From the 2020 NACD Annual Meeting. New tools and strategies are being used to determine the values of ecosystem services on working lands. Learn how to build a market-based approach to promoting land stewardship through the Ecosystem Services Market Consortium.

1. Introduction to Ecosystem Services Markets
Prepared for National Association of Conservation Districts (NACD)
Bruce Knight, Strategic Conservation Solutions

2. What is an ecosystem service?
CARBON IN THE SOIL GHG’S AVOIDED,
DESTROYED OR
SEQUESTERED
WATER QUALITY WATER QUANTITY FLOOD RISK REDUCTION
WETLANDS BANKING BIODIVERSITY/HABITAT

3. ESMC MISSION
“To advance ecosystem service
markets that incentivize farmers
and ranchers to improve soil
health systems that benefit
society.”

4. 2017
NRI multi-stakeholder
convenings to assess
market-based
ecosystem service
opportunities for
agriculture
2018
ESM strategic &
infrastructure
development for
national ESM program
2019
ESM Consortium
formed to build ESM
market, invest in
tech, research for
2022 national market
launch
44
ESMC History: Highlights
2020
Achieve scale in
priority regions and
production systems
through continued
expansion of
protocols and pilots

5. ESMC Commissioned a Demand Side Report:
IHS Markit Economic Assessment
Estimated Total Volume & Value of Carbon &
Water Quality Markets
 A combined market for ecosystem service
assets exists
 Credits can be stacked (supply) &/or
disaggregated (demand)
 Benefits to agriculture & society can be
measured, documented
 September 2019: Report Release
5
Volume Value ($bil)
Carbon (vol in MMt Co2e) 190 5.2
Water Quality (vol in bil pounds)
Nitrogen 1.58 4.8
Phosphorous 0.8 3.9
Total 13.9
Demand
Credit Type

6.  Modular protocol components quantify 3 ecosystem service attributes over 2 tiers
 Meet corporate Scope 1, 2 & 3 GHG & water risk accounting & reporting needs (to be certified during piloting)
 Additional attributes, production systems, geographies easily adapted
6
Corporate
Scopes
Addressed
Modular Environmental Assets (Credits) Generated by ESMC
Carbon Water Quality Water Quantity
3
(supply chain)
Carbon Insets
Agricultural Water Quality
Protection Certificates
Water Efficiency Credits
1, 2
(direct, indirect) Carbon Offsets Credits Water Quality Credits N/A
Tiered, Modular Protocol Design

7. ESM Demand: Corporate Scope 1, 2 & 3
GHG Inventories & Annual Reporting
7
H2O Risk in
development

8. STRICTLYCONFIDENTIAL
• Farmers will select an entity of their choice to receive boots on the
ground assistance to guide them through the process of ESMC
participation.
• Ex. Local Conservation Districts, Conservation Partners and crop
• Brands and Retailers -- General Mills, Danone, Mars etc.
Who will producers work with?

9. What will producers have to do?
It’s not
business as
usual 
Conservation
practices,
management,
agronomic advances
Ongoing efforts with
cover crop and no-till
practices will count
toward a producer’s
ability to sequester
carbon and get paid.
USDA program
enrollment will count
as well.

10. STRICTLYCONFIDENTIAL
• Currently, only private lands are eligible for enrollment
• Both producer owned and cash rented land can be enrolled
as long as both parties are willing to sign the contract
What land is eligible?
• Payments are made on outcomes, carbon stored or avoided
on an annual basis and cumulative basis

11. STRICTLYCONFIDENTIAL
• Producers will sign a 10-year contract and must demonstrate they
have control of their land and the assets associated with it
• Ex. Water quality, water quantity and carbon
How will it work?
• Soil testing at the 5- and 10-year points
• Annual survey for water quality and management
practices, and nitrous oxide (N2O) management
• Modeled results would allow annual reporting
and annual payments

12. How will producers
get paid for soil organic
carbon?
Producers will
select and pay for
an entity to pull
randomized soil
samples.
The sample will
be analyzed and
used to establish
a baseline.
Random samples
will be pulled at
5- and 10- year
marks
Samples will be
analyzed and
used to establish
payments based
on carbon
sequestration.Carbon

13. How will producers
get paid for water quality
& quantity?
Annual surveys of
efforts to improve
water quality and
quantity outcomes
will be estimated
using models
Surveys will analyze
nitrous oxide (N2O)
and energy use on-
farm
Farmers will get
paid based on actual
outcomes
Water
Quality &
Quantity

14. 14
Pilot Planning
2019-2021

15. STRICTLYCONFIDENTIALSTRICTLYCONFIDENTIAL
ESMC Funders

16. STRICTLYCONFIDENTIALSTRICTLYCONFIDENTIAL
ESMC/ESMRC Members
Founding Circle Members Legacy Partner Members
16
Tatanka
Resources

17. 17
Thank you!