The question of the market role for federal agencies merits deliberation and a policy decision.  Ecosystem markets should create adequate incentives for private landowners to retain working lands in production.  Markets are dynamic, and the  relationships between supply and demand change over time.  Collins observed that carbon markets are  a transition strategy, with a possible duration of two decades. 

One of the supply factors that conceivably could change during the next twenty years is the capacity of federal lands to function as a carbon sink.  Changes in the duration of wildfire  season combined with an increase in hazardous fuel loads due to insect and disease conditions contribute to an uncertain forecast for carbon sequestration capacity (see map inset of vulnerability, and link to article in Science).   Over the next two decades, the federal land sequestration capacity could decrease compared to historical levels.  An important role for OESM in market analysis is to provide a credible reporting structure that accounts for changes in ecosystem service levels of federal land.  For example, OESM staff priorities should support continued analysis by USFS researchers regarding National Forests and Grasslands, building on the national Forest Inventory and Analysis data infrastructure (FIA). 

Collins suggested an Executive Order might be the method to spur focus on Ecosystem Services and contribute to OESM's future success.  Spatial Interest suggests, in the context of forest and grassland ecosystems in particular, that the following menu items ought to be considered prior to placing that order.    Each of the suggested activities will contribute to ecosystem function without direct market trading by federal natural resource agencies:

Continue the Forest Reserves Tradition - The National Forests were created initially as forest reserves.  The land areas were excluded or reserved from homesteading.  The objectives of that Executive Order was to reserve timber for the American population, and to protect forest watershed functions.  Management of National Forests and Grasslands in the 21st century should  extend the concept of reserves to ecosystem markets.  The management of these lands ought to be held in reserve from market transactions and managed to sustain ecosystem functions for the benefit of the public.  Similar to the federal banking system's fractional reserve standards for financial capital, the National Forests and Grasslands represent fractional reserves of natural capital, retained to secure a flow of ecosystem goods and services for public benefit.

Implement National Carbon Accounting: To determine the relative contribution of the National Forests and Grasslands, FIA data should be the basis for a carbon accounting system at multiple geographic scales: national, regional, and state .  Since the FIA sampling design includes all ownership categories, the National Forest assessment will be a subset of a report for all forestland.  Periodic reporting using FIA data at a the geographic scale of individual states will be a reasonable extension of forest resource assessments currently underway.  The 2008 Farm Bill requires the state assessments in order to receive Cooperative Forestry Assistance Act funds.  In addition, the assessments support  State and Private Forestry's  program redesign that will refine allocation of taxpayer investments to priority watersheds.

Increase Biomass & Small Wood Utilization:  Forest plans and management actions on National Forests can produce tangible ecosystem goods with a carbon positive result.  Stewardship contracts that  create a physical flow of biomass  will displace fossil fuels consumed for energy production.  These management actions reduce hazardous fuels and decrease potential carbon dioxide emissions from large wildfires.  Utilization of small logs can also decrease carbon footprints if the products substitute  for alternative building materials that consume more energy to produce.  OESM should place a high priority  on these management actions.  By contrast, federal engagement as a credit supplier engages the public's forests and grasslands   in a derivatives market significantly  removed from direct economic production.  Biomass and small wood utilization will sustain the heritage of rural communities while enhancing ecosystem service capacity of federal lands.

Deter Private Forest Conversion:  The conversion of productive private forests and grasslands to alternative land uses decreases the capacity to provide services from  forest and grassland ecosystems.  In addition, real estate development in the Wildland Urban Interface places a budget and programmatic burden on federal resource agencies due to the increased fire suppression costs to protect life and property in  hazardous locations.  Funding the Forest Legacy and the Land and Water Conservation Programs should be a high priority investment that has a carbon reduction benefit.  Working lands conservation easements have an immediate impact which is sustained in perpetuity.

The four menu items comprise a tall Executive Order for the role of National Forests and Grasslands in ecosystem services.   Each is consistent with existing program and strategy documents, and they support the keynote speaker's underlying theme:  let's commit to ecosystem services as a management framework.  Ecosystem markets are a partial means to achieve the goal.