Goats grazing in a field

Payment for Ecosystem Services

Ecosystem Services Research and Soil Health


Overview of Ecosystem Services Research

Ecosystem services is a term that finds it roots in the disciplines of ecology and economics. It developed in contemporary literature as authors wrestled with the question of how natural resources and the processes they support should be considered within economic frameworks. Several terms similar to ‘ecosystem services’ started to be used in the 60’s and 70’s, such as ‘nature’s services’ and ‘natural capital’. However, the first authors to use the exact term ‘ecosystem services’ were Ehrlich and Ehrlich in 1981. At this time, the concept was mainly used in academic settings as a teaching tool and had not entered the regulatory lexicon, let alone general public use.

That changed in 1997 when the publication of a major paper attempting to value global natural capital and ecosystem services. Finding that even with the crude measurements used at the time, the value of global ecosystem services was likely much greater than the global economy, this paper generated international interest in the concept of ecosystem services and kicked off several decades of academic and government interest.

At the time, the authors defined ecosystem services as “…the benefits that human populations derive, directly or indirectly, from ecosystem functions,” Costanza 1997. Since then, multiple competing definitions have emerged in the literature, often tweaked to address specific environmental or economic considerations. Braat et al. compiled a few such definitions and their sources:

  • Ecosystem Services are the conditions and processes through which natural ecosystems, and the species that make them up. sustain and fulfill human life. Daily 1997
  • Ecosystem Services are the benefits human populations derive, directly or indirectly, from ecosystem functions. Costanza et al. 1997
  • Ecosystem Services are the benefits people obtain from ecosystems. WRI 2005
  • Ecosystem Services are components of nature, directly enjoyed, consumed, or used to yield human well-being. Boyd and Banzhaf 2007
  • Ecosystem Services are the aspects of ecosystems utilised (actively or passively) to produce human well-being. Fisher et al. 2009
  • Ecosystem Services are the direct and indirect contributions of ecosystems to human well-being. TEEB Foundation 2010

Since its popularization, the concept of ecosystem services has made it into a number of major environmental and economic projects. The Millenium Ecosystem Assessment (MEA) conducted under the United Nations Environment Programme is one such example as is The Economics of Ecosystems and Biodiversity project (TEEB) created by the European Commission. Eventually an effort was made to create a uniform set of classifications for ecosystem services via the Common International Classification of Ecosystem Services (CICES). These were meant to ensure scientific validity of classifications and enough standardization to be useful for natural capital accounting projects. The U.S. Environment Protection Agency created its own, similar classification systems, the Final Ecosystem Goods and Services Classification System and the National Ecosystem Services Classification System. See Costanza’s side by side comparison of classification systems below.

It is important to remember that defining and classifying ecosystem services is a different task than valuing and or managing for maximum ecosystem services. Many classifications give us a theoretical understanding of the service, but significant challenges in measuring them on the ground in any given context still exist. Further, assigning economic or other diverse types of value a specific measured service presents its own challenges, which can be further complicated if certain types of natural capital produce multiple services.


Costanza, R., De Groot, R., Braat, L., Kubiszewski, I., Fioramonti, L., Sutton, P., Grasso, M. (2017). Twenty years of ecosystem services: How far have we come and how far do we still need to go? Ecosystem Services, 28, 1-16. doi:10.1016/j.ecoser.2017.09.008

Costanza, R., dArge, R., de Groot, R., Farber, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., Oneill, R.V., Paruelo, J., Raskin, R.G., Sutton, P., van den Belt, M., 1997. The value of the world’s ecosystem services and natural capital. Nature 387 (6630), 253–260.

Gómez-Baggethun, Erik, et al. “The History of Ecosystem Services in Economic Theory and Practice: From Early Notions to Markets and Payment Schemes.” Ecological Economics, vol. 69, no. 6, 2010, pp. 1209–1218., doi:10.1016/j.ecolecon.2009.11.007.

Braat, L.C., de Groot, R., 2012. The ecosystem services agenda: bridging the worlds of natural science and economics, conservation and development, and public and private policy. Ecosyst. Serv. 1 (1), 4–15.

Literature Review

Policy Implications of Ecosystem Services Research for U.S. Agricultural Soil Health: An Annotated Bibliography


Healthy soil is integral to sustainable farms and a stable climate. Humans derive a variety of benefits from agricultural soils, both direct and indirect. Through photosynthesis, plants use sunlight to produce glucose from carbon dioxide and water, converting light energy from the sun into chemical energy for food.

Through this natural energy conversion process, carbon is removed from the atmosphere and sequestered in soil. Soil carbon contributes to healthy soil structure that prevents erosion, facilitates water infiltration, and provides protection from both flooding and droughts. Soil organic matter also provides soil fertility by fixing nutrients like nitrogen and phosphorus, necessary for plant growth. Further, the sequestration of carbon in soils reduces the amount of greenhouse gases in the atmosphere that are accelerating global warming and climate change. Improving agricultural soil health can also reduce the energy intensity of farming, directly by decreasing emissions and indirectly by reducing the amount of fertilizers and pesticides, which are energy intensive to produce. Finally, soil health practices can increase agricultural productivity and reduce threats to crop yields like floods, droughts, and pests. Accordingly, soil health has direct economic, environmental, and public health implications for whole landscapes and communities that rely on a clean water source, nutritious food, and a livable climate.

