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• 1. [Article] Ecosystem Service Market Development: The Role and Opportunity for Finance

  This report is laid out as a progressive exploration of how the economics of ES production interacts with finance, broadly construed, in actual credit transactions. The inquiry proceeds in several steps. ...

  Citation × Citation Citation Abstract Copy Title: Ecosystem Service Market Development: The Role and Opportunity for Finance Author: Institute for Natural Resources, Central Oregon Intergovernmental Council, Duncan, Sally, Lurie, Sue, Ecosystem Economics This report is laid out as a progressive exploration of how the economics of ES production interacts with finance, broadly construed, in actual credit transactions. The inquiry proceeds in several steps. First, the economics of ecosystem services production is explored to provide critical context for potential financing approaches. This section examines dynamics of production under a number of incentive mechanisms currently employed to produce ecosystem services and also considers how economic incentives affect policy goals. The paper next turns to the role of finance in ES production, examining project cash flows and how financing directly enables development of ES credits through on-the-ground projects. The following section considers the breadth of sources for project finance, with a particular focus on how project design and characteristics shape access to government, philanthropic, and private capital sources. With this framework established, financing tools and recommendations are explored with an emphasis on how different approaches can influence key drivers of access to project funding. Input from stakeholder and financier interviews, as well as workshop findings, are integrated throughout. A brief conclusion completes the report. Title: Ecosystem Service Market Development: The Role and Opportunity for Finance Author: Institute for Natural Resources, Central Oregon Intergovernmental Council, Duncan, Sally, Lurie, Sue, Ecosystem Economics This report is laid out as a progressive exploration of how the economics of ES production interacts with finance, broadly construed, in actual credit transactions. The inquiry proceeds in several steps. First, the economics of ecosystem services production is explored to provide critical context for potential financing approaches. This section examines dynamics of production under a number of incentive mechanisms currently employed to produce ecosystem services and also considers how economic incentives affect policy goals. The paper next turns to the role of finance in ES production, examining project cash flows and how financing directly enables development of ES credits through on-the-ground projects. The following section considers the breadth of sources for project finance, with a particular focus on how project design and characteristics shape access to government, philanthropic, and private capital sources. With this framework established, financing tools and recommendations are explored with an emphasis on how different approaches can influence key drivers of access to project funding. Input from stakeholder and financier interviews, as well as workshop findings, are integrated throughout. A brief conclusion completes the report. Close

• 2. [Article] Financing mechanisms that advance ecosystem service markets and promote rural sustainability

  Ecosystem services markets represent potential revenue streams for small- and medium-scale rural agricultural and forest producers, many of whom have faced significant economic downturns over the past ...

  Citation × Citation Citation Abstract Copy Title: Financing mechanisms that advance ecosystem service markets and promote rural sustainability Author: Institute for Natural Resources, Central Oregon Intergovernmental Council, Duncan, Sally, Ewing, Amy, Lurie, Sue, Ecosystem Economics Ecosystem services markets represent potential revenue streams for small- and medium-scale rural agricultural and forest producers, many of whom have faced significant economic downturns over the past several decades. Demand for ecosystem services (ES) in the form of investments by public agencies, mitigation funds from regulated entities, and voluntary payments from corporations and individuals will require credits predominantly supplied by rural areas. Participation on the supply side entails high transaction costs and financial risks that may, however, discourage many rural landowners from participating in projects that would generate supply credits. The project purpose was to explore rural landowner financing needs for ES projects in the growing marketplace. The Institute for Natural Resources (INR) explored those issues in two phases. Phase I entailed preliminary identification of the range of financial approaches for payments for ecosystem services (PES) projects. That was followed by a December 1, 2009, workshop which brought together financial industry professionals along with non-governmental and government leaders active in developing ecosystem services markets to discuss the challenges and opportunities for financing ES projects. Workshop findings from Phase I, entailing participation by financial experts, helped inform the investigation for Phase II involving rural landowners. Phase II combined multiple approaches including focus groups, case studies and a pilot project evaluation. Title: Financing mechanisms that advance ecosystem service markets and promote rural sustainability Author: Institute for Natural Resources, Central Oregon Intergovernmental Council, Duncan, Sally, Ewing, Amy, Lurie, Sue, Ecosystem Economics Ecosystem services markets represent potential revenue streams for small- and medium-scale rural agricultural and forest producers, many of whom have faced significant economic downturns over the past several decades. Demand for ecosystem services (ES) in the form of investments by public agencies, mitigation funds from regulated entities, and voluntary payments from corporations and individuals will require credits predominantly supplied by rural areas. Participation on the supply side entails high transaction costs and financial risks that may, however, discourage many rural landowners from participating in projects that would generate supply credits. The project purpose was to explore rural landowner financing needs for ES projects in the growing marketplace. The Institute for Natural Resources (INR) explored those issues in two phases. Phase I entailed preliminary identification of the range of financial approaches for payments for ecosystem services (PES) projects. That was followed by a December 1, 2009, workshop which brought together financial industry professionals along with non-governmental and government leaders active in developing ecosystem services markets to discuss the challenges and opportunities for financing ES projects. Workshop findings from Phase I, entailing participation by financial experts, helped inform the investigation for Phase II involving rural landowners. Phase II combined multiple approaches including focus groups, case studies and a pilot project evaluation. Close