Healthy watersheds provide habitats for wildlife, clean drinking water, resilient coastal fisheries and communities, and a setting for recreational activities. The Nicholas Institute for Environmental Policy Solutions is exploring innovative and traditional approaches to address watershed impacts, including sediment and nutrient pollution and degraded or impaired habitats.

Conventional accounting and assessment methods may not properly track stocks and flows of ecosystems and their services. The Nicholas Institute for Environmental Policy Solutions is developing methods to assign and incorporate these values and allow for improved management of natural resources. Current projects include the development of a database of marine economic valuations, approaches to help public water utilities account for green infrastructure, as well as a project with federal agencies to create an approach to account for ecosystem services in federal planning and management processes.

One of the main focuses of the Nicholas Institute for Environmental Policy Solutions is to find ways to protect and restore ecosystems and the many services they provide. One way the Ecosystem Services Program is fulfilling this goal is through voluntary and compliance based environmental markets. The Program currently has a number of environmental markets projects centered on agriculture, forestry, coastal habitats.

Increasingly, city governments are facing major costs for maintaining water infrastructure and water quality. Through a series of interconnected and multidisciplinary working groups, the Nicholas Institute for Environmental Policy Solutions is exploring new ideas, approaches, and governance models involved in integrating ecosystem services proactively in the urban and regional planning and policy processes, as well as the potential for this to result in better environmental and social outcomes.