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Payments for Ecosystem Services in Washington State: Understanding Stakeholder Values and Potential Coalitions in the Nisqually Watershed Services Transaction Piolt Project

Item

Title (dcterms:title)

Eng Payments for Ecosystem Services in Washington State: Understanding Stakeholder Values and Potential Coalitions in the Nisqually Watershed Services Transaction Piolt Project

Date (dcterms:date)

2014

Creator (dcterms:creator)

Eng Waters, Charissa M

Subject (dcterms:subject)

Eng Environmental Studies

extracted text (extracttext:extracted_text)

Payments for Ecosystem Services in Washington State: Understanding
Stakeholder Values and Potential Coalitions in the Nisqually Watershed Services
Transaction Pilot Project

by
Charissa M. Waters

A Thesis
Submitted in partial fulfillment
of the requirements for the degree
Master of Environmental Studies
The Evergreen State College
June 2014

©2014 by Charissa M. Waters All rights reserved.

This Thesis for the Master of Environmental Studies Degree
by
Charissa M. Waters

has been approved for
The Evergreen State College
by
________________________
Kevin Francis, Ph. D.
Member of the Faculty

________________________
Date

ABSTRACT
Understanding Stakeholder Values and Potential Coalitions in the Nisqually
Watershed Services Transaction Pilot Project
Charissa M. Waters

Payments for Ecosystem Services (PES) are used as a conservation tool to protect
ecosystem services and human well-being and to incorporate ecosystems into
economic and political decision-making. Ecosystem services provide a multitude
of economic, social, and ecological benefits. Ecosystem management crosses
jurisdictional boundaries and requires collaboration and buy-in from a variety of
government agencies, non-profit and non-governmental organizations, and
stakeholder groups. This study uses in-depth interviews and surveys to examine
stakeholder values and critical factors involved in the Nisqually Watershed
Services Transaction pilot project. Observations and analysis of stakeholders in
this PES pilot project in Washington State are used to determine if potential
stakeholder coalitions are forming around similar values and beliefs, patterns of
support or resistance, and perceptions of key stakeholders. Qualitative and
quantitative methods of data collection and analysis were used to reveal potential
coalitions, patterns in beliefs, and common perceptions of the Nisqually pilot
project. The analysis also identified specific areas of agreement or divergence in
respondent’s beliefs regarding the causes of, and potential solutions to, issues
facing PES programs in the Nisqually Watershed. These findings will assist in the
development of PES programs in Washington State by helping ecosystem
managers and decision-makers increase awareness of stakeholder values and
preferences, reveal potential coalitions, and integrate this knowledge of
stakeholder perceptions into planning, communication, and outreach strategies.

Table of Contents
List of Figures…………………………………………………………………. ix
List of Tables…………………………………………………………………… x
Acknowledgements……………………………………………………………. xi
Chapter 1: Introduction………………………………………………………… 1
Overview of thesis……………………………………………… 4
Chapter 2: Literature Review…………………………………………………… 6
Definitions of ES……………………………………………………….. 6
Theories and concepts of PES………………………………………….. 12
Evolution of PES theory and practice………………………………….. 14
Limitations of valuation……………………………………………...… 19
Quantification of ecosystem services….……………………………….. 22
Critical factors………………………………………………………….. 25
Scientific knowledge…………………………………………… 26
Institutional and market mechanisms………………………....... 27
Stakeholder Participation and Collaboration…………………… 28
Stakeholder beliefs and values…………………………………. 30

vi

Lessons from the application of PES…………………………………… 32
Context in Washington State…………………………………………… 34
Summary………………………………………………………………...39
Chapter 3: Research Methods………………………………………………….. 41
Methodology…………………………………………………………… 41
The Advocacy Coalition Framework………………………...… 43
The ACF applied to Payments for Ecosystem Services………... 50
Site Description and Context…………………………………………... 52
Collaborative watershed planning……………………………… 56
Sampling methods……………………………………………………… 63
Quantitative and qualitative data analysis……………………………… 65
Chapter 4: Results……………………………………………………………… 68
Interview results…………………………………………………………68
The role of scientific information……………………………….70
The role of institutional mechanisms……………………………73
The role of stakeholder and public involvement………………..75
Other critical factors……………………………………………78
Stakeholder communication……………………………………80
vii

Level of agreement…………………………………………… 82
Challenges and lessons……………………………………….. 83
Survey results………………………………………………………… 88
Attitudes toward Nisqually Watershed services……………… 92
Severity and causes of environmental problems……………... 94
Potential solutions……………………………………………. 96
Relative importance and preferences………………………… 98
Identifying potential coalitions………………………………………. 100
Potential coalitions for relative importance………………….. 106
Chapter 5: Discussion………………………………………………………... 108
Chapter 6: Conclusions………………………………………………………. 116
References……………………………………………………………………. 120
Appendix A: Interview Questions…………………………………………… 129
Appendix B: Survey Questions……………………………………………… 133

viii

List of Figures
Figure 1

Example of Shared Beliefs Between Coalitions

45

Figure 2

Example of Agreement on Shared Beliefs

46

Figure 3

The ACF Flow Diagram

47

Figure 4

The Nisqually Watershed

52

Figure 5

Mean Annual Hydrograph for the Nisqually River

55

Figure 6

The Puget Sound Watershed Characterization

58

Figure 7

Mean Responses across Organizations for Attitudes

93

Figure 8

Mean Responses across Organizations for Causes

96

Figure 9

Mean Responses across Organizations for Solutions

98

Figure 10

Mean Responses across Organizations for Relative
Importance of watershed services

100

ix

List of Tables
Table 1

Mean Responses across Stakeholder Groups

89

Table 2

Mean Responses across Stakeholder Coalitions

102

x

Acknowledgments
This thesis would not have been possible without all the people who contributed their
time and valuable input to this project. A very big thank you to those who took the time
to discuss the Nisqually pilot project with me and for everyone that completed my
survey, I couldn’t have done it without you. Specifically, I would like to thank Craig
Partridge for his invaluable insight, advice, and feedback. Many thanks to my professor
and reader, Kevin Francis, for advising me throughout this process and providing me
clear and detailed feedback.
I am eternally grateful to Sophie and John Bilezikian who financially supported my
graduate career through the Sara Anne Bilezikian Fellowship, which they founded in
loving memory of their daughter. Sara’s legacy for the balance of human rights and a safe
environment will remain with me in my endeavors towards the equitable and sustainable
management of ecosystems and natural resources.
Thanks to my family and friends for their love, support, and patience throughout this
process, and to my cat for countless hours of warming my lap as I sat at my desk. Words
cannot fully express my gratitude to all of you.

