A 2009). In other words, stacking may fundamentally involve optimizing some elements
and therefore suboptimizing others (Pers. comm. C 2009).




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Final Report                                                                  Monday, May 4, 2009
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Another issue associated with optimization and sub-optimization is the apparent inherent
exclusion of auxiliary, essential ecosystem services under a stacking scheme: “If the only thing a
landowner is paid for in wetlands mitigation is water quality, for example, they may be inclined
to ignore flood attenuation, precipitation retention, nutrient cycling, migratory birds, among
other factors. These ecosystem services may not be completely excluded or unavailable, but they
will likely not be priorities and therefore may not perform to their capacity” (Pers. comm. A
2009).

Finally, in addition to competition between markets at any given moment, vertical stacking also
potentially involves competition between markets over time: “We want some of these services to
be long-term; carbon sequestration is one example. If the landowner makes a long-term
commitment to a particular service alternative, s/he needs to incorporate the opportunity costs
associated with that decision. As a result, s/he runs up the price, uses a discount, and includes
that in opportunity cost. Though we tend to roll that into transaction cost, it‟s really a separate
cost. So, stacking starts to look like schizophrenia” (Pers. comm. A 2009).

    IV.B.3. Risks

Respondents noted two main risks associated with a stacking scheme. First, that only one market
might develop, meaning all the other credits that have been enabled can‟t get sold (Pers. comm.
F 2009). And second, as a more extreme consequence of the optimization-sub-optimization
problem described earlier, that stacking may actually offer perverse incentives for other services
that are not valued or undervalued. (Pers. comm. J 2009).

    IV.B.4. Challenges

One key challenge identified by respondents associated with stacking is the potential for greater
administrative costs associated with generation of the credits, as the credit measurement system
and the process for site evaluation become more sensitive and precise (Pers. comm. D 2009).

      IV.B.4.a. Property Rights

Another reported challenge involves establishing property rights for these services. According to
one respondent “Ultimately, landowners want to be able to demonstrate that they own the carbon
rights to their forestlands, for example. This involves essentially creating a suite of property
rights around water, carbon, etc., that is, making carbon and water ownable and
tradable/monitizable” (Pers. comm. G 2009). Respondents have pointed to existing working
groups on property rights for flora and fauna that are analogous to intellectual property rights in
that they represent „severable‟ property rights as potentially informative (Pers. comm. G 2009).

      IV.B.4.b. Additionality and Baseline

Perhaps the most common challenge cited by respondents associated with stacking was
managing the issue of additionality (Pers. comm. F 2009). This and the related problem of
„double-dipping,‟ along with potential solutions, are discussed in Section IV.E below.




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Final Report                                                                  Monday, May 4, 2009
Marketing Ecological Services from Private Lands                                      Yale F&ES

Since ecosystem services markets are often offsetting or mitigating impacts, determining
baseline, which will determine what is additional and therefore creditable, is considered crucial
to these markets achieving significant ecological results. One respondent used carbon markets to
explain, “For instance, in the carbon market, a regulatory baseline could be used, but this could
result in inequity due to uneven regulatory schemes across the country regarding forest practices.
Alternatively, the baseline could be based on an averaged indicator (forest inventory analysis,
cutting rates in a region), but this could potentially reward bad behavior (cutting forests down to
generate more credits, for example)” (Pers. comm. L 2009).

    IV.B.5. Tradeoffs

While a stacking scheme in which landowners see multiple revenue streams may represent the
best-case scenario for the provider or landowner (and perhaps for conservation in general in
terms of protecting land from development), respondents have noted that this does not
necessarily represent the best-case scenario for the buyer, who could otherwise pay less for the
same number of services by only paying for one, or by paying for a bundle of services which
costs less than the sum of its parts (Pers. comm. E 2009). This again reflects the potential
disincentive to pay for services that will come with other services, discussed in section IV.B.1
above.

