LAW/ENVIRONMENT Advance praise for The Law and Policy of Ecosystem Services “The work synthesized in this wide-ranging volume marks a dramatic transformation in the way people think about the environment. Ruhl, Kraft, and Lant outline the concrete changes in law and policy needed to go further and turn thinking into action. This book is packed with intel- lectual excitement and practical promise.” — Gretchen C. Daily, professor, biological sciences, and Senior Fellow, Woods Institute for the Environment, Stanford University, author of New Economy of Nature “One of the most important contributions of economics to environ- mental protection is the idea that ecosystems can perform economically valuable services even if their monetary value is not captured in mar- kets. This book is the most comprehensive survey of current efforts to measure these services and to overcome the disincentives for land owners to produce them. However, its real contribution is a carefully reasoned suite of legal and policy reforms to increase the production of vital ecosystem services in the future.” — Dan Tarlock, Distinguished Professor of Law, Chicago-Kent College of Law “As with any new idea, there is confusion over ecosystem services and what conserving or selling them really means. Ruhl, Kraft, and Lant are meticulous in research, comprehensive in scope, and accessible in style. To dig beneath the hype and understand the promise and challenges of conserving ecosystem services, start by reading this book.” — James Salzman, Nicholas Institute Professor of Environmental Policy, Duke University J. B. Ruhl is Matthews and Hawkins Professor of Property and codirector of the Environmental, Natural Resources, and Land Use Law Program at Florida State University School of Law. Steven E. Kraft is professor and chair of the Department of Agribusiness Economics and codirector of the environmental resources and policy Ph.D. program at Southern Illinois University–Carbondale. Christopher L. Lant is professor of geography and envi- ronmental resources and codirector of the environmental resources and policy program at Southern Illinois University–Carbondale. Cover design by John Costa, New Orleans Washington • Covelo • London www.islandpress.org All Island Press books are printed on recycled, acid-free paper. J. B. Ruhl Steven E. Kraft Christopher L. Lant The Law and Policy of Ecosystem Services Ecosystem Services Ecosystem Services Ruhl•Kraft•Lant The Law and Policy of Ecosystem Services Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page i About Island Press Island Press is the only nonprofit organization in the United States whose principal pur- pose is the publication of books on environmental issues and natural resource manage- ment. We provide solutions-oriented information to professionals, public officials, busi- ness and community leaders, and concerned citizens who are shaping responses to environmental problems. Since 1984, Island Press has been the leading provider of timely and practical books that take a multidisciplinary approach to critical environmental concerns. Our growing list of titles reflects our commitment to bringing the best of an expanding body of lit- erature to the environmental community throughout North America and the world. Support for Island Press is provided by the Agua Fund, The Geraldine R. Dodge Foundation, Doris Duke Charitable Foundation, The Ford Foundation, The William and Flora Hewlett Foundation, The Joyce Foundation, Kendeda Sustainability Fund of the Tides Foundation, The Forrest & Frances Lattner Foundation, The Henry Luce Foundation, The John D. and Catherine T. MacArthur Foundation, The Marisla Foun- dation, The Andrew W. Mellon Foundation, Gordon and Betty Moore Foundation, The Curtis and Edith Munson Foundation, Oak Foundation, The Overbrook Founda- tion, The David and Lucile Packard Foundation, Wallace Global Fund, The Winslow Foundation, and other generous donors. The opinions expressed in this book are those of the author(s) and do not necessar- ily reflect the views of these foundations. Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page ii THE LAW AND POLICY OF ECOSYSTEM SERVICES Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page iii Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page iv THE LAW AND POLICY OF ECOSYSTEM SERVICES J. B. Ruhl • Steven E. Kraft Christopher L. Lant Washington ) Covelo ) London Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page v Copyright © 2007 Island Press All rights reserved under International and Pan-American Copyright Conventions. No part of this book may be reproduced in any form or by any means without permission in writing from the publisher: Island Press, 1718 Connecticut Avenue, N.W., Suite 300, Washington, DC 20009. ISLAND PRESS is a trademark of The Center for Resource Economics. Library of Congress Cataloging-in-Publication Data Ruhl, J. B. The law and policy of ecosystem ser vices / by J. B. Ruhl, Steven E. Kraft, and Christopher L. Lant. p. cm. Includes bibliographical references. ISBN-13: 978-1-55963-094-8 (cloth : alk. paper) ISBN-10: 1-55963-094-9 (cloth : alk. paper) ISBN-13: 978-1-55963-095-5 (pbk. : alk. paper) ISBN-10: 1-55963-095-7 (pbk. : alk. paper) 1. Environmental economics. 2. Ecosystem management. 3. Environmental protection— Decision making. 4. Biodiversity conservation—Law and legislation. I. Kraft, Steven E. II. Lant, C. L. III. Title. HC79.E5R84 2007 333.7 dc22 2006036603 British Cataloguing-in-Publication Data available. Book design by Brighid Willson Printed on recycled, acid-free paper Manufactured in the United States of America 09 08 07 06 05 04 03 02 8 7 6 5 4 3 2 1 Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page vi Contents Preface ix Introduction 1 PART I. THE CONTEXT OF ECOSYSTEM SERVICES 13 Chapter 1. Ecology 15 Chapter 2. Geography 36 Chapter 3. Economics 57 PART II. THE STATUS OF ECOSYSTEM SERVICES IN LAW AND POLICY 85 Chapter 4. Property Rights 87 Chapter 5. Regulation 127 Chapter 6. Social Norms 158 PART III. EMPIRICAL CASE STUDIES IN ECOSYSTEM SERVICES LAW AND POLICY 169 Chapter 7. An Odyssey on 6,000 Acres: Pre-1670 to 2006 171 Chapter 8. Water: Blue, Green, and Virtual 177 vii Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page vii Chapter 9. The Conservation Reserve Program 1985–2006: From Soil Erosion to Ecosystem Services 186 Chapter 10. The National Conservation Buffer Initiative: Ecosystem Services from Riparian Buffers 193 Chapter 11. From Amber to Green: The Common Agricultural Policy of the European Union 198 Chapter 12. Ecosystem Services from an Agricultural Watershed: The Case of Big Creek 205 Chapter 13. Wetland Mitigation Banking: An Ecosystem Market without Ecosystem Services 213 Chapter 14. Ecosystem Services and Pollution Trading I: A Sulfurous Success and a Nutritious Failure 222 Chapter 15. Ecosystem Services and Pollution Trading II: Carbon Trading to Ameliorate Global Warming 231 PART IV. DESIGNING NEW LAW AND POLICY FOR ECOSYSTEM SERVICES 249 Chapter 16. Drivers and Models 251 Chapter 17. Trade-Offs and Transitions 258 Chapter 18. Instruments and Institutions 265 Conclusion 293 Endnotes 297 References 305 About the Authors 333 Index 335 viii  Contents Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page viii Preface This project has its origins in a conference on ecosystem services that Gretchen Daily of the Stanford Biology Department, Geoff Heal of the Columbia Busi- ness School, and Peter Raven, Director of the Missouri Botanical Gardens, organized at the Gardens in 1998. Having become intrigued by the concept of ecosystem services, which at the time was still relatively new even within eco- logical economics, the three of us eagerly attended and immediately noticed that, besides J. B., only one other lawyer was present in the audience of more than a hundred. The room was filled with ecologists, economists, and represen- tatives from other social and physical sciences, but the contingent from law was conspicuously and troublingly thin. Law, after all, eventually has to enter the picture for ecosystem services to be put into operation as a meaningful policy driver. We left the conference thinking that a top-to-bottom exploration of the law and policy of ecosystem services was in order. We hammered out an initial outline of this book around a sandwich shop table in Carbondale, Illinois, not long after the conference, but its scope and structure have gone through many iterations since then. The other lawyer present at the Missouri Botanical Gardens conference, Jim Salzman of Duke University School of Law, was of like mind about the importance of getting law on board, and toward that end had received a grant from the U.S. Environmental Protection Agency to examine opportunities for using ecosystem service values in decision making under then existing laws and regulations. Jim invited J. B. to join the grant team. Jim also spent a sabbatical year at Stanford in 2001–02, as did Geoff Heal, making Stanford the center of gravity at the time for interdisciplinary work on ecosystem services. Gretchen and Jim, along with Buzz Thompson of Stanford Law School, he organized a meeting of all involved at Stanford in 2000, the papers from which were published in 2001 in the Stanford Environmental Law Journal. ix Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page ix [...]