xi

Chapter 1: Introduction
The biosphere and diversity of ecosystems therein are all the dynamic outcome of
biological processes. These life processes on Earth are in turn dependent on the structure,
function, and dynamic composition of ecosystems within the biosphere. Air, water and
nutrient cycling, the composition of soil and the atmosphere, and other processes that
support life, are in return replenished and altered by life. The human species has buffered
the experience of living in immediate connection to the environment through
technological and cultural means, which lessen the impact the environment has on human
life styles (Millennium Ecosystem Assessment, 2003). Despite the illusions of
disconnection, humans and the human constructions (e. g., social and economic systems)
that fuel this perceived separation remain fully dependent on the services ecosystems
provide. Perhaps one of the largest and well-known demonstrations of human dependence
on (and ignorance of) ecosystem structure and function was in the Biosphere II
experiments in 1991. The extensively funded project attempted to create a self-sustaining
environment, and failed to produce ecosystems that provided the services essential for
sustained biodiversity and the consistency of elements crucial for human life (Salzman,
2006).
This experiment underscored the need for increased scientific information and
understanding of ecosystem dynamics and processes. The concept of an ecosystem as a
unit of study was first introduced by Arthur Tansley in 1935 and later grew out of the
initial workings on the Fundamentals of Ecology by Eugene Odum in 1953. The
ecosystem concept has since assimilated into new areas of research and ecosystem-based
management practices that view the environment as the entirety of complex biological
1

and physical interactions functioning in a dynamic system. Beyond discovering new
information on the intricate connections within ecosystems, it is also necessary to
communicate their status and value to the general public and policy-makers. Clearly
communicating new scientific information is needed to inform environmental
management practices that buffer the impacts humans have on ecosystems and to in turn
enhance and maintain the services ecosystems provide for human well-being.
In an ideal world, information from natural and social scientists, empirical
observations on the health of ecosystems, and reports on the benefits humans are
receiving from ecosystems would be utilized directly by policy and decision makers for
optimal management of the ecosystems upon which all life on Earth depends. This
management process would be continuously updated and adaptive to accommodate the
continuous influx of new information and scientific findings. Clearly, this is not always
the case and our world is far from ideal, which is why the need for science-based and
participatory decision making and adaptive management of ecosystems has been widely
recognized throughout the literature. Several approaches including the widely accepted
method of Ecosystem Based Management (EBM) have been proposed (Christensen et al.,
1996) to improve natural resource management practices.
The concept of Ecosystem Services (ES) compliments the well-established
method of Ecosystem Based Management that takes a landscape level and
interdisciplinary approach to land management. EBM looks at various factors involved in
a certain place such as the ecological, social, economic, and institutional interactions that
impact ecosystem structure, function, and processes. Communication can be difficult
across this wide range of disciplines, which is why the concept of Ecosystem Services
2

(ES) can provide a common language and framework that facilitates dialogue and
understanding across diverse groups with differing beliefs, interests, and ideas for
managing ecosystems (Granek et al., 2010). Environmental policy decision-making and
EBM inherently requires making trade-offs between ecosystem services and benefits to
different groups, which can result in disagreements and debates that tend to slow the
management process. Utilizing the framework of ES provides a common foundation for
negotiations, includes ecological and socioeconomic complexity, and makes clear the
connections between management choices, the provision of ecosystem services, and the
expected impacts on different groups and human well-being.
World leaders and environmental policy-makers are increasingly realizing that
valuing the worth of ecosystem services highlights their importance to human well-being
and facilitates their incorporation into economic and political systems to decrease
ecosystem degradation and improve conservation efforts (Braat & de Groot, 2012;
Gómez-Baggethun, de Groot, Lomas, & Montes, 2010; TEEB, 2010; Thiaw & Munang,
2012). The concept of ecosystem services not only provides a common language for
scientist and decision-makers, but also increases more general political support for
conservation. Presently, ecosystem services are being incorporated into economic and
political decision-making through promotion of market-based conservation methods such
as Payments for Ecosystem Services (PES) programs. Methods to estimate the economic
value of ecosystem services has been increasing along with efforts to put them on the
policy agenda (Costanza et al., 1997; Fisher, Turner, & Morling, 2009). Since the release
of the Millennium Ecosystem Assessment (MEA) in 2003, the political attention and
literature on ecosystem services has grown rapidly (Fisher et al., 2009).
3

Overview of Thesis
Ecosystem services have multifaceted connections with social, economic, and
political systems and are marked by a variety of definitions, concepts, and theoretical
frameworks. These components and theories have evolved over time and adapted to the
empirical knowledge developed through applications of the ES concept that were
designed to influence environmental policy and increase conservation. There are
important lessons that can be drawn from efforts that utilize payments or compensation to
provide incentives for the increased protection and stewardship of ES. Many critical
factors are involved in these market-based incentive methods, including scientific
knowledge, institutional mechanisms, stakeholder participation and collaboration, as well
as stakeholder beliefs and values. Stakeholder involvement, preferences, and influences
are critical to the development and implementation of ecosystem-based management.
While efforts have been made to gain a better understanding of the role of stakeholder
and public perceptions and participation in the management of ecosystems and ES, there
is still much work that needs to be done.
Through mixed methods research that utilizes in-depth interviews and survey
questionnaires, this thesis contributes to this dialogue and informs decision-making by
examining perceptions and values of a pilot Payments for Ecosystem Services (PES)
project in Washington State. A public policy framework, the Advocacy Coalition
Framework (ACF) is used to analyze stakeholder beliefs and values and to identify
potential coalitions that may influence policy change for the Nisqually Watershed
Services Transaction pilot project. This information could be used by managers to
identify similar beliefs and issues around which stakeholders may find common ground
4

and form coalitions. Using an interdisciplinary lens of environmental studies and
ecosystem-based management, combined with a public policy framework to examine
stakeholder beliefs and perceptions in this pilot project, I present a unique and valuable
addition to the existing literature. This research also addresses environmental policy and
planning needs by asking questions pertaining to preferences for ecosystem management,
potential solutions to environmental problems, and beliefs about where management
authority should reside and the best policy tools for conservation.
This thesis addresses a gap in the literature with regard to stakeholder preferences
and values for PES programs in Washington State and applies a public policy framework
to the analysis of stakeholder beliefs that has the potential to contribute to the
advancement of PES development and implementation. The findings of this case study
identify areas of divergence among stakeholder groups with regards to the cause and
severity of environmental problems facing ES in the Nisqually Watershed, which may
indicate areas for further education, communication, and consensus-building. Divergence
among stakeholder groups with regards to preferences for management and policy tools
demonstrate greater differences in preferences and potential areas of conflict that may
need to be addressed to encourage and maintain a collaborative approach for the
management of ecosystems and PES programs. This information on stakeholders is an
important consideration for managers, and understanding different beliefs, values, and
preferences may also help to develop more effective communication and outreach
strategies that in turn would increase the effectiveness of PES programs.

5

Chapter 2: Literature Review
Studying PES programs requires an understanding of ecological economics, basic
terminology, and theoretical frameworks. This literature review explores the peerreviewed literature encompassing the primary concepts, definitions, and frameworks for
PES, as well as several prominent empirical studies and critical factors contributing to the
success of PES programs. The objective of this literature review is to understand the
evolution of the concepts of ecosystem services, limitations of ecosystem service
valuation, the most effective frameworks for PES, and primary lessons from applications
of PES programs in order to identify opportunities to advance PES development and
decision-making in Washington State.