  IV.C. Carbon

We address carbon markets specifically here as it is widely perceived that “Carbon is really the
driving cart until other markets for ecosystem services develop” (Murray 2009). As Ruhl and
Salzman (2007) point out, an entire „cottage industry‟ has developed around carbon sequestration
as a service.

We should, however, examine what happens to other ecosystem services when landowners
manage for carbon credits alone. As Brian Murray reflected, “Are we getting other good
ecosystem services bundled with carbon, or are does this result in challenges to other ecosystem
services” (Murray 2009)?

Professor Murray recently conducted a study of the maximum economic potential of a carbon
market in the US. It showed a huge potential shift in land use from agriculture to forests at
around $50/ton for CO2, which is equivalent to about 100 million acres of additional forest land,
as a maximum. He found that, at low carbon prices (<$15/ton), it‟s usually more profitable to
put land in agriculture for private landowners. Above ~$15/ton, landowners start to convert
agricultural lands to forests. This indicates again that carbon markets should focus on the
interface between agriculture and forestry (Murray 2009).

Considering regulatory carbon markets first, respondents had two main observations. First, they
tend to suffer from a lack of transparency, and second, they tend to create an uneven playing
field for participants, or allow one set of participants to have an advantage in the market. With
respect to the latter, non-compliance participants are perceived to have maximum flexibility;
“they can hedge their own risk, and hoard permits” (Pers. comm. H 2009). According to some




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respondents, this gives non-compliance participants an unfair advantage in the market over
compliance buyers, which manifests itself in the price (Pers. comm. H 2009).

With respect to voluntary carbon markets in the US, most consider them to be generally
ineffective, or if not, at least insufficient. Participants often complain that the rules are too
unclear; there are not a lot of places for creating additionality; there‟s not enough liquidity;
they‟re not big enough; and they‟re too speculative. Others have reflected on the implications of
„growing‟ carbon over long periods of time for liquidity concerns. How long, for example, must
an investment mature before it can be liquidated? This confusion about the rules has led many
respondents to conclude that we may need a mandatory carbon market (Pers. comm. H 2009).

Despite a number of suggestions for how to make carbon markets more profitable in the US, one
of which was to introduce fungibility with international markets, which potentially “introduces
new participants and creates greater scale and efficiency and liquidity” (Pers. comm. H 2009),
many respondents expressed ambivalence toward the prospect of carbon markets leading to real
ecosystem uplift. As one respondent stated, “carbon markets may simply be too reductionistic,
as they fail to capture the true benefits of carbon reduction and sequestration” (Pers. comm. H
2009).

  IV.D. Water

There are two basic types of water markets, those designed to value quantity and those designed
to value quality. We consider both here.

For inspiration and guidance related to water quantity markets, respondents suggested that we
look to Australia, which has reportedly incorporated a „backstop measure‟ into its trading scheme
for water rights, under which “Trading is allowed to happen; but if the baseline deviates, the
government has the right to step in and nationalize permits” (Pers. comm. H 2009). Though
many respondents have questioned whether such a measure would be politically viable in the
US, it has nevertheless been observed to help the market, and the prices appear to adjust for it
(Pers. comm. H 2009).

With respect to water quality markets, we may consider regional water markets in the US.
Because these markets have to be watershed specific, many have noted the need to coordinate
regional water markets in the US (Pers. comm. F 2009). Additionally, of the dozens of water
quality trading markets in the US, “only a small few could be considered active” (Pers. comm. N
2009). As non-point sources are not regulated at all, there‟s a sense that some regulation would
be needed in order for a national market for water quality to work. “For example,” as one
respondent noted “there‟s a huge backlog in the development of TMDLs [total maximum daily
loads, the maximum amount of a pollutant that a body of water can receive while still meeting
water quality standards,] at the EPA” (Pers. comm. N 2009). Traders appear to be struggling
with questions like: what is to be traded, or what‟s an equivalent trade?

