Lauryn Sherman

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The State of Vermont has been working on designing a payment for ecosystem services (PES) system that would hire farmers to improve watershed function as a strategy to moderate and adapt to climate change.[1]  This paradigm recognizes that deep topsoil can provide “flood protection, clean water, food security, and climate resilience and mitigation.”[2] The State and other parties would invest in rebuilding the land’s capacity to provide these services, much like it would invest in rehabilitating physical infrastructure.[3] 

Managing trade-offs to produce ecologically robust results requires an adaptive,[4] proactive,[5] watershed-scale[6] approach.  To achieve this, legislators will need to navigate a matrix of existing programs and regulations,[7] and succeed in engaging local actors in a holistic approach where federal top-down approaches have previously failed.[8]  Vermont’s legislators will need to correctly answer what a system should pay for, how transactions in such a regeneration market could work, and who should lead decision-making on the land. 

This Note attempts to assist the Legislature in answering those questions. Part I provides a basic overview of the relationship between soils, watersheds, and ecological resiliency.[9] It summarizes farmer-led initiatives to develop the technological tools to provide watershed services[10] and the Vermont Legislature’s attempts to address the issues thus far.[11] Part II addresses what a state system for land-based climate solutions should pay for. It argues for swapping the language of PES with a more holistic concept, Services to Ecosystems (S2Es).[12]  It also proposes draft language for a Purposes section that the Legislature might adopt. Part III discusses how a system should ideally compensate S2E’s, arguing that the state should use performance-based contracts as a mechanism to keep expenditures local and tied to the land and to the cost of performing restorative or regenerative work on the land.[13]  Part III also explores some potential features of performance-based contracts, comparing this concept to contracts used for general contracting in the construction industry.[14]

[1] See 2019 Vt. Acts & Resolves 83, 3, https://legislature.vermont.gov/bill/status/2020/S.160 (directing the Secretary of Agriculture to convene a “Soil Conservation Practice and Payment for Ecosystem Services Working Group”).

[2] Vermont Agency of Agriculture, Food and Markets (VAAFM), Soil Conservation Practice and Payment for Ecosystem Services Working Group Report 2 (Jan. 2020), https://legislature.vermont.gov/assets/Legislative-Reports/Soil-Conservation-Practice-and-PES-Working-Group-Report-01152020.pdf.

[3] See, e.g., Abe Collins, ‘Tools for Deep Topsoil Watersheds,’ YouTube (Feb. 23, 2018), https://www.youtube.com/watch?v=Z1zU5NM2bVw (outlining the concept and significance of “hiring” farmers to grow natural capital infrastructure). See also Genevieve Bennett & Franziska Ruef, Alliances for Green Infrastructure: State of Watershed Investment 2016, Forest Trends’ Ecosystem Marketplace (2016), https://www.forest-trends.org/wp-content/uploads/2017/03/2016SOWIReport121416.pdf (“The diversity and often local scale of such watershed investments sometimes obscures their true impact: while there is no unified market for transactions for watershed protection. . ., the value of these transactions is an order of magnitude larger, reaching nearly $25 billion (B) in 2015.”) (emphasis adjusted) (footnote omitted)

[4] See Robert L. Fischman and Jillian R. Rountree, Adaptive Management, in The Law of adaptation to climate Change: U.S. and International Aspects 19–43 (Michael B. Gerrard & Katrina Fischer Kuh eds., 1^st ed. 2012) (discussing the concept of adaptive management for overall ecosystem health.).

[5] Debra L. Donahue, Agriculture and Forestry, in The Law of Adaptation to Climate Change: U.S. and Int’l Aspects 351–439, 355 (Michael B. Gerrard et al., eds. 2012).

[6] See, e.g. Okanagan WaterWise, Brock Dolman – Slow it. Spread it. Sink it!, YouTube (May 25, 2012), https://www.youtube.com/watch?v=wSxvl6GfNZo (opening a lecture with the notion that water is the foundation of life and that water is a determinant of carrying capacity).  See also Brad Lancaster, Rainwater Harvesting for Drylands and Beyond 41–43 (2^nd ed. 2013) (defining watersheds and describing how sub-watersheds are nested withing larger and larger watersheds). See also Philip M. Glick, U.S.D.A, The Soil and the Law, in Soils and Men: Yearbook of Agriculture 1938, 299 (1938) (“Nature has divided the United States into 76 major drainage basins or water-sheds. An excellent case can be made out, therefore, for organizing each of these drainage basins into a single soil conservation district.”).

