Ecological Services

The Forestland Group defines Ecological Services as the market benefits arising from the ecological functions of healthy ecosystems. In a forest ecosystem, the services with explicit capital value are forest carbon sequestration, streamside and wetland mitigation, woody biomass, and wind energy. An existing capital market for ecological services has been created where ecological goods and services are demanded by “society” and supplied by public and private landowners. In addition to monetizing these attributes separately, forest ecosystem attributes can be sold and to varying degrees protected under a deeded covenant restriction or Conservation Easement that follows the property title into perpetuity. Working Forest Conservation Easements are a tool often used to protect private, productive forestland while maintaining the lands as working forest.

While we are seeing existing market opportunities for ecological services, TFG expects the demand for ecological service to increase as the markets mature over the next three to five years. Furthermore, we expect the economic potential of ecological services to increase relative to other revenue sources. Kaarsten Turner Dalby, Senior Director of Ecological Services is focused on identifying current and future opportunities. She is developing markets, engaging partners and evaluating prospective projects. Specifically, TFG expects to see accelerating growth in forest carbon sequestration projects, steady growth in the renewable wind energy space, maturation of the woody biomass markets, and creative solutions being developed for the mutual alignment of conservation opportunities with the goals of working forests. Practically speaking, our strategy with regards to Ecological Services is to be engaged and opportunistic.

Markets and Opportunities

An ecosystem services framework is one way to approach monetizing all of the values available on timberland. Although monetary pricing continues with respect to the valuation of ecosystem services, the challenges in policy implementation and management are significant and complex. They are both the subject of extensive academic pursuit.1 Payment and trading of services is an emerging world-wide solution where one can acquire credits for carbon sequestration, biodiversity and aquatic restoration.2 In some cases, banks for handling such credits have been established and conservation companies are on the public stock exchanges. In other cases, markets are over-the-counter and voluntary. TFG focuses on the following markets and opportunities:

• Forest Carbon
• Streamside and Wetland Mitigation
• Woody Biomass Energy
• Wind Energy
• Conservation Easements
• Forest Certification

1Ostrom, E. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press, Cambridge. 279pp. Dietz, T. E. Ostrom and P.C. Stern. 2003. The struggle to govern the commons. Science 302: 1907-1912. Pretty, J. 2003. Social capital and the collective management of resources. Science 302: 1912-1914.
2Daily, G.C., T. Söderqvist, S. Aniyar, K. Arrow, P. Dasgupta, P.R. Ehrlich, C. Folke, A. Jansson, B. Jansson, N. Kautsky, S. Levin, J. Lubchenco, K. Mäler, D. Simpson, D. Starrett, D. Tilman, and B. Walker. 2000. The value of nature and the nature of value. Science 289: 395-396.