Developing trading ratios (which specify how many units of pollutant reduction a source must
purchase to receive credit for one unit of load reduction) appears to be critical in water pollution
because location matters, which may be a challenge for federal rulemaking. As a result, some



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have suggested that “Economically, it may be easier to design an ambient tax as opposed to a
tradable permit policy for water” (Pers. comm. N 2009). Also, we should consider the
effectiveness of alternative programs like the USDA‟s Conservation Reserve Program (CRP), a
land retirement program which began in 1986, and which is very effective but, as some noted
“very expensive:” “It‟s an incentive program, but it‟s not a market” (Pers. comm. N 2009). We
should consider what advantages a market for bundled ecosystem service credits might have over
CRP in terms of protecting ecological effectiveness.

Lant (2008) discusses water markets in New Zealand:
    “Ecosystem service districts, similar to school, fire, and other local service districts, are in their
    infancy and theoretical designs most likely outnumber actual functioning districts (Heal et al. 2001,
    Ruhl et al. 2003, 2007). Nevertheless, cases such as New Zealand, where environmental
    administration was realigned along watershed boundaries, bear careful examination (Pyle et al. 2001).
    To be effective, a generalizable design for ecosystem service districts would do the following:
    -   Develop institutional frameworks that promote a shift from single-purpose resource management
        to more holistic and integrated approaches (Hanna and Slocombe 2007)
    -   Enjoy the type of power and authority (e.g., regulatory, market-based, incentives, reporting and
        information requirements, planning requirements, voluntary) and financing mechanisms (e.g.,
        taxes, fees, bonds) generally associated with governments, but also be capable of establishing
        democratically based legitimacy at local levels.
    -   Build the institutional capacity (i.e., budget, staff, and expertise) to carry out complex scientific,
        economic, and social analyses and take responsibility for making policy and regulatory decisions
        through public, transparent procedures.
    Moreover, the nesting of political authority (federal, state or provincial, regional, local) and
    geographic scale must be coherent. Watershed boundaries are a good candidate for such nesting
    under state or provincial leadership” (Lant 2008:973).

  IV.E. How could it work?

In terms of making stacking work, again many suggested establishing rules for a coordinated
series of markets. One might include, for example, a stipulation in a market for forest carbon
sequestration that says sequestration has to be done by native species or native plant community
(depending on how highly we value sequestration vs. maintaining native plant community). In
other words, an effort must be made to build in rules for each market in order to protect other
ecosystem services and markets, or at least rules which ensure other services aren‟t undermined
(Pers. comm. F 2009). As one respondent articulated, “Stacking [can] contribute to greater
functionality, depending on how the services are valued in conjunction with one another. […] If
vertical stacking values each part in relation to the other, then it can achieve greater ecosystem
uplift” (Pers. comm. L 2009).

    IV.E.1. Additionality and Double-dipping

„Double-dipping‟ involves credits being sold more than once, in a stacking scheme. This
represents a key challenge for ecosystem services markets. One respondent described a potential
solution which involved measuring ecosystem uplift as part of the credit calculation, and then
building an accounting or debit-credit measurement system around measuring performance of
functions on the landscape (Pers. comm. D 2009):


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    “Imagine several overlapping circles in a vendiagram, where each of the circles represents an amount
    of uplift provided within a specific regulatory context. One might be water quality benefits; one
    might be wetland benefits; one might be a species credit, etc. For each benefit one identifies markets
    where credits for those benefits might potentially be sold. If we look at all of the circles together, the
    outside edge (traced without moving into any circle) defines the total amount of ecosystem benefit or
    uplift that‟s been provided from these services. We should notice that this may not be equal to the
    actual total amount of ecosystem benefit provided by the site. Within the wetland circle, for example,
    a subset of functions will also be found in bio-habitat type. To protect against double-dipping, one
    could structure accounting for the debit-credit sales such that for every transaction we track both the
    total ecosystem debit and credit and the specific regulatory debit and credit. Since we‟re already
    gathering one data set and feeding it as indicators into the performance of those functions, it may be
    relatively simple to then ask the database about both a subset and the total, which can be done
    simultaneously, without additional effort. As the transaction occurs, we then know what the total
    ecosystem uplift is for the site, which represents the limit for the landowner in terms of selling credits
    off that site. The landowner also can‟t sell credits beyond the total for any one circle (service).
    Within the wetland context, for example, a landowner can‟t sell more than the circle of wetland
    benefit that was calculated. As long as we put those restrictions on each of the markets and track
    overall ecosystem uplift, we know when credits can no longer be sold. In this case, the site may still
    have some wildlife or some water quality credits left, for example, but since those are credits that
    existed in an area of overlap, the landowner cannot sell them. In this way, such a stacking scheme
    might be seen to increased the flexibility with which credits can be sold without increase the amount
    of those credits available from a site” (Pers. comm. D 2009).

