Payment for and Management of Ecosystem Services

Issues and Options in the Nordic Context

image of Payment for and Management of Ecosystem Services

Payment for ecosystem services (PES) is a type of environmental policy instrument that gives the owner of a natural resource direct incentives to manage it in society's best interest. The report provides an overview of current theory and experiences from the use of PES. Several examples of PES already exist in the Nordic countries, most of which aim to preserve biodiversity or reduce nutrient runoff. The report shows that there is scope both to improve and expand the use of PES in the Nordic countries. Targeted and differentiated payments, for example by using competitive tendering where land owners have to reveal their compensation levels and ecosystem services they can offer, is a promising approach. The use of PES may also be expanded, for example into areas where regulation traditionally is perceived as very negative by land owners, or used in combination with existing regulation. The report was commissioned by the Working Group on Environment and Economics under the Nordic Council of Ministers



Linking Ecosystem services and Economic value

This section links the notion of ES to economic value. It describes the different types of economic value that human society derives from ES and sets forth a framework for thinking about how and which ES become economically valuable, their role in providing human society with benefits and how we value these services. Public-private good aspects are introduced to discuss the different regulatory approaches to dealing with (mainly) negative and positive externalities. This section ends by identifying and discussing different types of beneficiaries and the distribution of rights.


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