Ecosystem Service Markets explained

June 18, 2019

If you've heard of carbon credits, or reef credits, but aren't sure what it's all about - read on!

An ECOSYSTEM is a geographic area where living things like plants, animals, and other organisms, as well as non-living things like weather and landscapes, work together to form a bubble of life.

Ecosystems can be very large or very small. They could be a tidal rock pool, or a coral reef. Other examples of ecosystems include rainforests, grasslands, and rivers and streams.

Human beings are part of ecosystems and we benefit from them in many ways. They give us things like clean air and water, fertile soil, and protection from natural disasters. The benefits that we get from nature are called ECOSYSTEM SERVICES.

Healthy ecosystems benefit everyone; paying for them is a way to value the work that farmers and private land managers do on our behalf.

When a dollar value is placed on an ecosystem service, and there are people to buy and sell these services, a market is created. This is called an ECOSYSTEM SERVICE MARKET.

This market recognises the important role that the environment plays in contributing to our wellbeing and economic prosperity. It is a market based approach to conservation.

There are ecosystem service markets being developed all around the world. Carbon farming is an example of an ecosystem service market.

Carbon farming is simply farming in a way that reduces greenhouse gas emissions, or captures and holds carbon in trees and soils. Carbon polluters counteract their carbon emissions by purchasing carbon credits. A market is formed between these buyers and sellers that deals in the trading of carbon credits.

REEF CREDITS is another example of an ecosystem service market. Reef Credits pay farmers to prevent pollution from fertiliser, pesticides and sediment.

Reef Credit projects generate income for farmers when they change farming practices to reduce pollutants entering waterways and flowing to the Great Barrier Reef.

Farmers’ projects are audited and payment is based on actual achievements. It’s a way of putting value on private efforts to reduce impacts on the Reef.

Reef Credits provide certainty for both landholders and investors. Landholders are able to earn diversified and regular income over a 10-25 year timeframe, and investors get quantified and verified results for their money.

Reef Credits are an attractive investment option for governments, corporate entities and philanthropists who want to help protect the Reef. Credits are only issued when results are delivered and audited, guaranteeing that investors are buying real improvements in water quality.

It's expected that the first Reef Credits will be issued in September 2019.

For more information phone Patrick McArthur, Agribusiness Extension Officer on 0412 719 392 or email