V. Bundling

  V.A. Advantages

A bundling scheme potentially incorporates the value of the entire natural system, a value that
some respondents estimate may be greater than the sum of stacked parts (Pers. comm. J 2009).
That is, “bundling incorporates both regulated and unregulated services. For this reason,
bundling may make more sense from an ecological functionality standpoint” (Pers. comm. H
2009). Conceptually, bundling appeared to respondents to be more consistent with an „ecosystem
approach‟ (approaching the ecosystem as a whole) and efforts to maintain overall ecosystem
functionality. As one respondent noted, “we want to encourage people to think of the ecosystem
as a whole, in which case bundling makes sense” (Pers. comm. C 2009).

It was observed that bundling may also be more consistent with how landowners tend to manage
their property anyway. As one responded noted, “landowners tend to manage their property as a
mosaic of functions and commodities, all of which support the rest, regardless of the market. In
order to have recreation, we don‟t want clear cuts, for example, so we implement a longer
rotation overall, which means foregoing revenue from timber production because we‟re keeping
the paper on the stump. The point is: landowners with multiple management objectives lay down
cohesive management plans. This sounds like bundling” (Pers. comm. A 2009).

Bundling acknowledges that individual services cannot be disengaged from the natural system
from which they spring: “In wetlands mitigation, we have hydro-geomorphic models, which
essentially split up functional capacities. […] All of these functional capacities have value, and
although we can measure them separately, we can‟t take them apart” (Pers. comm. A 2009).


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Advocates argue that bundling avoids the “hair-splitting” observed with stacking: “We are no
longer asking: what is it I‟m going to trade? Do you trade within the line items” (Pers. comm. A
2009)?

Finally, many respondents observed that integrating services may help integrate efforts across
jurisdictions (agencies, organizations, state lines, etc.), allowing conservation to be approached
in a more holistic manner and more efficiently (Pers. comm. L 2009).

  V.B. Disadvantages or Trade-offs

    V.B.1. Disputed Advantages

Critics of bundling challenge whether it indeed avoids the optimization problem that its
advocates have associated with stacking: “This can be seen to happen under both stacking and
bundling schemes. In fact, there may be a greater possibility of it happening if we were to
require bundling. […] Until we can identify a market demand driver that‟s going to bring
bundled ecosystem credits up to the value of regulated markets, a market for bundled credits may
not result in ecosystem protection. Stacking at least allows for areas that are currently uncovered
in the system to be covered” (Pers. comm. D 2009).

Some respondents went as far as to argue that stacking actually offers more of an „ecosystem
approach:‟ “Since there is less of a buyer for a bundled credit, and since markets for bundled
ecosystem services credits are less likely to compete with carbon credits, or wetland credits, etc.,
it may be more cost effective for a property owner to choose a single service, wetlands for
example, and manage for that. In this way, bundling actually creates a disincentive to an
ecosystem approach. […] Are people going to choose a general ecosystem services market that
doesn‟t exist, and, when it does, that may not be able to demand the same price level as the more
established markets? Or will they simply make a choice to manage for wetlands, for example?
As long as the landowner can get more per acre for a single service credit than a bundled
ecosystem services credit, s/he will choose the single service. […] Unless bundling can compete
with other mandatory markets, it won‟t incentivize ecosystem management.” (Pers. comm. D
2009). In other words, the conceptual fit between bundling and an „ecosystem approach‟ may
not be expressed in reality. We should think about what incentive signals bundling really sends
into the market.

