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U.S. private forest landowners earn $3.3 billion per year from ecosystem services

Forests provide clean air, clean water, and wildlife habitat. But private landowners don’t usually get paid for these benefits their forests provide. However, there are some opportunities to receive payments for ecosystem services, and they have been growing in recent years.

Director’s Choice
A deer looks out from behind tall grass.
Forests provide important wildlife habitat. Forest landowners can capitalize on this by selling or leasing access, such as for hunting or wildlife viewing. Hunting, including of white-tail deer, is the largest single ecosystem service payment source for forest landowners. Courtesy photo by Caleb Slemmons, National Ecological Observatory Network, Bugwood.org.

In most cases, private forest landowners are not able to market and sell the rights to the services of cleaning water and air, storing carbon, or providing wildlife habitat. However, in recent decades, opportunities to make money from those services have increased. These payments can incentivize land ownership rather than converting to some other land use.

A team of researchers from the USDA Forest Service and Oak Ridge Institute for Science and Education compiled a thorough and exhaustive dataset on payments for forest-based ecosystem services in the U.S. Payments come from government programs, compliance markets for credits or offsets created by regulations, and voluntary markets.

The researchers documented an increase of 64% over 15 years from $2.2 billion in 2005 to $3.6 billion in 2019, after adjusting for inflation. This equals about $7.77 per acre of private forestland per year, although many landholdings still receive none. Hunting leases are the largest single ecosystem service payment source. In 2016, landowners received $1.6 billion for hunting leases.

Markets for carbon and water have also grown. In particular, California’s cap-and-trade program increased from $3 million in 2010 to $326 million in 2019. However, government programs that pay for ecosystem services have steadily decreased in real dollar terms over time, as has participating land area.

Principal Investigator
Gregory Frey, Research Forester
RWU
4804 - Forest Economics and Policy
Publication
Payments for forest-based ecosystem services in the United States: Magnitudes and trends
CompassLive Article
Payments for ecosystem services
Research Partner
Natasha James, Washington Office of Strategic Planning & Performance Accountability
External Partners
Chalisa Kallayanamitra, Bank of Thailand
Philadelphia Wilkens, US Endowment for Forestry and Communities