Definitions of Ecosystem Services
Due to the complex factors involved in the relationship between ecosystems and
human well-being it is critical for decision makers and managers to have common
definitions and theoretical foundations for the management of ecosystem services. There
have been a variety of proposed definitions for Ecosystem Services (Braat & de Groot,
2012; Fisher et al., 2009; Ojea, Martin-Ortega, & Chiabai, 2012; Shelley, 2011; Turner,
Morse-Jones, & Fisher, 2010), most of which are presented as alternatives and
refinements to the commonly cited definition by the Millennium Ecosystem Assessment
(MEA). The MEA definition states that, “Ecosystem services are the benefits people
obtain from ecosystems. These include provisioning services such as food and water;
regulating services such as flood and disease control; cultural services such as spiritual,
6

recreational, and cultural benefits; and supporting services, such as nutrient cycling, that
maintain the conditions for life on Earth” (MEA, 2003, p, 3). The MEA separates
ecosystem services into these general categories (provisioning, regulating, cultural, and
supporting) for ease of understanding and classification.
The MEA places human well-being central in its framework for the assessment of
ecosystems. However, it recognizes the significant importance of biodiversity as the
source of many ecosystem services and critical to ecosystem functions. The MEA also
acknowledges that ecosystems have intrinsic value beyond the services that they provide.
This intrinsic value can make it difficult for scientists and managers’ attempting the
valuation of ecosystem services because it is dependent on people’s perceptions of what
is important in the ecosystem. Decisions for ecosystem management are largely affected
by the socio-political and economic context of the place and what people value in the
environment. Understanding ecosystem services involves a landscape scale look at how
they are generated, regulated, and provided. For ecosystem managers it is not only a
question of what effect a land use change may have (i.e. how cutting a forest affects
water filtration, flood regulation and nutrient retention) but more specifically to what
degree a certain amount of (marginal) change impacts specific services like water quality.
Although the MEA definition is widely accepted and applied to ecosystem
management, several limitations have been highlighted and alternatives proposed in the
ensuing literature. Fisher et al. (2009) introduced a definition for classifying ecosystem
services (ES) that is flexible and appropriate for their various biophysical characteristics
as well as the socio-political context of a specific place. The authors claimed that the
MEA scheme is inappropriate and could lead to double valuing because some services
7

can fall under multiple classifications such as water purification and clean drinking water,
which is both regulating and provisioning. Granted, the MEA does acknowledge that
there is overlap with the functional categories of ecosystem services they use. Fisher et al.
(2009) recommended using intermediate, final services, and benefits for classification,
and argued that it is more appropriate for application in a particular policy context. The
authors defined ES as “the aspect of ecosystems utilized (actively or passively) to
produce human well-being.” (2009, p. 645).
The definition by Fisher et al. (2009) is similar to that presented by The
Economics of Ecosystems and Biodiversity (TEEB) study in 2010 that stated,
“Ecosystem Services are the direct and indirect contributions of ecosystems to human
well-being.” Both these definitions also parallel one of the earliest popular definitions by
Costanza et al. (1997) that describes ES as, “the benefits human populations derive,
directly or indirectly, from ecosystem functions” (p. 253). It is apparent that all of these
definitions share many similarities, and each of them highlight various outputs/benefits of
ecosystems, the complexity of ES as the product of ecosystem structure, function, and
processes as well as various benefits for human populations. They also emphasize that ES
research is an on-going and inherently experimental field that requires adaptability and
clear communication for the public and generators of environmental policy.
Perceived issues with the application of the Millennium Ecosystem Assessment
have been addressed by several authors that presented specific alternative definitions and
classification systems to improve the use of the concept of ecosystem services in realworld situations (Joshua Farley & Costanza, 2010; Ojea et al., 2012; Polishchuk &
Rauschmayer, 2012). Ojea et al. (2012) critically examined the problems that have been
8

brought up with applying the MEA’s definition of ecosystem services for economic
valuation. They discussed several issues they found with the MEA classification system
in these studies such as service overlapping (or double valuing) and ambiguity. The MEA
definition is perceived as ambiguous because it does not distinguish between ecosystem
functions and services provided, which makes the classification of a specific ecosystem
service difficult to determine. Ojea et al. (2012) applied an alternative classification
system based on outputs (benefits) and compared it to the MEA classification system in
several studies. The authors found conflicts in these studies between the definition of the
service and the corresponding MEA classification. They claimed that the output-based
system was more definitive and practical when applying ES valuation in the field. They
also call for more research into the definitions and classifications used for specific
ecosystem services and to use a flexible framework for valuation that is appropriate for
the context in which it is being applied. Alternatives definitions and classification
systems introduced some practical application issues with the rather vague MEA
definition and stressed the need to be context specific when valuing ES for management
purposes.
However, economic valuation and management of ecosystem services is
challenging due to the fact that most services provided by ecosystems are common goods
or public goods. Both of these concepts are similar in that it is difficult to exclude use of
the resource, like many fish stocks and large bodies of water. The difference is that the
use of a common good limits its use by others (it is rivalrous), whereas a public good is
non-rivalrous and non-excludable such as with fresh air. The example that is often cited
for common good resource issues is from the theory of the Tragedy of the Commons by
9

Garrett Hardin (1968). The tragedy of the commons dilemma depicts the grazing of a
shared pasture being over exploited by individuals acting rationally and in their own selfinterest, without regard for the long-term sustainability of the resource. There are many
real-world examples of this commons dilemma, such as the devastation of salmon runs on
the Columbia River from damming, which benefitted a few at the expense of many.
Elinor Ostrom addressed this dilemma in her 1990 book, Governing the Commons that
looked at the problem of collectively managing shared resources. Ostrom used the term
common pool resources and recommended the formation of cooperative institutions to
solve the problem rather than centralized governance structures or privatization of the
resources.
Other similar common pool resource problems in modern society include that
with forests, fresh water, and non-renewable resources like coal that have positive and
negative externalities. People tend to benefit from common and public goods whether
they pay for the service or not. This can be seen as a positive externality, in which there
are external benefits to individuals from certain practices. For instance, if a common
good such as the water filtration provided by a forested watershed is protected by laws
and regulations, there are more benefits from the conservation of this resource than
merely to those paying for it. The flip-side of this coin is negative externalities, which
appear when there are costs paid by individuals that did not choose to incur them. A
simple example of this is with air or water pollution caused by industrial activities in
which society and the general populace, not the responsible party, incurs health risks and
clean-up costs.

