1. Presentation to CARE/ WWF
OVERVIEW OF PAYMENT
SYSTEMS
Sara J. Scherr
Presentation to CARE/ WWF
April, 2004

2. TYPES OF ECOSYSTEM SERVICE MARKETS
Self-organized private deals
Public payments to private land and forest
owners to protect or manage ecosystem
services
Open trading of environmental credits
under a cap or floor
Eco-labeling of forest or farm products

3. SELF-ORGANIZED PRIVATE DEALS
WHAT: Private entities pay for private services in direct, usually closed, transactions with little government involvement
WHO: B: Offsite beneficiaries of forest services (companies, urban conservationists)
S: Forest landowners responsible for those services
INSTRUMENTS: Purchase of development rights, direct payments
EXAMPLE: Bottling company pays upstream landowners to improve land-management practices to ensure water quality

4. PUBLIC PAYMENTS
WHAT: Government payments for better land and forest- management for protection of ecosystem services
WHO: B: Government or public sector institution S: Landowners/managers (individual landowners, common property forest owner groups, organized watershed users)
INSTRUMENTS: Direct payments
EXAMPLE: Conservation easements, contracted farm set- asides for conservation, co-finance programs, payments for endangered species presence

5. OPEN TRADING
WHAT: Government regulation creates demand and buyers/sellers of environmental service engage in trading in order to comply
WHO: B: Companies, utilities, other institutions
S: Land-owners/ managers of ecosystem services
INSTRUMENTS: Direct payments for credits
EXAMPLE: “Tradable development rights,” carbon emissions offset trading

6. ECOLABELING
WHAT: Forest/farm products produced under certified management systems
WHO: B: Consumers who wish to buy “environmentally- friendly”
S: Forest/farm producers
INSTRUMENTS: Payment embedded in traded product, third- party certification or marketing
EXAMPLE: Forest Stewardship Council wood, Marine Stewardship Council

7. Forest Trends Title Bar
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