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Governor O’Malley Releases Final Report On Market-Based Approaches To Recovering Ecosystem Services

State efforts to offset environmental impacts could create green jobs, spur green economy

Annapolis, Md. (October 14, 2011) - Governor Martin O’Malley today released a State assessment of ecosystem services and markets in Maryland, prepared by the Ecosystem Services Working Group. Expanding upon the group’s interim report released in January, this final report provides an overview of current market conditions and identifies changes in existing programs that, if implemented, will actively promote market-based activities, encourage private businesses and citizens to play a larger role in conservation and restoration, and improve the State’s ability to compensate for lost environmental benefits.

“An efficient ecosystem marketplace can help create jobs and spur our State’s growing ‘green’ economy,” said Governor O’Malley. “Together, with our public and private partners, we have found that this kind of tool has the potential to provide a cost-effective means to offset the impacts of development, and better protect our natural resources for future generations.”

The study was launched to address the fact that the full value of Maryland’s ecosystem services are not being adequately replaced as a result of land use changes, as evidenced by the health of the Chesapeake Bay and other environmental indicators. For instance, although Maryland has one of the most protective forest conservation laws in the nation, the State continues to lose approximately 7,000 acres of forests each year to development. Further, the actual value of the lost environmental benefits of these forests is not included in the price of restoration.

The work group, which includes public and private sector representatives, examined how market options within existing programs could be used to improve the recovery and conservation of the State’s natural resources and the services they provide.

Among the Report’s recommendations is promotion of ecosystem banks to offset development; the practice of using larger restoration projects instead of smaller mitigation sites would yield both economic activity and better environmental services. For example, rather than creating a 1-acre wetland on-site to offset a service lost to development, a developer could purchase a credit to help preserve a larger 30-acre wetland bank that is integrated into the landscape.

The Report also supports expansion of banking practices across jurisdictions to offset impacts to forests, wetlands and lands within 1,000 feet of the Chesapeake and Atlantic Coastal Bays.

The Report further recommends using fee-in-lieu programs only as a last resort. Within some current programs developers can pay into an environmental restoration fund that, while easier and cheaper, does not provide market incentives to reduce negative environmental impacts. Transparency and accountability for fee-in-lieu funds is also recommended, along with future actions to value and account for the “true costs” of ecosystem services in State policymaking and practice.

The group’s initial report, released in January 2011, found that ecosystem markets can help offset impacts to natural resources, while also spurring economic growth and creating green jobs. Creating a credit system other industries willingly invest in — similar to existing carbon credit programs — will require expansion of the green economy and green industries to handle increased business, creating new jobs.

While ecosystems markets do exist in Maryland, they are not operating at their full potential. Outside the $144 billion carbon market, there are currently an estimated $16.6 billion in ecosystem services projects underway nationally, which is projected to more than double by 2020.

“We are making a concerted effort to identify market solutions to help restore the Chesapeake Bay and inject economic development plans to create green jobs,” said Maryland Department of Natural Resources (DNR) Deputy Secretary Joe Gill, who chaired the work group. “In addition to improving existing programs, we are committed to developing policies that more fully integrate the value of ecosystem services into our decision making.”

As the next step in this process, Governor O’Malley has directed his Bay cabinet agencies to work together to review the recommendations and propose an action plan and timeline for expanding ecosystem markets in Maryland.

The Ecosystems Services Working Group was established in August 2010 by DNR in response to recommendations by the Governor’s Green Jobs and Industry Task Force to assess the status of and make recommendations on how to encourage ecosystem markets in Maryland. The work group includes State environmental, agricultural, planning and economic development agencies; private environmental restoration and investment companies; and non-profit organizations that specialize in ecosystem markets and financing. For more information or to view the final report visit,

In addition to Mr. Gill, members of the Working Group include Dan Baldwin and Dan Rosen (Maryland Department of Planning); John Campagna (Restore Capital); Christine Conn, Dave Goshorn and Sean McGuire (Maryland Department of Natural Resources); Renee Fizer, Marya Levelev, Denise Clearwater and Kelly Neff (Maryland Department of the Environment); George Kelly (EBX USA); Doug Lashley (GreenVest); Dominick Murray (Maryland Department of Business and Economic Development); Dan Nees (University of Maryland); Mary Owens (Critical Area Commission); Susan Payne and John Rhoderick (Maryland Department of Agriculture); and Marianne Dise (Office of the Attorney General).

   October 14, 2011

Contact: Josh Davidsburg
410-260-8002 office | 410-507-7526 cell

The Maryland Department of Natural Resources is the state agency responsible for providing natural and living resource-related services to citizens and visitors. DNR manages nearly one-half million acres of public lands and 17,000 miles of waterways, along with Maryland's forests, fisheries and wildlife for maximum environmental, economic and quality of life benefits. A national leader in land conservation, DNR-managed parks and natural, historic and cultural resources attract 11 million visitors annually. DNR is the lead agency in Maryland's effort to restore the Chesapeake Bay, the state's number one environmental priority. Learn more at