10

When an ecosystem is degraded to the point that it can no longer provide critical
services (e.g. crash of fish populations) and negative external effects such as pollution of
air and water are costs taken up by the public then it often becomes necessary for an
authority such as a governmental entity to manage the common resource and solve
collective action problems. Sometimes there are property rights that limit the use of a
common pool resource like a forest, or land-use can be restricted on specific parcels such
as with zoning laws. However, these regulations are often difficult and costly to enforce.
It is also possible for the public beneficiaries of a common resource to form collaborative
groups that cooperate on behalf of the whole community for mutual benefits, such as with
watershed partnerships. The management of ecosystems relies on institutional
mechanisms (legal and policy tools) that are meant to “internalize” the external costs of
the use of ecosystem services. An example of this would be requiring a polluter to pay for
the restoration of an ecosystem that was degraded as a result of their activities, or to
mitigate the impacts of proposed activities, thus bringing the environmental costs back to
the responsible party.
There are many different approaches and management strategies for altering
public actions and addressing collective action issues. A prominent interdisciplinary
author on environmental law and policy, James Salzman (2006) highlights social and
economic factors that influence environmental problems and refers to the political
strategies for management of public goods as the “Five P’s” (p. 138): payment, property
rights, persuasion, prescription and penalty. They can also be divided into regulations that
include economic penalties for non-compliance, or incentives that usually take the form
of financial rewards for desired behavior. Incentives tend to rely on persuasion, payment,
11

and education of landowners and the goal is for self-regulation. The payment incentive
approach is common in the United States and has been traditionally implemented by
government agencies at the expense of public budgets (Salzman, 2006), which is an
attempt to internalize externalities and bring the cost of conserving and enhancing
ecosystem services back to the society that benefits.

Theories and Concepts of Payments for Ecosystem Services
It makes intuitive sense that providing non-monetary or economic incentives for
the stewardship and enhanced provision of ecosystem services is often favored by the
general public over regulation and penalties for non-compliance. The concept of
economic incentives for environmental conservation has been around for a long time;
however it has more recently been combined with the concept of ecosystem services into
what is generally known as Payments for Ecosystem Services (PES). One of the
commonly cited definitions by Wunder (2006) defined Payments for Ecosystem Services
as “(1) a voluntary transaction in which (2) a well-defined environmental service (ES), or
a land use likely to secure that service, (3) is being “bought” by at least one ES buyer (4)
from at least one ES provider (5) if, and only if, the ES provider secures ES provision,
i.e.. conditionality” (p. 2). Wunder acknowledged the importance of terminology used for
defining economic incentive programs, which helps large groups and communities to
focus the goal of a PES program for a specific desired outcome.
It is important to keep in mind that PES is one of many conservation tools and
that in most cases it is utilized to boost conservation approaches by securing additional
12

funding, and aiding in the alleviation of both environmental degradation and poverty in
communities with few economic alternatives to natural resource extraction or land-use
changes (Ferraro & Kiss, 2002; Pagiola, Bishop, & Landell-Mills, 2002; Wunder, 2006).
Wunder has been an advocate of PES schemes by arguing that they can be beneficial to
both the environment and local communities while also acknowledging that they are not a
panacea, but that they are a promising conservation tool that will need patience and
experimentation to develop further.
Despite its common use, alternative terminology has been proposed to address
perceived limitations of Wunder’s (2006) definition, specifically the issue of measuring
additional conservation provided by PES programs. Sommerville, Jones, & MilnerGulland (2009) proposed a definition that refines Wunder’s to allow for a wider range of
incentive-based mechanisms and increased applicability to unique situations.
Sommerville et al. defined PES as “approaches that aim to (1) transfer positive incentives
to environmental service providers that are (2) conditional on the provision of the service.
Where successful implementation is based on a consideration of (1) additionality and (2)
varying institutional contexts” (2009, p. 2).
In Payments for Ecosystem Services (PES) programs, additionality is important
because it is the amount of additional conservation outcomes (i.e. benefits) that occurred
in relation to the expected outcomes without incentives (Sommerville et al., 2009).
Additionality is important for monitoring PES programs because it can be used to assess
the success of a specific program relative to the social and ecological goals. However,
additional benefits from PES can be very difficult to measure and requires deciding on
metrics to be used such as percent forest cover and establishing baselines prior to
13

application of the program, as well as continued monitoring throughout implementation.
Due to the limitations of scientific information and issues with measuring ES,
additionality is not often used as a concrete criterion for evaluation, but it does need to be
considered when planning a PES program in order to establish how the impacts and
effectiveness will be assessed. Institutional context is also emphasized when applying
PES, which elaborates on Wunder’s discussion of identifying the service providers,
beneficiaries, and appropriate type of incentive used for a particular context. This
highlights the importance of different contextual aspects of PES programs and the need to
be flexible when defining criteria of PES programs in order to increase the applicability
to various complex social and ecological situations.

Evolution of PES Theory and Practice
The concept of Ecosystem Services (ES) has grown since it first appeared in the
late 1970s and 1980s. Describing ecosystems in the light of human benefits and wellbeing was initially an attempt to increase public interest in conservation and show human
dependence on ecosystems by building a bridge between social and natural sciences. The
concept of ES explored the complex relationships between social, political, economic,
and ecological systems in an effort to shed light on the impacts of environmental
degradation and species extinction (Braat & de Groot, 2012; Ehrlich & Ehrlich, 1982).
ES developed as a pragmatic tool for conservationists to communicate the value of
ecosystem functions. Using the same language and emphasis on human benefits that
dominated political and economic systems, the ES concept was utilized to catalyze short

14

term policy action to more effectively address the mounting calamity of environmental
degradation and biodiversity loss (Daily et al., 2009; Gómez-Baggethun et al., 2010).
One of the earliest and well known examples of Payments for Ecosystem Services (PES)
in the U.S. comes from New York City in the 1990s when water suppliers chose to invest
in natural capital and provide clean water through watershed management rather than
building an expensive filtration plant (Salzman, 2006). The Millennium Ecosystem
Assessment (2003) emphasized the connection between humans and ecosystems and that
the entirety of a society’s capital (manufactured, human, social and natural) determines
its wealth and well-being. With the growing demand on ecosystem services it has become
imperative to assess the state of ecosystems and to invest in increasing their resiliency
and productive capacity.
The PES approach is aimed at integrating the importance of ecosystem
conservation into economic and social systems through the valuation of ecosystem
services. The ground breaking estimation of the total economic value of global ecosystem
services by Costanza et al. (1997) sparked an increase in the use of monetary valuation in
science and policy making. The extensive study on the state and importance of ecosystem
services for human well-being by the United Nations Environmental Programme
published by the MEA in 2003, included a more complex definition and classification
system and emphasized the significance of ES to society. This socio-economic framing of
environmental issues was advanced by The Economics of Ecosystems and Biodiversity
(TEEB) study published in 2010 that called for more research and empirical studies to
link economics and ecology. These milestones demonstrate the rise of the ES concept and