Along the same lines, respondents noted that with respect to the perceived advantage of bundling
in terms of capturing all services coming off the landscape, there may actually be disincentives
for certain services under a bundling scheme as well. While bundling means that all services
coming off the property are bundled together, potentially avoiding inappropriate disconnection of
services from one another and consequently devaluing certain services from others as services
are forced to compete with each other, it can be argued that since it may not be possible to
measure every service, those that are not directly measured are at risk of being lost. As one
respondent noted, “Verifiers in the wetlands markets, for example, surely don‟t report on change
in salamander population, for example?” (Pers. comm. M 2009). One could make the argument
that, with bundling, whatever you don‟t measure as a part of ecosystem functionality is just as
devalued as if it was a non-valued service in a stacking scheme.



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Advocates of stacking also responded that even as stacking means measuring individual
functions performed on a landscape, this may not mean that these relationships are being
completely unraveled: “Services are naturally bundled together, and stacking doesn‟t necessarily
mean unraveling ecological functionality and thereby subverting it. We may find that increasing
the performance of a given function may positively impact other functions as well” (Pers. comm.
D 2009).

Others have made the case that those who want all services coming off a property bundled
together can get exactly that by simply buying the land: “The Nature Conservancy does this, for
example. We have conservation easements” (Pers. comm. J 2009).

    V.B.2. Disadvantages

However, the chief argument reported against bundling is that it is difficult to locate a buyer for a
bundled ecosystem services credit: “Nobody wants everything, except maybe for the
government. Different buyers want different services. Not allowing for stacking may simply
force buyers to buy something they don‟t want. […] If you‟re not going to let people unbundle,
you‟re forcing them to waste money” (Pers. comm. F 2009). As another respondent reflected,
“A company that has to comply with carbon legislation, an oil and gas producer for example,
wants to deal with its emissions. If the same company wants to build an oil and gas pipeline
that‟s going to affect wetlands, it‟ll deal with it then. Only a company that wants to do both may
be considered a buyer for a bundled credit” (Pers. comm. J 2009).

    V.B.3. Challenges

Critics of bundling also argue that credit measurement would be unsystematic and unstructured:
“The commodities are so different and there‟s so many critical elements that are all interacting in
complex ways that there can‟t be any consistent way to do credit measurement” (Pers. comm. D
2009). For the same reasons, they anticipate that it would be hard for the market to value a
bundled credit: “We can anticipate that values and accounting will be incredibly difficult under a
bundled system. How do you determine how two identically-sized pieces of land, that have
different plant communities on them, will be valued in a bundled market? We would ostensibly
need conversions for carbon to ecosystem services, etc.” (Pers. comm. J 2009). The rules for a
bundling scheme may have to make important assumptions about how to value very different
pieces of land (Pers. comm. J 2009).

Similarly, these respondents speculate that bundling may make regulators uncomfortable because
“there may not be the specificity there that they need to meet requirements” (Pers. comm. L
2009).

    V.B.4. Tradeoffs

Again, it may be difficult to write ecological performance standards for a bundled ecosystem
services market and that may drive up the cost. “But,” as some proponents argue, “if we‟re
allowing damages through 404 or the ESA program for example, destruction and loss of



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ecosystem services, we can consider that to be the true cost of recollecting them” (Pers. comm. B
2009).

  V.C. Wetlands

Wetlands markets appear to be the closest examples we have to a bundled market. And these are
compensatory mitigation markets, meaning if a wetland is filled, mitigation must be provided.
They are driven by the Clean Water Fund, which states that there shall be “no net loss of
wetlands.” This anchors the market. Wetlands markets also stipulate that offsets must be in the
same area (as defined) as the damages; so, they are local markets. This grounds the markets
spatially: “Local markets like wetlands work in the sense that landowners get paid more for
greater ecological benefit (uplift and additionality). Since mitigation has to happen locally, the
price of land for mitigation goes up, and the returns on wetlands can be substantial” (Pers.
comm. H 2009).

