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

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.