15

mark its continuing increase in prominence for political agendas worldwide (Braat & de
Groot, 2012; Gómez-Baggethun et al., 2010).
The growth in interest and design of various economic incentive schemes
increased political support for conservation, but also increased concern over the
commodification of ecosystem services. In many cases a purely market-based approach
may not be appropriate for tackling complicated environmental problems in real-world
situations (Gómez-Baggethun et al., 2010; Muradian, Corbera, Pascual, Kosoy, & May,
2010; van Noordwijk et al., 2012). Approaches continue to evolve because of the
experimental nature of valuing ecosystem services, the on-going study of the ecology of
ES, and the various contexts and social factors that influence land-use decisions. Most
ecosystem valuation methods have suggested refining PES to make specific programs
more appropriate for certain sociocultural settings.
The on-going development of PES systems has not only been marked by a variety
of proposed definitions and terminology but also by evolving conceptual frameworks for
improved application in various situations (Fisher et al., 2008; Muradian et al., 2010;
Sommerville et al., 2009). The refined definitions and more flexible framework discussed
previously demonstrated a reoccurring theme, the increasing acknowledgment of the need
for context-specific PES programs. Muradian et al. (2010) also introduced a framework
that considers the many complexities involved in PES and focused on issues with
different institutional and political contexts. The goal of this framework was to create a
comprehensive picture and real-world theoretical basis of PES that is more practical to
apply in a variety of context. The authors emphasized that there is a variety of PES
arrangements that all need appropriate definitions, classification systems, and local
16

institutional frameworks. In their conceptualization of PES the authors stressed the public
goods nature of ecosystems as well as the challenge of attaining public action and
cooperation.
In response to these management issues, PES focuses on altering collective and
individual behavior with the use of positive incentives in order to reduce environmental
degradation and over-exploitation of natural resources. These incentives can take the
form of direct payments or non-monetary compensations for the provision of ecosystem
services, which highlights the diversity of forms that PES schemes can take in
application. Muradian et al. (2010) group the types of PES programs based on three main
criteria. 1) How important a monetary incentive is for changing behavior and altering
land uses (just one of many driver such as cultural and social factors). 2) How direct the
transfer is (amount of coordination and intermediaries). 3) How much the ES is
commoditized and clearly tradable on a market. For example, carbon sequestration is
more easily valued and traded on an existing market than ES that are not as well backed
by science and measurements are primarily based on shared beliefs of the relationship
between certain land-uses and ecosystem service provision, such as the use of forest
cover as a general proxy for measuring and monitoring ES in Costa Rica. This PES
framework by Muradian et al. (2010) incorporates the diversity and complexity of
incentive programs. Evolving PES frameworks and alternative approaches highlight the
issue with trying to distinguish between “PES-like” programs and more “genuine” market
based PES programs. These authors suggest that it is more practical to allow PES to have
flexibility with a theoretical definition that is broader than the purely economic marketbased framework in order to increase applicability to a diversity of complex, real-world
17

situations, and to integrate PES into environmental policy tools in a specific context. In
other words, a flexible theoretical framework and context-specific approach is essential to
the integration of PES into environmental policy and the successful implementation of
these vital programs.
There is an increasing recognition and consensus among world leaders and
scientists of the importance of incorporating ecosystem services into policy and decision
making (TEEB, 2010; Thiaw & Munang, 2012). The United Nations Conference on
Sustainability that convened in Rio de Janeiro in 2012 (Rio+20) showed that there exists
an overall perspective among world environmental leaders that development approaches
are outdated and need to be fundamentally redefined. This conference emphasized the
need for policies that reinforce the concept of sustainable management of ecosystem
services and biodiversity with consideration to the specific socio-ecological context in
order to change public behaviors and recognize ES value in economic systems. Thiaw
and Munang (2012) claimed that Rio+20 shows that the global community recognizes
that a primary driver of environmental degradation is an economic failure to take into
account the value of natural capital. These authors argued that it is essential to
incorporate environmental values into government institutions and decision making in
order to expedite change. They also resolved that local communities, businesses, and
other organizations need to assimilate these ES concepts into policy and decision-making
on multiple levels, which could be dependent on the participation and support of the
general public.
The type of policy tool used should depend on the multi-faceted context and
characteristics: politically, socially, and ecologically as well as the particular
18

classification of the ES (i.e. provisioning or regulating, good or service). Kemkes, Farley,
& Koliba (2010) explained that the nature of the policy tool and whether it has high
levels of “coerciveness”, as well as other dimensions of its classification, determines its
amount of public support, effectiveness, efficiency, and political feasibility. For example,
a policy tool that is more “coercive” relies on rules and regulations and is often
appropriate to use to get industries or businesses to change their behavior or
environmental impacts, but it may not be appropriate to change the behavior of individual
private landowners and to get the support of the general public. Environmental policy
strategies need to consider property rights, the targeted audience, and use appropriate
payment types for the context and the specific ES being valued. The authors emphasized
that the low level of coerciveness of public outreach and education can give it higher
levels of political support, but that information alone may not be enough to alter
behavior. However, when public outreach and education are combined with incentives, or
some sort of payment scheme (which are also highly politically feasible due to the lower
levels of coerciveness) the effectiveness of the program can be increased. This is why
PES is considered an effective policy tool to encourage private landowners to conserve
and protect ecosystem services (Kemkes et al., 2010).

Limitations and Valuation Methods
Using an economic framework for valuing ecosystems can be useful in decision
making, but the limitations of such a tool must be recognized by managers implementing
PES programs. Obstacles and limitations are recognized by many authors, including the

19

process of economic valuation, the risk of over-commodification, and the oversimplification of the complex and non-linear nature of ecosystem services (Chee, 2004;
De Groot et al., 2012; Fisher et al., 2008; Kallis, Gómez-Baggethun, & Zografos, 2013;
Nicolás Kosoy & Corbera, 2010; Norgaard, 2010). Norgaard (2010) brought up a
common argument that, in theory, the concept of ecosystem services has helped humans
realize their dependence on nature and facilitated the inclusion of the value of ES in
decision-making. However, there remains concern that valuing ES is not a sufficient
solution for the complexity of issues that we face in social and natural systems. De Groot
et al. (2012) recently estimated the global economic value of ES but warned that most of
the value is in non-tradable public benefits and that better accounting for public goods
and services is needed for better decision making and ecosystem management.
To address concerns of commodification, there is a critical distinction that needs
to be made between monetary valuation and commodification. It is useful to quantify the
value of ES to aid in decision making. However, this should not be used for the
commodification and privatization of ES; instead it can add to both the knowledge basis
of environmental policy decisions and conservation strategies. Valuing ES can make
positive and negative externalities of ecosystems more tangible in order to internalize and
account for at least a portion of their true importance (Daniels, Bagstad, Esposito,
Moulaert, & Manuel Rodriguez, 2010; Muñoz-Piña, Guevara, Torres, & Braña, 2008).
Norgaard (2010) revealed that the concept of ES, having grown quickly into a scientific
and policy model (especially for developing countries), may have outgrown itself and
actually be harmful by continuing the over commodification and simplification of
complex natural systems. He pointed out an interesting irony with using ES to attain a
20

sustainable economy when the majority of economic institutions do not support
sustainability. This emphasizes the importance of policies that support economic and
environmental sustainability. Ecosystem service markets and PES programs are
inextricably influenced and limited by the present institutional and political settings.
The role of PES in policy stems from the need to include common pool resources
and public benefits of ES in the decision-making process for improved conservation and
sustainability (MEA, 2005; Fisher et al., 2008), which can be difficult given the inherent
uncertainties, incomplete scientific information, and difficulties of measuring ES. Fisher
et al. (2008) pointed out the importance of marginal analysis when valuing ES for policy
and economic decisions in order to quantify what the value of an ecosystem service is
based on the willingness to pay for an additional unit of that good, or to prevent losing it.
The basic concept of marginality in economic valuation can be difficult to apply for
complex ecological systems where it may not be apparent how much the change in a
certain unit of ES will affect the quantity or quality of goods provided. Other drivers of
natural resource based political conflicts include scarcity, differing beliefs and values,
scientific disagreement (and uncertainty), and policy frames (the definitions and
narratives used). Generally, the value of a resource will increase as it gets scarcer.
However, if there is not a scientific consensus on the quantification of an ecosystem
service (what should be measured and what metrics or measurement proxies to use) it
will be difficult to measure its scarcity and assess its value. Furthermore, consistent
terminology and definitions are necessary to frame and communicate issues to the public.

