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Payment for and Management of Ecosystem Services

Issues and Options in the Nordic Context

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Payment for ecosystem services (PES) is a type of environmental policy instrument that gives the owner of a natural resource direct incentives to manage it in society's best interest. The report provides an overview of current theory and experiences from the use of PES. Several examples of PES already exist in the Nordic countries, most of which aim to preserve biodiversity or reduce nutrient runoff. The report shows that there is scope both to improve and expand the use of PES in the Nordic countries. Targeted and differentiated payments, for example by using competitive tendering where land owners have to reveal their compensation levels and ecosystem services they can offer, is a promising approach. The use of PES may also be expanded, for example into areas where regulation traditionally is perceived as very negative by land owners, or used in combination with existing regulation. The report was commissioned by the Working Group on Environment and Economics under the Nordic Council of Ministers

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Preface

Payment for ecosystem services (PES) is a type of environmental policy instrument that gives the owner of a natural resource direct incentives to manage it in society's best interest. For the resource owner this usually means giving up some private income (for example from timber sale) in exchange for a compensation for the ecosystem services (for example climate regulation, water purification, biodiversity protection, reduced nutrient runoff etc.). This report provides an overview of current theory and experiences from the use of PES in OECD countries, and discusses options to expand and improve PES schemes in the Nordic countries. The report was commissioned by the Working Group on Environment and Economics under the Nordic Council of Ministers. The project has been guided by a steering group consisting of Ulrika Lindstedt (Swedish Environmental Protection Agency), Øyvind Lone (Norwegian Ministry of Environment) and Jørgen Schou (Danish Ministry of Environment). The project has been carried out by Econ Pöyry in Norway and Pöyry in Denmark. Henrik Lindhjem, Econ Pöyry, has been project leader. The report has been written by Marianne Zandersen (main author), Kirsten Grønvik Bråten and Henrik Lindhjem. Haakon Vennemo of Econ Pöyry acted as the internal quality assurer of the report.

English

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