[7] See Donahue, supra note 5, at 360–361 (listing existing programs at the federal level); see also See Ryan Patch, Vermont’s Agricultural Water Quality Regulatory Framework & Programs, VAAFM (Sept. 30, 2019), https://agriculture.vermont.gov/sites/agriculture/files/documents/Water_Quality/PES/AAFM-PPT-Regulatory-Structure.pdf (listing existing programs and regulations at the state-level in Vermont).

[8] See Rebecca W. Thompson, “Ecosystem Management”—Great Idea, But What Is It, Will it Work, and Who Will Pay? 9 Nat. Res. & Environment 42 (1995) (summarizing various efforts to implement whole-ecosystem management approaches at the federal level—at the White House, through BLM, through the Forest Service).

[9] See, e.g., Biodiversity for a Livable Climate, Walter Jehne – The Soil Carbon Sponge, Climate Solutions and Healthy Water Cycles, YouTube (Apr. 29, 2018), https://www.youtube.com/watch?v=123y7jDdbfY (demonstrating the concept of the soil carbon sponge).

[10] See Champlain Valley Farmer Coalition (CVFC), Franklin-Grand Isle Farmer’s Watershed Alliance & Connecticut River Watershed Farmers Alliance, Pilot Project Letter 1–2, 2019 Sess. (Vt. 2019), https://legislature.vermont.gov/committee/document/2020/8/Date/2-14-2019#documents-section (follow link under “Farm Watershed Groups” titled “Pilot Project Letter”) (expressing unity among 221 farms, representing 122,000 acres through three Farm-Watershed organizations to produce quantified watershed ecosystem services to address climate change, water quality problems, and food security in Vermont); See Champlain Valley Farm Coalition et al., A Proposal to Explore how to Value Agriculture Ecosystem Services in Vermont 1–4, 2019 Sess. (Vt. 2019), https://legislature.vermont.gov/committee/document/2020/8/Date/2-14-2019#documents-section (follow link under “Jeff Carter” titled “A proposal to explore. . .”) (detailing a multi-year plan for phases, costs, and planned outcomes of their proposed PES pilot project).  See also Vermont Agency of Agriculture, LIVE: Joint Committee Hearing on Climate Change and Farming, Facebook (Jan. 25, 2019, 10:01 AM), https://www.facebook.com/vtagencyofag/videos/395098944397760/ (video recording of hearing) (testifying on behalf of a climate-smart agriculture framework).

[11] Vt. Acts & Resolves, supra note 1, at 3.  See also Soil Conservation Practice and Payment for Ecosystem Services Working Group, State of Vermont: Agency of Agriculture, Food, and Markets, https://agriculture.vermont.gov/pes (last visited Apr. 18, 2020) (providing the final report and full record of the PES Working Group’s meeting materials).

[12] See C. Comberti, T.F. Thornton, V. Wyllie de Echeverria & T. Patterson, Ecosystem services or services to ecosystems?  Valuing Cultivation and Reciprocal Relationships Between Humans and Ecosystems, 34 Global Envt’l Change: Hum and Pol’y Dimensions 247, 247 (2015), https://doi.org/10.1016/j.gloenvcha.2015.07.007 (defining Services to Ecosystems’ (S2E) as “actions humans have taken in the past and currently that modify ecosystems to enhance the quality or quantity of the services they provide, [while] maintaining the general health of the cognized ecosystem over time.”) (emphasis removed).

[13] See, e.g., Karen D. Holl, Primer of Ecological Restoration 7–17 (Island Press 2020) (listing the costs that restoration project funding needs to cover, including salaries, stakeholder coordination, project management, equipment, materials, transportation, and others.)

[14] See Carina Y. Enhada et.al, Fundamentals of Construction Law 19 (ABA 2001) (“The construction industry, perhaps more than any other field, abounds with pre-printed form contracts.”).