Ecosystem services and forestland investing

Last night, as part of Portland State University’s Solutions Seminars, I listened to Amrita Vijay Kumar (Director of Conservation Finance at Ecotrust) talk about forest land investing and monetizing ecosystem services.  In making the case for why forest land is so valuable, one example she noted was how the cost of treating drinking water increases 20% for every 10% loss of forestland in a watershed (USDA) – a message we have been sharing, as well.  She outlined opportunities for managing land differently, specifically noting that in the last 15 years, approximately 84% of private forestland changed ownership.  Who buys that land and what they do with it can greatly impact the value of the ecosystem services derived from the land.

Ecotrust formed Ecotrust Forest Management, Inc. in 2004 to manage land using a different model.  What I was most interested in was how those public values (i.e. clean water and air) get monetized.  Ms. Kumar outlined that the lands are managed to take advantage of a variety of markets, which does include timber but may also include carbon sequestration (although this is not completely viable yet) and alternative forest products such as salal.  They also strategically take advantage of conservation funding (i.e. grants) and New Market Tax Credits.  I left the seminar understanding a bit more about their forest management but still wondering if this model can be viable without it’s reliance on conservation grants and new market tax credits.  Will the non-timber markets develop beyond carbon sequestration and surpass the domestic sawlog prices?  And if that does happen, are markets the best tool for managing our forests?  Definitely worthy of exploring more.