21

Quantification of Ecosystem Services
Assigning a value to ecosystem services has many challenges beyond scientific
uncertainty. The difficulty of economic valuation for ES lies in the term value. There are
many different aspects to valuing ecosystems including ecological, sociocultural, and
intrinsic values that are much more difficult to measure than economic value. Different
social and cultural settings will encourage different worldviews and social norms for the
value of ecosystems. It is important to consider the many different aspects of valuing ES
and to use standard definitions and methods during assessment as well as the subsequent
communication to stakeholders and decision-makers.
The primary methods of economic valuation take a top-down and utilitarian
(anthropocentric) approach that often underestimates ecological complexity and values of
ecosystems beyond a direct or indirect use for humans. For example, the approach known
as production function (PF), attempts to estimate the influence of an ecosystem service on
the production of a good (i.e. drinking water). In this case, cause-effect relationships are
analyzed between a change in the service and the output of the good (i.e. forest cover and
water quality). However, there is not enough scientific understanding and data on causeeffect relationships between ecosystem functions and the goods and services produced for
markets (Chee, 2004; Daily et al., 2000). There is also irony in this method in that it
relies on the demand for the marketed service, which influences the value assigned to that
ecosystem service from markets that do not traditionally put much value on such public
goods in the first place (Norgaard, 2000). Another approach that is widely used for the
utilitarian valuation of ecosystems is called Total Economic Value (TEV). There are two
main types of values within the TEV framework, use values and non-use values. The
22

values that are directly or indirectly used by people for production or consumption of
goods are use-values, whereas the ones not currently being used or those being conserved
are considered non-use or existence values. The ecological, sociocultural, and intrinsic
values of ecosystems are generally not explicitly considered in the utilitarian approach.
A common utilitarian approach to ES valuation, which is not as reliant on market
behavior or available scientific information, assesses the buyer’s (beneficiaries)
willingness to pay (WTP) and the sellers (ES providers) willingness to accept (WTA)
compensation for changing activities or land management practices that impact the ES.
This can be accomplished through surveys and interviews that ask direct questions
regarding how much an individual is willing to pay for a particular benefit. An obvious
limitation to this method is the potentially biased subjectivity of the information from the
surveys. Also, technical issues with the survey design include the information and
definitions that are provided of the ES to be valued, the framing of the questions, and
prior knowledge and opinions of respondents, which can all influence the results (Chee,
2004).
In contrast, contingent valuation (CV) is a method that is much more applicable to
a diversity of ES in various contexts and includes non-utilitarian (i.e. sociocultural and
intrinsic) values discussed with other value considerations in a collaborative manner.
Unlike the previous more top-down methods, CV elicits stakeholder input and embraces
a participatory process in a bottom-up approach. This valuation technique continues to
evolve and grow from the idea that issues of public goods and valuation of ES should be
addressed with public involvement and collaboration across diverse groups of
stakeholders (MEA, 2003). The goal of this group is to come up with a valuation for the
23

ES in question and is a result of similar surveys and interviews as in the WTP/WTA
method, although it is a group effort based on consensus rather than simply individual
preferences. Because of the complexity both socially and ecologically inherent in PES
programs, it is critical to encourage collaboration in the overall decision making process
and promote dialogue, adaptive learning, analysis of risk, and negotiations for the
common good. This type of participatory approach fosters public understanding, fairness,
informed decisions, and greater validity for policies. A participatory approach can be
more effective in the long-run, especially when informed by models of ecological
processes and scenario planning for predicting future outcomes in the face of scientific
uncertainty (Chee, 2004).
Through this review of ecosystem services literature related to theory, concepts,
and applications, a need has been identified for more theoretical and conceptual work.
More importantly, the literature calls for empirical studies on Payments for Ecosystem
Services program development, implementation, and evaluation in a specific context to
better inform policy decisions. Environmental policy and management decisions need to
have a sound scientific basis, but they also must consider societal values and penchants.
Common themes from the literature highlight certain factors to consider and
include in development and management of PES, including stakeholder interests and
beliefs regarding a specific issue, as well as strategies for broader outreach and altering
public behavior (Fisher et al., 2008). It is also important to consider spatial scale when
developing programs, for many ecosystem services an entire landscape (i.e. watershed) or
regional scale is often most appropriate in order to understand the diversity of cultural,
economic, ecological, and institutional factors that make up the entirety of the problem
24

area context. However, management on this scale can be difficult because it expands
beyond traditional management and jurisdictional boundaries. The complexity of
different aspects that underwrite landscape or regional level planning, ecosystem-based
management, and PES programs begs for simplification and breaking a specific problem
down into the primary contributing factors.

Critical Factors
This literature review has identified many key factors involved in the design and
implementation of Payments for Ecosystem Services programs. The aspects critical to
understanding and valuing ES, developing PES programs, and implementing them in a
particular context are highlighted here. These general categories of critical factors include
available scientific knowledge, institutional and market mechanisms, perceptions and
values of people involved, as well as the inclusion of these elements in a collaborative
process. Both scientific information and institutional settings have been discussed
previously and are important considerations for the development of PES programs. These
factors are reviewed briefly here; while the role of stakeholders is explored further to
illuminate the critical influences of human perceptions and values as well as motivations
for participation. In this context, stakeholders are considered the active participants,
individuals, organizations, and other entities that have a stake in the outcome of a specific
problem area or program.

25

Scientific Knowledge
Our knowledge of the ecology of Ecosystem Services (ES) is very limited and we
need more research on the crucial aspects of ES such as the relationships between ES
provision, ecosystem structure and functions, and ecological community dynamics
(Kremen & Cowling, 2005). Valuing ecosystem service for land use decisions needs a
sound scientific basis and understanding of the complex relationships involved in the
delivery of ecosystem services. This scientific information is vital, but it may be
imperative for some critical issues to act in the face of scientific uncertainty and use the
best available knowledge for management decisions. It is also necessary to classify the
targeted ES for valuation purposes and to establish a standard definition and classification
of ES (MEA, 2003; Ojea et al., 2012; Ghazoul et al., 2009; Shelley, 2011; Fisher et al.,
2009; Farley, 2012; Turner et al., 2010). Several alternatives to the MEA classification
system were presented in the literature review, which highlighted the need to increase its
applicability to a specific context. In addition, Costanza (2008) reasoned that the
Millennium Ecosystem Assessment framework is vague because it needs to be an
overarching framework in order to be used in a diversity of contexts and for various ES
being targeted. He argued not for the MEA system in particular, but for a pluralism of
classification systems for different purposes rather than trying to create a single system
that overlooks the complex and site specific nature of ecosystem services.

