Ecosystem Services and the Value of Land

Abstract

"The concept of clear title to land is much more recent than is generally recognized in the United States. Less than 200 years ago, the basis of property rights for land was still being worked out, including the details of surveying, appraisal, and legal language for deeds. The transformation of the relatively abstract notion of land ownership into a precisely measured quantity recorded in a legal instrument was quietly revolutionary. Title to land serves as a fundamental element of our economic system—delineated ownership of land serving as collateral for borrowing—but it is such a commonplace element that it is largely taken for granted. While clear title solidified the value of land as a place to build on, it also augmented value of land as a place from which to take resources. Though natural resource harvesting and extraction is ancient human behavior, modern forms of property rights have facilitated enormous investment and wealth creation. One example of the way in which policy regarding land ownership determines a pattern of wealth creation comes from the gold rush era, when questions of measurement were central to the legal and physical conflicts that shaped the settlement of the American West. The concept of ecosystem services—the financial value of the measurable productivity of natural systems—represents a third way of valuing land and rewarding private landowners and land managers. As with real estate and natural resource extraction, ecosystem service revenue depends on the transformation of an abstract notion of ownership through the application of science. Measurable units of ecosystem service production that support climate stability, water quality and biological resiliency are the basis for a revolution in our understanding of value that has profound implications for policy and for investment."