Developing Payments for Ecosystem Services Markets

Water Quality Trading

Water quality credits are reductions in water pollution (e.g. nutrients) earned by changing land management practices on private land. Credits are purchased by entities needing to offset the effect of water impacts from point (e.g. sewage effluent emitted from a pipe) and non-point (e.g. fertilizer run-off from farm fields) sources under the Total Maximum Daily Load (‘‘TMDL’’) requirements of the Clean Water Act.

Water Quantity (In-Stream Flow) Transactions

Water quantity transactions are a growing method of insuring the maintenance and protection of in stream water flows for the benefit of fisheries and aquatic habitats. Water rights that would otherwise be diverted for agricultural or urban use are purchased from landowners like EIP to allow water to remain ‘‘in stream’’ for the benefit of aquatic species and ecosystems.

Transfer of Development Rights (‘‘TDR’’)

TDR programs enable the sale of development density rights from one property to another, more appropriate, property so that it can be developed at a greater density. Sale of these rights offers an economically attractive alternative to full development of the property.

Terrestrial Carbon Sequestration

Under most acceptable carbon sequestration regimes, landowners like EIP can generate carbon offset credits  by replanting forests, or managing forests and agricultural land in ways that result in a net sequestration of atmospheric carbon dioxide and/or other greenhouse gasses. Credits are used by buyers to offset emissions of gases that affect global climate from projects that are required to or elect to reduce the serious environmental impacts of their operations.

For more information on these developing markets, please see our Market Resources page.