Agriculture is responsible for approximately 10% of total greenhouse gas emissions in
the United States (www.epa.gov). Globally, agriculture and working lands (including forests, croplands, and grasslands) contribute roughly 24% of global emissions. Agricultural emissions are primarily
attributable to enteric fermentation (methane from digestive systems of ruminants) (40%),
manure left on pasture (16%), synthetic fertilizers (13%), rice cultivation (10%), and manure
management (7%) (www.fao.org). Unless agricultural and land-use sectors undergo significant reform, global agricultural emissions are projected to rise 18% by 2030 and 30% by 2050. Research strongly suggests that the agricultural sector can practically transition to climate-friendly production by
decreasing emissions and increasing soil carbon sequestration, and that healthy soil is the key to
this transition. Globally increasing the amount of soil carbon annually by just 0.4% “would
remove an amount of CO2 from the atmosphere equivalent to the fossil-fuel emissions of the
European Union (around 3-4 gigatonnes (Gt)).” See Rumpel, C., et al. (2018). Put more carbon in soils to meet Paris climate pledges, Nature, 564, 32-34. Further, increasing soil organic matter on agricultural land need not jeopardize farm productivity. Research shows that a 0.4% increase in
soil carbon has been shown to increase crop yields by 1.3%. See Rumpel, et al. (“In studies across Africa, Asia, and Latin America, increasing soil carbon by 0.4% each year enhanced crop yields by 1.3%.”).

The laws and policies – local, state, regional, national, and international – that influence
food systems, agricultural markets, rural economic development, energy and climate initiatives,
and environmental protection, play an important role in agricultural soil health as well.
Governments can support the transition to a regenerative agricultural economy by recognizing
that soil health is both good environmental policy and good farming. Increasingly, governments
around the world are recognizing opportunities to address climate change in the agricultural
sector. Policy design often focuses on market-based solutions to address the externalities
associated with environmental costs of harmful farming practices. While many other
opportunities exist for government action, this bibliography focuses primarily on government
and market-based conservation programs that aim to reconcile agricultural production with
environmental stewardship. The scope is further limited to literature within frameworks of
ecosystem services theory and agri-environmental schemes.

The sources included in this annotated bibliography were gathered from Google Scholar, Agricola, ProQuest, and Web
of Science, based on search inquiries for “ecosystem services”, “payment for ecosystem
services”, “agri-ecosystem services”, and “agri-environment schemes”. Some literature on
beneficial soil management that does not use this language is included as well, to provide useful
background and terminology. Sources are mostly peer-reviewed, with the addition of a few
useful non-peer reviewed reports. Inclusions are classified by sub-topic, and open access
research is indicated for freely accessible sources, with links provided where available.
Keywords are included to assist with searches within this list.

The purpose of this bibliography is to provide a selection of literature that informs
analysis of policy support for agricultural soil-based ecosystem services, and does not represent
an exhaustive list of sources. If readers have recommendations of research (existing or
forthcoming) for inclusion in this bibliography, please email .


Ecosystem Services: Theory and History

These sources are peer-reviewed journal articles and reports on ecosystem services theory,
science, and practice. There are articles on the historical development of the field of ecosystem
services, the different definitions of the term, and overviews on classification and valuation
methods. There are also some sources that critique the concept, call for further research on areas
within the field, and provide case studies or propose opportunities for implementation.

Ecosystem Services: Approaches to Classification

While classification methods are discussed in sources included elsewhere in this collection, these articles specifically focus on ecosystem services classification approaches. These sources are peer-reviewed journal articles that present comparative analyses of different methods, propose harmonizing analyses of contrasting approaches, or offer new frameworks for classification.

Ecosystem Services: Valuation

These sources are peer-reviewed journal articles that present comprehensive discussions
of valuation of different ecosystem services and compare approaches to valuation. While these
articles focus on valuation, some also include useful information about different aspects of
ecosystem services theory and opportunities for implementation in practice. In addition to
analyses of valuation methods, there are also a few sources below that draw conclusions about –
and present economic numbers to represent – the values of specific ecosystem services.

Payment for Ecosystem Services

The sources in this section specifically focus on payment for ecosystem services, payment for
environmental services, and ecological compensation. Articles and reports included here are only
those that expressly use some or all of this terminology. In the next section, Agri-environment
Schemes, there are additional sources that discuss the use of ecosystem services theory to
develop payment programs, but use distinct terminology and frameworks.

Agri-Environment Schemes

Similar to the Payment for Ecosystem Services section, these sources discuss payment programs and market applications of the ecosystem services concept and framework. Articles included here are peer-reviewed and are a result of search inquiries for “agri-environment scheme.” A few of the sources also discuss payment for ecosystem services in the context of agri-environmental policy.

Agriculture: Management and Policy

These sources range from scientific literature on the particular benefits of managing for soil
health on farmland to the state of agricultural food systems nationally and impacts on climate,
food economies, and ecosystems. Articles in this section do not necessarily discuss ecosystem
services, payment for ecosystem services, or agri-environment schemes, but some do include this
terminology in the broader context of agricultural management and policy.

Agricultural Ecosystem Services

These articles are peer-reviewed sources that discuss the concept of ecosystem services in the
particular context of agricultural management. Some articles highlight the benefits of managing
for ecosystem services on farms – both for farms and for surrounding landscapes and
populations. Other articles include topics such as policy implications of agricultural management
for ecosystem services, specific types of ecosystem services relevant to agriculture, and
agricultural impacts on ecosystem services over time.

Payment for Ecosystem Services in Agriculture

These articles discuss payment for ecosystem services in the agricultural context. Articles
include theoretical analysis as well as case studies and policy discussions.

Soil Health in Agriculture

These sources focus specifically on soil health in the context of agriculture. These articles and
reports include a range of analyses on topics like benefits of soil health to agriculture,
agricultural harm to soil health, the need for – and examples of – policy support for soil health in
agriculture, and comparison of different approaches to supporting healthy soil management on

Soil and Ecosystem Services

Soil and Carbon Sequestration

Federal Policy

These few articles are separately delineated for their specific focus on United States Federal
policy. They are either about ecosystem services in the context of federal policy or about national
agricultural policy.