26

Institutional and Market Mechanisms
Significant relationships have been found between institutional design and
performance of PES programs worldwide (Brouwer, Tesfaye, & Pauw, 2011). The nature
of the policy tools being used by certain institutions to induce a desired behavioral
change (i.e. coercive vs. persuasive) largely determines the programs that are favored and
supported. Prominent ecological economics authors have highlighted the importance of
adapting traditional economic, institutional, and market mechanisms to ecosystems in a
comprehensive, context appropriate approach to recognize and account for the true value
of ES (Farley & Costanza, 2010). In contrast, adapting ecosystem services to traditional
economic markets that have inherent failures in valuing such public goods and common
pool resources has been argued to be inappropriate and potentially disastrous (Muradian
et al., 2010; Fisher et al., 2008; TEEB, 2010; Thiaw and Munang, 2012). Thus, the
underlying goal of ecological economics is to adapt market and institutional mechanisms
to fit ecological systems to be more sustainable for the long-term. For those involved in
developing PES programs and the essential supporting institutional and market
mechanisms, it is important to clearly communicate many details of the project to a
variety of audiences. The primary aspects to communicate and clarify include theoretical
and conceptual foundations (standardized definitions) as well as classification and
valuation methods being employed in a specific institutional, social, and ecological
context.

27

Stakeholder Participation and Collaboration
The communication of different concepts and theories of PES is central to both
the development of institutional mechanisms, the valuation of ES, and the perceptions of
stakeholders to foster common understanding and collaboration in diverse groups
(Brouwer et al., 2011; Chee, 2004; Josh Farley et al., 2010; Joshua Farley & Costanza,
2010). The complexity, interdisciplinarity, and uncertainties of PES program design and
implementation necessitate clear and open dialogue and collaboration that encourages
stakeholder participation and feedback throughout the entire process in an adaptive
management approach(Chee, 2004; R. S. de Groot, Alkemade, Braat, Hein, & Willemen,
2010; Prager, Reed, & Scott, 2012). Communication and collaboration play a crucial role
in the development of ES transactions. PES programs involve the coordination of many
different organizations and stakeholders including private land owners, government
agencies, non-governmental agencies (NGO’s), and non-profits.
Because the management of ecosystem services often requires a landscape level
approach that crosses human conceived boundaries it must involve cooperation between
land owners, natural resource managers, and other stakeholders. Landscape level
planning can be challenging and it is important to use an appropriate spatial scale for the
targeted ES (Prager et al., 2012; Wunscher, Engel, & Wunder, 2008). Encouraging
participation and collaboration throughout planning and implementation can be costly
and time consuming but is an integral part of ES management. Partnership groups such as
watershed collaborative organizations can help to lower the costs and increase the
dissemination of knowledge, social learning, and program monitoring and adaptation
(Prager et al., 2012).
28

The collaborative approach with PES programs highlights the question of what
factors influence participation of stakeholders and landowners. The traditional economic
approach focuses on financial incentives and assumes that to get a landowner to
participate they must be provided with payments that are equal to or greater (including
transaction costs) than land use alternatives such as converting forests to agriculture.
Transaction and negotiation costs also need to be taken into account when designing PES
programs and are affected by institutional and market mechanisms, which can be reduced
with a greater degree of stakeholder participation and partnerships (Gong, Bull, & Baylis,
2010; Pagiola, Arcenas, & Platais, 2005). Given the interrelatedness of social and
political relationships and program costs it is important to build trust, collaboration, and
social capital to increase program efficiency. The traditional approach emphasizes the
socio-economic status of the landowner, which has been identified as being one of the
key determinants of participation in PES programs (Arriagada, Sills, Pattanayak, &
Ferraro, 2009).
However, other motivations for participation have been identified in the literature.
In a review of a large amount of PES case studies from an institutional and social
perspective, Vatn (2010) pointed out that PES programs as a market solution to
environmental degradation, in practice do not necessarily adhere to traditional economics.
The authors attribute this primarily to the nature of ES as a common-pool resource, which
are often managed and regulated by public agencies, not standard markets. Furthermore,
critical factors in PES programs are interconnected, including institutional mechanisms
such as governance structure with stakeholder perceptions and motivations for
participation. Institutions tend to act as a rationality context for citizens and nurture
29

certain values, which by changing the framing of an issue or the perspective that applies
can effectively change the understanding of the situation and the subsequent action taken.
The motivational aspects of PES program participation are not very well studied.
Vatn (2010) explored key aspects of motivational factors, including motivations of
intermediaries, perception of stakeholders, and other motivations that influence natural
resource use. Intermediaries and non-governmental organizations (NGOs) often play
important roles in PES programs because of the amount of information that needs to be
exchanged between buyers and providers of ES. A lack of information has been attributed
to one of the reasons that providers choose not to participate (Arriagada et al., 2009) and
service buyers also need information on the use of payments and the quality of services
provided. NGOs and other intermediaries can provide this necessary information.
However, it is important to understand their motivations for involvement and monitor
their actions and the messaging, outreach strategies, and information being conveyed to
stakeholders and the general public.

Stakeholder Beliefs and Values
Perceptions of PES and key concepts can be a significant challenge to program
development and implementation. In particular, the distinction between payments and
compensation (or rewards) is important to make due to the power of terminology to
change the focus of these programs and their future direction (Shelley, 2011). Payment
incentives emphasize individual gain and provide motivation to deliver a certain amount
of a good/service purely for the economic benefit. On the other hand, compensation
30

emphasizes rewards for good stewardship practices and reimbursement for the costs of
enhancing and maintaining ES. Stewardship makes it clear that the landowners are not
the producers of ecosystem services, they are the caretakers of the ecosystem and
different actions or management practices affect the quality and quantity of ES. There
may be certain individual choices contributing to the quality of specific ES that can be
rewarded with compensation. The term beneficiary may also be preferred over buyer
because those that are benefitting are not necessarily the direct buyer, in practice there are
often intermediary agencies. The perception of compensation as reciprocation for good
stewardship and buyers as beneficiaries has more potential to influence behavioral
changes through the combination of both monetary and social incentives. The
terminology used and the social benefit framing of an issue can improve stakeholder
relationships and community collaboration, which also tends to lead to more
accountability (Nicolás Kosoy & Corbera, 2010; Shelley, 2011; Vatn, 2010).
In light of the impact of motivations, social perceptions, and values it becomes
clear that community relationships and cooperation between ES beneficiaries and
providers can greatly influence PES programs. This also draws attention to other
motivational factors such as pre-existing social values that affect participation. It has
been shown in a case study exploring motivations for participation in a PES program in
Mexico, that those involved were already prone to pro-conservation values, whereas
those that did not participate were not (Nicolas Kosoy, Corbera, & Brown, 2008). This
raises serious concerns and questions. How affective are the payments at changing
behavior? How do the values of landowners and stakeholders in a particular context
affect participation and outcomes?
31

