stream through farm field

Five Ways Ecosystem Services Market Consortium Can Support Local Watershed Management

By Caroline Wade, Program Director at Ecosystem Services Market Consortium

Ecosystem services from natural and working lands, and the need to protect them, have been getting more and more attention in the media and by agricultural producers, consumers, NGOs, and corporations. The benefits of ecosystem services include clean water, reduced flooding, soil carbon sequestration, reduced greenhouse gas (GHG) emissions, and improved habitat for biodiversity, and as a society, we need to enable opportunities to protect them.

Agriculture has stepped up to play a significant role. Farmers and ranchers can increase ecosystem services through good land and water stewardship practices, thereby benefiting their farms and their communities. Yet, there is a need for mechanisms that incentivize stewardship practices to make them financially viable for producers.

The Ecosystem Services Market Consortium (ESMC) is working to build a national ecosystem services market to pay producers for increasing the beneficial impacts of their operations. Officially launching in 2022, this market will generate and sell carbon, water quality, and water quantity credits from agriculture to incentivize producers to adjust crop and livestock production systems in ways that increase soil carbon sequestration and retention, reduce greenhouse gas (GHG) emissions, improve water quality, and conserve water use.

To test how the program works on the ground, ESMC is conducting pilots of its market approach through seven projects in the Great Lakes, Midwest Corn and Soy Belt, Southern Great Plains, and the Pacific Northwest. We are working with farmers, ranchers, and agricultural supply chain partners to kick the tires and ensure that the market, materials, and tools are practical and the credit sales will adequately reward producers for the services they provide, while also meeting corporate, NGO, consumer, and societal needs.

A national ecosystem services market can certainly support local watershed management, and here are five key points that stand out:

Practice Agnostic, Results Focus

We understand there are many management practices producers can use to reduce nutrient pollution, including nutrient management, cover crops, conservation tillage, drainage water management, and irrigation management to name a few. The ESMC market design allows producers to voluntarily choose which and how many changes to adopt on all or part of their farm or ranch and focuses strictly on measuring outcomes. Participating producers have the flexibility to manage their operations as a system that works for them, while ESMC focuses on quantifying results to measure and highlight the water quality improvements in the producers’ local watershed.

Producer Focused, First and Foremost

As a non-profit and a producer-focused organization, ESMC is committed to maximizing the value returned to the producers whose actions benefit the environment and society. All proceeds from ESMC’s market program will go to paying farmers and ranchers and to program improvements. Improved production systems can meet watershed management goals while benefiting producers through increased resilience to weather and climate events, improved yields, lower input costs, and improved income generation.

One-Stop Shop Approach and Credit Stacking Opportunities

Through this market design, producers can access multiple buyers and markets in a one-stop shop approach, to bring in as much value to their operations as possible. ESMC quantifies and verifies production system improvements and monetizes them to generate income through the program payouts. Stacking carbon and GHG assets with water quality credits increases the value of these improvements to further incentivize adoption to support watershed goals.

Science-Based and Locally Relevant

ESMC’s science-based tools give producers information to better understand how their practices affect and can improve soil carbon sequestration, water quality, and water quantity. Because we evaluate the water quality outcomes of a producer’s field practices, the market is locally and regionally relevant.

Multiple Credit Options

Many of ESMC’s members, which include producer organizations and food companies, as well as other potential buyers, are interested in purchasing both GHG and water quality credits. ESMC’s program allows buyers to purchase either scope 1 credits or scope 3 assets, depending on the customer’s needs. Scope 1 water quality and GHG credits are an important tool in meeting watershed management goals because they generate quantified, verified nutrient and sediment reductions that can be purchased by local wastewater and water entities to meet permit requirements and source water protection goals. Scope 3 water and GHG assets do the same but help corporations report improvements to their environmental inventories based on working with farmers in their supply chain.

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Caroline WadeAbout Caroline Wade

Caroline Wade is a Program Director at ESMC where she provides leadership and coordination to guide research, development, demonstration, and deployment of cost-effective, scalable technologies and approaches necessary to accomplish ESMC’s goals. Previously, she was the Agriculture Program Director for the Illinois Chapter of The Nature Conservancy and worked for the Illinois Corn Growers Association where she served as the Nutrient Watershed Manager.

 

Header image courtesy Pat Sutter/Dane County Dept. of Land and Water Resources/UW-Madison CALS

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