Valuation of soil health ecosystem services. Vermont Payment for Ecosystem Services Technical Research Report #5

In this report, we present estimates for ecosystem services from soil health using two approaches for four different services. One approach generates estimates based on soil-health practices, and the other approach is based on improvements in soil-health indicators. For soil- health practices, such as adopting best-management practices on annual corn, we utilize a set of off-the shelf empirical models widely used to estimate ecological functions on farm landscapes. For soil-health indicators, we make estimates by linking these tools with soil data and statistical models describing how soil-health parameters influence the interaction of soils with water and their environment. We provide rough monetary estimates of the value of these services, using several different standard ecological economics methods. These results are necessarily rough but can help to elucidate the relative magnitudes of different types of benefits. For millennia, farmers have recognized the importance of soil health for crop productivity and resilience. Recently, scientists, policy-makers, and farmers have become interested in the non-agricultural benefits of healthy farmland soils. Healthy soils can support climate mitigation through carbon sequestration, protect the health of waterways by retaining nutrients and sediments, protect downstream communities by absorbing water and protect the air by regulating gaseous emissions. These and other ecosystem services provided by healthy soils may meaningfully contribute to the health and vitality of communities and ecosystems. In recent years, farms have struggled financially and awareness of environmental problems have grown. Policy-makers worldwide have sought ways to compensate family farms for their environmental stewardship as a means to tackle both these problems. Farmers have organized under the banner of “regenerative agriculture” to experiment with new practices and promote values provided by healthy soils far beyond the farm. Vermont is well-positioned to become a leader in this movement; family farming and environmental stewardship are central to our collective identity and economy. There have been several efforts to develop a policy framework for soil stewardship, but none have succeeded. In 2019, Act 83 of the Vermont Legislature created a working group to explore payments for ecosystem services as a framework for linking farm supports and environmental stewardship. This report was commissioned as part of this effort. To design a program to promote soil ecosystem services, it is necessary to generate an estimate of the magnitude of each of the benefits. If we understand the scale and value of benefits, we can then judge the cost-effectiveness of such a program compared with alternatives, such as investments in other natural systems like forests and wetlands, or investments in hard infrastructure. Because improvements in natural systems can affect many different things we care about, putting total benefits in dollar terms helps us to combine different types of benefits and to assess which benefits are largest