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Tropical Forests Push Payments for Ecosystem Services onto the Global Stage
The term payments for ecosystem services (PES) describes financial arrangements and schemes designed to protect the benefits that the natural environment provides for human beings. The Millennium Ecosystem Assessment, a report of work conducted by some 1,360 scientists from around the world, estimated in 2005 that about 60 percent of all ecosystem services are being degraded or used unsustainably.1 (See Table 1.)
Governments and businesses are using PES to protect an increasing number of these services—from crop pollination to water filtration—working with a variety of stakeholders and financial arrangements. Payment schemes for watershed and biodiversity services are currently the primary markets for ecosystem services. These markets were estimated to have a combined global value of at least $11 billion in 2008.2 (See Figure 1.) Smaller markets exist for forest carbon sequestration programs and water quality trading.
Payments for watershed services that protect and enhance water quality were estimated to be worth at least $9.25 billion in 2008.3 The largest market for this was in China, valued at around $7.8 billion in 2008—up from just $1 billion in 2000.4 The second largest market was in the United States, valued at around $1.4 billion.5
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