Nicholas Institute for Environmental Policy Solutions
September 2011

Stacking Ecosystem Services Payments: Risks and Solutions

Stacking Ecosystem Services Payments: Risks and Solutions

A wide variety of incentive programs and markets have arisen to pay landowners for ecosystem services--the benefits that healthy ecosystems provide, such as water filtration, biodiversity, habitat protection, and carbon sequestration. This raises questions about whether landowners can receive more than one payment for ecosystem services generated from the same parcel of land, a practice known as "stacking." This paper outlines the different types of ecosystem service credits that can be stacked, and introduces a conceptual framework that can help policy makers and project developers determine whether a stacked project is meeting the objective of replacing or enhancing ecosystem services. It also identifies three specific circumstances in which stacking can lead to a negative outcome for ecosystem services and puts forward specific policy proposals to address these issues.