Shade Trading: An Emerging Riparian Forest-Based Payment for Ecosystem Services Market in Oregon, USA

This paper describes the regulatory and compliance context for Oregon’s emerging ecosystem services (ES) market in riparian shade to meet water quality obligations. In Oregon’s market as with many other ES programs, contracts and other regulatory documents not only delimit the obligations and liabilities of different parties, but also constitute a primary mechanism through which ES service delivery is measured. Through a review of compliance criteria I find that under Oregon’s shade trades, permittees are held to a number of input-based criteria, which essentially affirm that parties comply with predetermined practices and procedures, and one ‘pseudo output based’ criterion, in which ES delivery is estimated through a model. The case presented in the paper critically engages with the challenges of measuring ES and in assessing the outcomes of ES projects. It places these challenges as interrelated and proposes that market designers, policymakers, and other stakeholders should consider explicit efficacy, efficiency, and equity targets.