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Financial Mechanisms

Meeting on Payment for Ecosystem Services

21 Jun 2004

On 21 June 2004 IES Director, Wouter Veening, participated at the Forest Trends meeting at EC-LNV in Ede, The Netherlands on Payment for Ecosystem Services.

The question of how to broaden and diversify the financial basis for sustainable forest management, nature conservation and resource management has come on the research, policy and development agendas in a more prominent way.


A major problem in adequate ecosystem management is that actual revenues are basically limited to sales of a limited number of products and services, like timber, specific non-wood products and occasionally tourism and recreation; many other services provided, like biodiversity, regulation of water regimes, soil protection, carbon sequestration ("green services") eco-tourism are often not (adequately) paid for.

The lack of recognizing the values of - and adequate payment for - these services leads to a situation where sustainable ecosystem management is financially not competitive to less sustainable uses, at least in the short term. This calls for development of mechanisms and framework conditions that ensure an adequate internalization and equitably sharing of costs and benefits of sustaining these ecosystem goods and services among the stakeholders. In recent years, practical and valuable experiences in developing these kinds of mechanisms are emerging.

During the presentation by Forest Trends special attention was given to the activities of the so-called Katoomba Group. The group was established in April 2000 in Katoomba, Australia and consists of representatives of forestry and finance companies, environmental policy and research organizations, governmental agencies and influential private and nonprofit groups. The main objective is to advance and develop innovative new approaches to conserving the world's forests using market-based mechanisms. The group emphasizes strategic partnerships to help launch sustainably-produced forest products and services, by building understanding about market-based instruments and providing technical support to pilot projects.

In October 2004 the Katoomba Group will launch a web-based Clearing-House mechanism on ecosystem service markets, called The Ecosystem Marketplace.

For further information on the Katoomba Group, see

The meeting aimed to explore possibilities for coordination and collaboration in this field and called on participants to report on their action in this field. A summary of these activities are posted on:

The Platform for Economic Valuation of Nature (Mishka Stuip) is acting as the focal point to explore the need and possibilities of a better exchange of information and networking among Dutch organizations regarding the theme, including the linkage with the international initiatives.

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