Wetlands markets are also often noted to address the issue of permanence by stipulating deed
restrictions, by essentially creating “encumbered land” (Pers. comm. H 2009).

The Army Corps of Engineers acts as the assessor in wetlands markets; they work with the
landowner to figure out how much mitigation is needed; they review and verify mitigation
projects; and they help the landowner to develop success criteria (Pers. comm. B 2009). In terms
of assessment and credit measurement, there are rules for how much mitigation (rehabilitation or
creation) must be done in order to offset a certain amount of damage or loss. The landowner is
only compelled to do as much as the Corps requires him/her to. There is also a process for
monitoring (Pers. comm. B 2009).

Those who work with these markets have observed that, “Having some measurement or ability to
measure ecosystem services that are lost, and using that same yardstick to measure what‟s
replaced is critical to wetlands”, as is they argue “building in some buffer” (Pers. comm. B
2009). The 404 Program has its “no net loss” requirement, and most of the time the ratios of
replacement to loss are set at a minimum of 2 to 1. This buffer is critical to guard against
temporal loss. Additionally, “That ratio may go up if the wetland type in question is particularly
difficult to replace, or if there‟s a low success rate. Restoring vernal pools has a low success
rate, for example. This will drive that ratio up” (Pers. comm. B 2009).

Respondents have also noted, however, a discrepancy between the picture of wetlands mitigation
banking and compensatory mitigation as seen through an economic lens and that which is seen
through an ecological lens: “it is important not to confuse market success with ecological
success” (Pers. comm. B 2009). Whereas such an economic lens may reveal “profitable markets
with a lot of activity,” these respondents urge that “In reality, maintenance of wetlands in terms
of both acres and functions is seriously in question” (Pers. comm. B 2009). They‟ve reported
that, according to the most recent Army Corps statistics available (which are apparently FY03
statistics) on the number of acres of permanent wetland losses and the amount of compensatory
mitigation that has been required, “although the reported ratio of loss to mitigation may
demonstrate no net loss, the figure of compensatory mitigation required is just that amount which
was required; it shows nothing about how much of that which was required was carried out, and



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how much of that which was carried out was ecologically effective. Numerous studies have
pointed to this gap in effectiveness” (Pers. comm. B 2009).

Additionally, while wetland mitigation banks are held to performance standards (success criteria
included in the banking agreement), respondents have reported that recent research has
demonstrated that very often banks don‟t meet those standards, and furthermore, even for those
that do, that these permit successes are not yielding jurisdictional wetlands (Pers. comm. B
2009). Therefore, with wetlands, there appears to be a gap between regulatory compliance and
ecological success. This places some focus on the importance of writing good ecological
performance standards (as opposed to only administrative performance standards) (Pers. comm.
B 2009).

  V.D. How could it work?

Although preservation is not allowed in the 404 Program, some respondents have suggested that
it might be ecologically wise to establish that for every wetland acre impacted or every acre of
wetland restored, a certain amount of natural wetland preservation is required in addition:
“Without this insurance, it appears we‟re simply replacing natural wetlands with created and
restored wetlands” (Pers. comm. B 2009). Again, this might suggest that there is some potential
for coordinating different markets in order to make sure that each market helps protect other
ecological service markets. Would it be possible, for example, to require not only 2 to 1
mitigation of wetlands, but also some carbon offsets or local water or habitat offsets as a part of
mitigation?

