United Kingdom: Paying for Ecosystem Services in the Public and Private Sectors

The research literature is replete with analyses showing how changes to natural capital and hence the supply of ecosystem services can enhance both environmental sustainability and public benefits. However, many of the key resources necessary to deliver such improvements are in private ownership. This causes a problem when, as is often the case, a move to supply greater ecosystem services incurs costs (including forgone profits) for the private resource owner. So, for example, reducing farm pesticide use may enhance river and drinking water quality but incurs costs for farmers who now have to suffer greater pest damage to the crops they rely upon for an income. Overall, society might benefit substantially from such a move but the farmer would bear almost all of the costs and is therefore understandably resistant. To overcome such problems a variety of payment for ecosystem services (PES) schemes have been developed to stimulate the efficient delivery of key, high-value ecosystem services that are either not produced, or are underprovided by the normal market activities of private producers.