January 2016 - Funding Payments for Ecosystem Services

January 2016 - Funding Payments for Ecosystem Services

Submissions are now closed.

Key Documents:

- Fall 2015 Call for Proposals
- ALI Research Grant Application, Fall 2015
- Guidelines for Grant Applications
- Report Guidelines (2015)


Alberta’s farms and ranches are known to produce high quality and large quantities of agricultural products, but are lesser known to be providers of valuable ecological goods such as, watersheds, wildlife and their habitats (Knopff & Gates, 2013). The difference between these two goods is that farmers are compensated for their agricultural products, and not for ecosystem goods and services as a market for ecosystem services does not traditionally exist. As economic pressures mount from urban centres and increased land development, accurate reflection and capture of the benefits of non-market goods and services is important to inform land use decisions. It should also be noted that private agricultural lands make up 75 per cent of the province’s agriculturally developed area, also known as the “White Zone” (Ministry of Environment and Sustainable Resource Development, 2011).

Many jurisdictions, including Alberta, have supported the provision of ecosystem services from private land (Canada West Foundation, 2012). However, generating funding to compensate landowners remains a challenge. Conservation offset programs are being explored but these mechanisms rely on a constraint such as “no net loss” or similar requirement which will not apply to many important ecosystem services (Noga & Adamowicz, 2014). Programs that provide direct funding for ecosystem services from government agencies, such as Beneficial Management Practices (BMP) in agriculture programs, are also being employed, but these programs are also relatively limited in scope (Trautman et al., 2013).

Recently a range of novel private or local community level initiatives to generate incentives for conservation or funding for ecosystem service provision on private land have been tested in Alberta and in other provinces (Knopff & Gates, 2013; South Okanagan-Similkameen Conservation Program, 2011, Delta Water Fowl, 2015). These programs include payments by hunters and recreationists for improved habitat and recreational experiences, local referenda to support the provision of local ecosystem services, and other direct funding mechanisms such as crowdsourcing and related tools. In part, these have been based on experiences in the U.S. that included crowdfunding and referenda (Hörisch, 2015;

Banzhaf et al., 2011). However, the feasibility and effectiveness of such programs in a Canadian/Albertan context and the barriers to effective implementation, remain largely unknown.

Research Questions

  • Develop an exploratory study that would address the following:

    • What has been learned from previous research and experience with direct private or local community mechanisms for compensating landowners for the provision of ecosystem services in Alberta and other Canadian provinces (such as direct payments by recreationists / hunters, local referenda and related instruments)?

    • Are such mechanisms socially acceptable? Are they supported broadly in the community or are the differences of opinion across groups in the community that may limit adoption?

    • What, if any, legal or regulatory barriers exist regarding the implementation of such private or local community direct methods of compensation?

    • Can these mechanisms result in improved ecosystem service provision?

    • Are such mechanisms economically feasible?

    • Could a pilot, or set of pilots, be designed to test and evaluate direct funding or payment mechanisms and investigate the legal and economic aspects of such mechanisms?

ALI plans to use recommendations provided in the exploratory study to develop future Calls for Proposals or to extend the project contingent on funding.

Project Objectives

  • Development of the key research questions and research design (hypotheses, experimental design, and pilots) to compare and contrast environmental, economic and social outcomes of establishing a variety of direct private or local community mechanisms for payment for landowners for the provision of ecosystem services.

  • Development of a detailed research plan outlining the process for exploring methodology(ies) to compensate landowners for the provision of ecosystem services, especially the potential source(s) of this compensation. This should include the identification of a multidisciplinary research team, research sites, resource requirements, research partners/participants and potential funding partners.

Project Period: Call for Proposals in November 30, 2015 with project completion by June 1, 2017.

Proposed Budget: A maximum of $50,000 for the first year (research design phase), and potential additional funding for subsequent years of the study. This future funding is dependent on the results of the design phase and the proposed approach.

It is expected that the selected applicant(s) will work in conjunction with the ALI to coordinate funding application(s) to potential funding partners, in addition to ALI funding, to implement a possible multi-year research program.


Banzhaf, H. S., W. E. Oates and J. N. Sanchirico. (2010). "Success and design of local referenda for land conservation." Journal of Policy Analysis and Management 29(4): 769-798.

Canada West Foundation. (2012). The Invisible Hand’s Green Thumb: Market-based Instruments for Environmental Instruments in Alberta. Canada West Foundation, Calgary, Alberta. Retrieved from

Delta Water Fowl. (2015). Delta Water Fowl: 2015 Ducks Report.

Hörisch, J. (2015). “Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives.” Journal for Cleaner Production 107: 636-645.

Knopff R. & C. Gates. (2013). “Hunting for Habitat: The Rise and fall of an Alberta Proposal for Private Production of Ecological Goods and Services.” Policy Series 146: 23pp. Frontier Centre for Public Policy.

Ministry of Environment and Sustainable Resource Development. (2011). Sustainable Forest Management: Current Facts and Statistics. Retrieved from

Noga W. & W.L. (Vic) Adamowicz. (2014). “A Study of Canadian Conservation Offset Programs: Lessons Learned from a Review of Programs, Analysis of Stakeholder Perceptions, and Investigation of Transactions Costs.” Sustainable Prosperity Research Paper, University of Ottawa.

South Okanagan-Similkameen Conservation Program. (2011). Establishing a Regional Conservation Fund in British Columbia: A Guide for Local Governments and Community Organizations.

Trautman, D., S. Jeffrey & J. Unterschultz. (2013). Beneficial Management Practice (BMP) Adoption: Direct Farm Cost/Benefit Tradeoffs. Department of Resource Economics and Environmental Sociology, University of Alberta.