There is some indication that federal agencies in the „404 world‟ are growing more amenable to
unbundling. There‟s always been a very strong preference that compensation for wetlands in
particular be “onsite” and “in kind,” both to address issues of function and value. For example,
if a wetland is filled in an urban area where it‟s providing some control functions and access to
wildlife viewing for an urban population, it is important that those services don‟t migrate too far
across the landscape from the original damages when they‟re offset or replaced under
compensatory mitigation. According to some respondents, “There have been some studies
suggesting that precisely this is happening under that wetlands mitigation banking. Wetlands
mitigation banking is promoting the mitigation of these wetlands across landscape to more rural
areas” (Pers. comm. B 2009). However, more recently, respondents report, “the agencies have
come to the conclusion that, in certain cases, this may not be such a bad thing. For example, just
because a low-quality wetland in an urban area was filled, this doesn‟t mean that it‟s necessarily
best to replace it with a low-quality wetland in an urban area. Ostensibly, it should be replaced
with something more true to its kind. Federal agencies understand wildlife functions in a more
rural area may be greater than those in an urban area” (Pers. comm. B 2009). As a result, new
regulations may be far more open to unbundling, so that some functions, like flood control for
instance, will be maintained locally, while other functions, like wildlife, can be addressed offsite
(Pers. comm. B 2009).

Finally, the Willamette Partnership is doing a credit analysis relevant to bundling. In fact, the
subject of their work resembles a mixture of bundling and horizontal stacking. In any case, the
Partnership is reportedly currently putting together ecosystem credits that have been described by



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respondents as „inclusive,‟ bundling a number of services together: “They‟re developing tools
following a well-developed philosophy for inclusive ecosystem credits” (Pers. comm. A 2009).

VI. Policy Targets – Mandatory (compensatory mitigation) and Voluntary markets

One of the first questions that emerges from the discussion generated by this report is: are we
concerned with mandatory or voluntary markets? As the preceding sections of this report have
shows, there‟s reason to believe that for either stacking or bundling a policy target would be
needed to ground the market: “Ecosystem services markets may need a regulatory driver, a cap,
and a standard for measuring what‟s lost and what‟s replaced” (Pers. comm. B 2009). If this is
true, we should consider where these policy targets might come from.

Nevertheless, voluntary markets, are considered by most we interviewed to retain the potential
for picking up some ecosystem services off the landscape (Pers. comm. D 2009). Additionally,
as some respondents have noted that the local jurisdictions are bearing the cost for the loss of
ecosystem services, “arguably the best place to pick up this greater required regulatory market
would be at the local land use level, in turn potentially providing a platform for sustainability
planning at a regional level” (Pers. comm. D 2009).

VII. Aggregation

With respect to bringing small landowners in, many have noted that an accreditation process for
banks, pools, and aggregation vehicles may be needed: “Small landowners should go through an
aggregator, a carbon pooling vehicle for example, in which they sign a contract, and accept
contractual obligations, with a pool manager, who will then act in the market on their behalf”
(Pers. comm. G 2009). Most respondents seemed to agree that the market can be expected
decide what level of aggregation is valuable, and that people will aggregate naturally (Pers.
comm. G 2009).

VIII. Conclusion

The project was designed to present options with respect to stacking and bundling schemes for
ecosystem services markets, and to generate key questions and research priorities relevant to the
development of these markets. In the preceding sections, we‟ve attempted to outline the
perceived advantages and disadvantages associated with stacking and bundling, in terms of
achieving conservation of ecosystem functionality, gaining and maintaining profitability, and
overcoming other policy and regulatory challenges.

We‟ve provided an abridged summary of our findings, in the form of key questions and
concerns, below:

   Are we concerned with mandatory or voluntary markets? Both stacking and bundling may
    require a policy target in order to be effective. In fact, all ecosystem services markets may
    require a regulatory driver. Where, in this case, would such policy targets come from, and
    what would they look like?




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   It is not likely that we can devise an ecosystem services market that can tax for the services
    provided at a competitive rate with developed land uses.
   Both stacking and bundling schemes may fundamentally involve optimizing some landscape
    elements or ecosystem services/functions and therefore suboptimizing others.
   Transparency is critical to the success of ecosystem services markets, and it does not appear
    that one scheme (stacking or bundling) is more inherently transparent than the other. In
    either case, it is important that stakeholders and participants can easily access and understand
    the information associated with assessing impacts, generating credits and tracking progress.
   Neither system (stacking or bundling) appears to be inherently better at incorporating and
    giving value to unregulated services.

