The Problem with Ecosystem Services: Promoting Private Investment in the Protection of Wetlands

With world attention increasingly focused on the relationship between environmental and economic well-being, Environmental Defense Fund is where policy makers and business leaders turn for win-win, pragmatic and non-partisan solutions. Founded in 1967, this leading national environmental advocacy organization has tripled in size over the past decade by using sound science to identify critical environmental challenges and sound economics to develop the most efficient solutions — solutions that harness market forces, build uncommon partnerships, and strengthen both the environment and the economy.

For this project, the group focused on the EDF’s policies and initiatives surrounding wetlands restoration and preservation. The first step was to identify the role of wetlands within communities, which they did by identifying tangible benefits that the wetlands provide to the surrounding populations. Wetlands (within the context of a watershed) can filter water, minimizing the additional processing that needs to take place to make water potable. Also, wetlands can mitigate the effects of floods, because of their ability to soak up large amounts of water. Positive effects like these, however, are often forgotten because they are free and available to everyone, which causes them to be both exploited by overuse and forgotten about.

The current policy with regards to wetlands preservation is one of minimum regulation, which is a passive rather than active reaction to the issue of wetlands preservation. Rather than pursue further regulation, this group found that an increase in private investment and collaboration have the greatest positive impact on the wetlands. Private investment, for example, could be used to leverage the water filtration benefits of wetlands through a wetland investment trust, to which all stakeholders in the wetland could contribute. Establishing this structure would provide a space for private interests to both use and protect the wetland, while maintaining the efficiency of the private sector. Flood mitigation, another important benefit of the wetlands, could be similarly protected by collaborating with the US Flood Insurance Program to fund incentives for wetland protection projects. Because in both of these situations there is a private interest in protect the wetlands (because of the benefits they provide to the community), private investment is the most efficient way to produce positive change.