It’s a pleasure and an honor to be here today. This is a timely topic—how to sustain ecosystem services—and I appreciate the opportunity to talk about what we are doing in the United States.

SLIDE TWO

Economic Valuation

Our economic system is set up to protect what has cash value and to take for granted what does not, even if it has tremendous value and even if it doesn’t really come for free. So the United States is looking for ways to show the true economic value of ecosystem services.

My agency, the U.S. Forest Service, manages the national forests and grasslands, about 77 million hectares of public land all across our country. In 2011 alone, these lands accounted for nearly 450,000 jobs and contributed over $36 billion to the U.S. gross domestic product.

Part of that value comes from the work we do to restore ecosystems. To show that value, the U.S. Forest Service recently worked with partners to conduct an avoided cost analysis. We found that the benefits of investing in fuels treatments to avoid catastrophic fire are nearly twice the costs in terms of homes saved, carbon sequestered, road repair avoided, and other benefits.

SLIDE THREE

The United States has 40 million hectares of urban and community forest lands. One study of five U.S. cities has shown that for every dollar invested in urban forest management, annual benefits range from $1.37 to $3.09.

Forest Service researchers worked with partners to create a web-based tool known as i-Tree. The i-Tree software lets communities assess their forests to determine their value. Using i-Tree, for example, the city of Providence, Rhode Island, found that its 415,000 trees provide $4.7 million in environmental benefits each year. i-Tree has been used in more than 100 countries and has had about 12,000 users.

We need more and better measures like these to help citizens and policymakers understand the tremendous benefits they get from investing in green infrastructure. Economic valuation is one way to help sustain the ecosystem services that people get from forests and other open spaces.

SLIDE FOUR

Payments for Ecosystem Services

Another way is when ecosystem services generate concrete benefits for private landowners. Some have always done so, such as wood and outdoor recreation. According to one estimate, outdoor recreation is responsible for one dollar in twelve circulating through the U.S. economy.

The United States has passed laws to protect resources such as air, water, and endangered species. The corresponding regulations allow us to set up mechanisms for conservation. For example, private landowners might sign a safe harbor agreement to protect habitat for an endangered species. In exchange, regulators agree not to impose additional restrictions.

The United States pioneered sulfur dioxide trading to protect landscapes from acid deposition, but we have no similar policy for regulating greenhouse gas emissions. To fill the gap, many states have adopted their own cap-and-trade systems. For example, the Regional Greenhouse Gas Initiative includes 10 states in the Northeast and mid-Atlantic region, and you might have heard of the California Air Resources Board program.

SLIDE FIVE

Under a U.S. law called the Clean Water Act, cities are required to control the temperature of discharges from their wastewater treatment plants. The city of Medford in Oregon found that the most cost-effective alternative for reducing water temperatures was a water quality trading scheme. The city pays upstream landowners to plant streamside vegetation that cools the water enough to offset its wastewater discharges.

Severe fires have damaged municipal watersheds by causing sediments to fill up reservoirs used for drinking water.  Denver, Colorado, is a good example—fires on nearby national forests damaged its municipal watersheds, threatening water supplies for 1.3 million people. In response, Denver invested $16.5 million over 5 years to help the U.S. Forest Service restore forest health. In exchange, the Forest Service is matching Denver’s investment in its municipal watershed. We have similar arrangements with other cities.

SLIDE SIX

When a private forest or ranch is sold for development, the loss of ecosystem services is direct, immediate, and permanent. Even a meager forest or ranch operation provides more ecosystem services than your average subdivision. Our policy is to keep working forests working, and we use tax relief, tax incentives, and conservation easements to that end. The United States has 14 different federal payment programs to help private forest landowners stay on the land and manage their forests sustainably.

A good example is the Forest Legacy Program. The U.S. Forest Service works with states to buy conservation easements from willing private forest landowners. In exchange for a payment, landowners agree to keep environmentally sensitive forest lands permanently forested.

Sometimes, entire communities are involved, as in the case of the 13 Mile Woods Community Forest in New Hampshire. A town called Errol wanted to protect about 2,900 hectares of forest to maintain the rural character of the community and protect a scenic stretch of river.

SLIDE SEVEN

Several organizations worked with the town to purchase the land from a timber company. Funding came from a mix of instruments, including the Forest Legacy Program, but also private loans and investments. State and nongovernmental organizations were also involved.

SLIDE EIGHT

The community is managing the forest for economic benefits through forestry and outdoor recreation. Timber sales have exceeded $3.7 million in value, and the community gained jobs in both forestry and recreation. Revenues have paid off half of the loans within 7 years.

SLIDE NINE

Here are some of the lessons learned: The community got expert outside support to help raise funds. The partners leveraged both public and private funds. Community ownership was key, with the project reflecting community priorities. Local residents played leadership roles at every step, from planning, to implementation, to monitoring. Permanent protection of the land allowed for long-term investments. It all took time, good timing, and a lot of patience.

These are just some of the examples we have in the United States of payments for ecosystem services. In 2007, payments for forest-based ecosystem services from all sources totaled $1.9 billion. Private sources accounted for the lion’s share, about 81 percent.

SLIDE TEN

The True Value of Forests

Too often, we are losing ecosystem services in the United States for lack of understanding their true value. Back in 1968, the Director of the National Park Service in the United States, George Hartzog, summed up the challenge in this way:

We haven’t learned yet to assess accurately the benefits to man of the sight of an alligator sliding into dark waters, or of a horizon free of smokestacks and overpasses, or an evening sky glittering with the flash of white wings catching the last rays of daylight; but our inability to measure them makes those values no less real.

We have got to avoid such market failures. As methods of natural accounting continue to develop … as methods of marketing ecosystem services continue to evolve … I believe they will help our citizens and policymakers better understand the true value of forests to our economies, for the benefit of generations to come.