Table 1. Estimates of market size, buyers, and sellers in various market segments of payment for ecosystem services (PES) as of 2009. See text for explanations of categories and market segments. Type of payment for ecosystem services Market size (million USD/yr)† Buyer Seller Data source 1. Biodiversity conservation (A) Public sector 1450‡ (190) Governments, multilateral organizations Farmers, forest landowners, other private land stewards European Union Directorate-General for Agriculture and Rural Development 2008, Forest Trends and Ecosystem Marketplace 2008, U.S. Natural Resources Conservation Service Farm Bill Conservation Programs§ (B) Private, regulated (cap-and-trade for terrestrial habitats and species) 380¦ (unknown) Public agencies (transportation departments, etc.), real estate developers Mitigation banking companies, public agencies, nongovernmental organizations (NGOs), private land stewards Environmental Law Institute 2007, program websites (C) Private, voluntary (corporate social responsibility, “green” branding, philanthropic) 10–17 (5–8) Corporations, conservation NGOs, individuals Private land stewards, NGOs, private companies, indigenous and community groups Forest Trends and Ecosystem Marketplace 2008, project websites (D) Eco-certified forest products > 5000¶ (> 120) Individual consumers, retailers, industries that use wood and fiber Certified forest products producers Bishop et al. 2008, Forest Trends and Ecosystem Marketplace 2008 Eco-certified agricultural products 42,000¶ (unknown) Individual consumers, retailers, food processing industries Farmers Bishop et al. 2008, Forest Trends and Ecosystem Marketplace 2008 2. Carbon sequestration and storage (only related to land use, land-use change, and forestry) (A) Public sector 15‡ (15) National governments, multilateral organizations Private land stewards World Bank 2007 (B) Private, regulated < 10 (<10) Regulated industry, governments, carbon funds, brokers, investors Private landowners, project developers United Nations Framework Convention on Climate Change# (C) Private, voluntary 157 (~100) Corporations, NGOs, universities, individuals Carbon offset retailers and project developers, conservation NGOs, governments Hamilton et al. 2009 (D) Eco-certified products See 1D¶ Same as 1D Same as 1D 3. Watershed protection (A) Public sector 14,200‡ (5500 in China; 180 in other developing nations) Government water and wastewater utilities, other government agencies Private land stewards, communities, forest companies, public landowners European Union Directorate-General for Agriculture and Rural Development 2008, Porras et al. 2008, Bennett 2009, U.S. Natural Resources Conservation Service Farm Bill Conservation Programs§ (B) Private, regulated 1100†† (< 5) Private water and wastewater utilities, point source emitters Nonpoint source emitters (e.g., farmers, owners of streams), developers of wetland banks Environmental Law Institute 2007, Porras et al. 2008 (C) Private, voluntary 8–15 (5–10) Private industry (beverage, mining, hydropower, and agribusiness sectors), individuals Private land stewards, forest companies, public landowners, cooperatives Porras et al. 2008, watershedmarkets.org (D) Eco-certified products See 1D¶ Same as 1D Same as 1D 4. Landscape beauty and recreation (A) Public sector 5100 (< 5) National governments Farmers, forest landowners, other private land stewards European Union Directorate-General for Agriculture and Rural Development 2008 (B) Private, regulated 0 n/a n/a n/a (C) Private, voluntary (hunting and fishing fees, access to ecotourism sites) 2200 (60) Tourists, hunters, anglers, commercial tour operators, conservation NGOs Public and private land owners, communities Lindsey et al. 2007, Bishop et al. 2008 (D) Eco-certified products 0 n/a n/a n/a †Global value; value for developing countries in parentheses. ‡Many public sector PES programs promote more than one of the major ecosystem service categories in rural landscapes, making it difficult to segment these payments into individual ecosystem service categories. Such “bundling” or multi-functionality characterizes public-sector PES programs in the European Union, United States, China, Costa Rica, and other countries. We place these multi-objective payments in the category for which they are targeted most specifically, according to the program’s enabling legislation, stated goals, or actual implementation. §http://www.nrcs.usda.gov/programs/farmbill/2008/ataglance.html. ¦This number includes habitat banking under the U.S. Endangered Species Act. However, wetland and stream mitigation banking pursuant to Section 404 of the U.S. Clean Water Act are classified under watershed protection because the principal regulatory basis for these markets is the protection and regulation of water quantity and quality. ¶These numbers refer to the total size of the global market for eco-certified forest and agricultural products. Some unspecified fraction of this total amount can be considered the premium paid by consumers for the eco-friendly means of production. Biodiversity conservation is the ecosystem service most strongly associated with consumer demand for eco-certified production, but such production can also support watershed protection and carbon sequestration. #United Nations Framework Convention on Climate Change projects registered under the Clean Development Mechanism: http://cdm.unfccc.int/Statistics/Registration/RegisteredProjByScopePieChart.html. ††The vast majority of this market volume is attributable to wetland and stream mitigation under Section 404 of the U.S. Clean Water Act. However, this figure includes only mitigation commitments satisfied by off-site banking and in-lieu payments. It excludes mitigation implemented by land developers themselves, which generally does not involve an ecosystem service payment or market transaction.