... and human capital services to produce human welfare.” They compiled a list of seventeen major ecosystem services, shown in the right-hand column of Table 1.3 Many other lists of ecosystem services have been compiled, but while holistic inventories such as these certainly capture the essence of the ecosystem services concept, some further typology of kinds of ecosystem services is useful to inform the. .. theme of ecology, therefore, is focused on understanding the impact of natural and anthropogenic events on the investment in and depreciation of natural capital in the form of ecosystem structure, and the consequent impact on the delivery of goods and services from the ecosystem (Deutsch et al 2003; Ekins 2003; Ekins et al 2003) Like our conventional economy, however, understanding cause and effect in the. .. ecosystem services, which are the consequence of only some ecosystem functions The critical difference between the two, and which makes the development of ecosystem services policy both complicated and controversial, is that ecosystem services have relevance only to the extent human populations benefit from them They are purely anthropocentric The ecology of ecosystem services, therefore, must be carefully... be met The social and legal consequences of the complexity of ecosystem services are the subject of the chapters in part II, which provides a baseline for future work by examining the current status of ecosystem services in the law and society First Ruhl-00-Intro (1-12) 10 4/10/07 9:59 PM Page 10 Introduction and foremost is the absence of any supportive system of property rights governing the production... present The progression of the topics follows the choices that law and policy will have to make to put such an approach into action First, it is essential to identify the important drivers of the existing status of natural capital and ecosystem services and to develop models of how they can be moved and the likely consequences of doing so (chapter 16) Policy choices then must confront the reality that taking... in law and society, in other words, is that they have none Part III introduces a series of nine empirical case studies that explore the causes and consequences of the lack of attention property rights, regulation, and social norms have given to natural capital and ecosystem service values The case studies focus first on the application of ecosystem services to individual parcels of land (chapter 7) and. .. and tradable pollution permits (chapters 14 and 15) Based on the foundational chapters in parts I and II and the lessons learned from the case studies in part III, part IV then forges an approach for the design of new law and policy for ecosystem services, working from the current baseline and taking into account the inherent limitations their ecological, geographic, and economic contexts present The. .. the United States and the European Union (chapter 11), and how these policies affect the economy and ecosystem service provision of a typical agricultural watershed (chapter 12) Part III then investigates the successes, failures, and potential of market-based instruments for encouraging investment in natural capital and the consequent delivery of ecosystem services in the realm of wetland mitigation banking... example, photosynthesis can be measured and studied at scales ranging from the individual cell to the canopy of a forest ecosystem as defined Often, therefore, it is as much a question of how to define an ecosystem as it is to understand how these processes work within it Ecosystem Functions The process-based description of ecosystems has led to improved understanding of the functions ecosystems perform... understanding of how the basic ecosystem processes work together to generate the functions vital to sustaining the ecosystem within its environment Ecosystem Structure and Natural Capital Ecosystem functions contribute to the building of the ecosystem s physical structure, such as biomass (e.g., vegetation and wildlife) and abiotic resources (e.g., soil and water), which in turn supports the sustainability of the . ii THE LAW AND POLICY OF ECOSYSTEM SERVICES Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page iii Ruhl-00-FM (i-x) 4/10/07 9:57 PM Page iv THE LAW AND POLICY OF ECOSYSTEM SERVICES J undertakes—to take the discussion of ecosystem services out of the “easy frame of mind” and push it to the next level, at which serious and detailed law and policy