Concerns and questions associated with stacking:
 There may be a potential disincentive to pay for services that will come with other services.
 What is to be traded, and what‟s an equivalent trade?
 In addition to competition between markets at any given moment, stacking potentially
   involves competition between markets over time.
 How can we ensure that all markets under a stacking scheme develop evenly and as
   originally intended?
 Additionality remains a challenge.

Carbon
 Voluntary carbon markets appear to be insufficient, and mandatory carbon markets suffer
   from a lack of transparency and an uneven playing field for participants.

Water
 Developing trading ratios appears to be critical in water pollution because location matters,
  which may be a challenge for federal rulemaking.

Concerns and questions associated with bundling:
 Unless bundling can compete with other mandatory markets, it likely won‟t incentivize
   ecosystem management.
 What incentive signals would a bundling scheme really send into the market? The conceptual
   fit between bundling and an „ecosystem approach‟ may not be expressed in reality.
 Who and where is the buyer for a bundled ecosystem services credit?
 Can we develop a consistent way to do credit measurement with bundling?
 How do we write ecological performance standards for a bundled ecosystem services
   market?

Wetlands
 With wetlands markets, there appears to be an observable gap between regulatory
  compliance and ecological success, which again places some focus on the importance of
  good ecological performance standards.
 Can preservation be incorporated into a bundled ecosystem services market?




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In general, we were unable to offer a conclusive answer to whether or not the „stacking vs.
bundling‟ piece of market design fits into the development of ecosystems services markets.
Neither approach appears to be a panacea for ecosystem services markets, and to a certain extent
considering one‟s options in terms of stacking and bundling may not allow for the most
flexibility or innovation in terms of ecosystem services market design.

VIX. References

Interviewee A. March 10, 2009, personal communication, telephone conversation.
Interviewee B. March 13, 2009, personal communication, telephone conversation.
Interviewee C. March 17, 2009, personal communication, telephone conversation.
Interviewee D. March 13, 2009, personal communication, telephone conversation.
Interviewee E. February 18, 2009, personal communication, New Haven, CT.
Interviewee F. March 5, 2009, personal communication, New Haven, CT.
Interviewee G. March 4, 2009, personal communication, telephone conversation.
Interviewee H. March 3, 2009, personal communication, New Haven, CT.
Interviewee J. March 9, 2009, personal communication, New Haven, CT.
Interviewee K. March 30, 2009, personal communication, electronic correspondence.
Interviewee L. March 13, 2009, personal communication, electronic correspondence.
Interviewee M. April 2, 2009, personal communication, New Haven, CT.
Interviewee N. March 23, 2009, personal communication, New Haven, CT.
Lant, C.L., J.B. Ruhl, and S.E. Kraft. 2008. “The tragedy of ecosystem services.” BioScience 58,
   969-974.
Murray, B. 2009. “Economic and business drivers of forest land use choices in the U.S.”
   Presentation at the Forest Carbon Speaker Series, Spring 2009, Yale School of Forestry and
   Environmental Studies, February 16, 2009, New Haven, CT.
Ruhl, J. B. and J.E. Salzman. 2007. “The Law and Policy Beginnings of Ecosystem Services.”
   Journal of Land Use & Environmental Law, Vol. 22, No. 2, 2007; FSU College of Law,
   Public Law Research Paper No. 290. Available at SSRN: http://ssrn.com/abstract=1028759
Ruhl, J.B. 2008. “Agriculture and Ecosystem Services: Strategies for State and Local
   Governments.” NYU Environmental Law Journal, Vol. 17, 2008; FSU College of Law,
   Public Law Research Paper No. 312. Available at SSRN: http://ssrn.com/abstract=1130899




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