Furthermore, these questions emphasize the practical concern regarding the
impacts of the concept of monetary payments for ES on landowner perspectives and
behavior. When individual gain is emphasized where a pro-conservation value already
exists payments have the potential to backfire (Kosoy and Corbera, 2010) because
payments may encourage self-interest and an over-commodification of ecosystems where
there wasn’t this viewpoint to begin with. To counteract this, it helps to recognize the
common good gains that people tend to support, without being paid to do so, and use
payments as a reward for providers that go above and beyond regulations in their efforts
to be good stewards. This approach also provides incentive for buyers that wish to
increase good public relations. These concerns demonstrate the complexity of PES and
the potential it has to influence behavior and vice versa, for perspectives and behaviors to
influence PES programs. These points emphasize how critical it is to use appropriate
conceptual frameworks, suitable messaging, and collaborative, bottom-up approaches for
the application of PES in specific sociocultural, political, and institutional settings.

Lessons from the Application of Payments for Ecosystem Services
Critical factors have arisen as common themes throughout the literature and are
evidenced through PES programs that have been implemented around the globe. Case
studies of PES programs worldwide identify main themes and lessons, including issues
with spatial targeting for payment effectiveness (Daniels et al., 2010; Muñoz-Piña et al.,
2008), motivations for participation (Arriagada, Ferraro, Sills, Pattanayak, & CorderoSancho, 2012; Asquith, Vargas, & Wunder, 2008; Morse et al., 2009; Rosa, Kandel, &

32

Dimas, 2003), effects of stakeholder values (Vignola, McDaniels, & Scholz, 2012;
Pagiola, 2008), outreach and education (Asquith et al., 2008; Ferranto et al., 2012), and
using appropriate policy tools and classification of ES for valuation (Birol, Karousakis, &
Koundouri, 2006; Brauman, Daily, Duarte, & Mooney, 2007; Costanza, 2008), as well as
the need to be adaptive, flexible, and context-specific when designing, implementing, and
evaluating programs (Daniels, Bagstad, Esposito, Moulaert, & Manuel Rodriguez, 2010;
Jack, Kousky, & Sims, 2008; Pagiola et al., 2005; Roumasset & Wada, 2013; Wendland
et al., 2010; Wunder, 2006; Wunder et al., 2008).
One of the most well-known and long-lived of PES program is the Pagos por
Servicios Ambientales (PSA) or Payments for Environmental Services in Costa Rica. The
ongoing PES program in Costa Rica recognizes four ecosystem services for payments:
carbon sequestration, water services, biodiversity, and aesthetic beauty. Costa Rica’s PES
program was a cumulative result of over a decade of conservation efforts. It was
implemented by the government in 1997 as a component of the 1996 Forestry Law,
which also prohibited land-use change in primary forests and regulated timber harvest.
This combination of institutional mechanisms (laws and regulations) and economic
incentives for conservation have been widely considered successful and many countries
have looked to Costa Rica as an example when developing PES programs of their own
(Pagiola, 2008).
However, the case studies from Costa Rica show many areas that need
improvement and critical factors to consider in PES programs. The primary reoccurring
suggestions for consideration are the variables that affect participation and land-use
decisions, including communication, perceptions and values of participants, socio33

economic drivers, and suitability of a site for alternative uses (Arriagada et al., 2012,
2009; Asquith et al., 2008; Morse et al., 2009; Pagiola et al., 2005; Pagiola, 2008; Rosa et
al., 2003; Vignola et al., 2012). Another main recommendation from these case studies is
to use a comprehensive landscape level scale that considers the context in which the
program is developed and to implement and monitor with an adaptive management style
approach (Asquith et al., 2008; Daniels et al., 2010; Pagiola, 2008; Wunder et al., 2008).
Due to the vast amount of research and literature on ecosystem services and PES
programs, this is not an exhaustive literature review. However, the primary
considerations and critical factors for PES programs identified in this literature review
develop the foundation and focus of the following case study on a pilot PES project in
Washington State.

Context for Payments for Ecosystem Services in Washington State
The institutional mechanisms that led to the development of pilot Payments for
Ecosystem Services (PES) projects in Washington State resulted from legislation enacted
in 2010. The Engrossed Substitute House Bill (ESHB) 2541 called for proposals from the
Washington State Department of Natural Resources (WSDNR) on how to encourage
conservation for private forest landowners through incentive programs focusing on
ecosystem services. In 2012 the Commissioner of Public Lands recommended PES
demonstration projects to test the feasibility of economic incentives for watershed
services. There was widespread support expressed for these demonstration projects and a
vast amount of collaboration for their development and implementation in the Nisqually

34

Watershed (WSDNR, 2013). There were two watersheds chosen, the Snohomish and the
Nisqually; this case study focuses on the Nisqually watershed pilot project.
There were many organizations that partnered with WSDNR on this pilot project
including the Nisqually River Council, Nisqually Land Trust, Northwest Natural
Resources Group, Swedeen Consultants, Earth Economics and the City of Olympia
Public Works. The demonstration project officially ended in 2013 and at that time had
accomplished its primary exploratory goal of providing information through research and
lessons learned from direct experience to inform the development of future PES projects.
However, conversations between partners and key stakeholders continue as they consider
opportunities for finalizing a watershed services transaction in the Nisqually Watershed.
Although this study was conducted after the pilot project ended, observations and
analyses took place in what can be described as the middle stages of the project
implementation.
The Nisqually Watershed Services Transaction pilot project focused on the goal
of improving the health of forest ecosystems, by retaining forest cover and preventing
forests from being degraded or lost to development, through the use of market-based
policy tools and providing new sources of income for private forest landowners. These
market-based tools generally provide monetary incentives to alter behavior of landowners
in ways that improve the ecosystem services being provided from their land. For
example, financial incentives could be provided to landowners for specific land practices
that protect and enhance forest ecosystems within a watershed that has priority wildlife
habitat areas.

35

Priority conservation areas for wildlife habitat have been identified by the
Washington State Department of Fish and Wildlife (WDFW) and many have been found
to be primarily on private lands (2005, 2009). A study conducted by Cassidy & Grue
(2000) pointed out that focusing conservation efforts on public lands may not be efficient
for many range restricted at-risk vertebrates that utilize private lands in Washington
State. They defined “at-risk” species as those vulnerable to human impacts and
development (p. 1061). The authors found that the percentage of private land within the
habitat range of at-risk species was nearly identical to the percentage of private land in
the state (56% and 55% respectively). Furthermore, they found 63 at-risk species that rely
on private lands for successful recovery.
If conservation efforts are primarily focused on public lands (i.e. national parks
and wildlife refuges) many populations of species that have critical habitat on private
property in the Puget Sound lowlands, or that range between elevations and land-use
types, will likely continue to decline (Cassidy & Grue, 2000). Socio-economic incentives
can be used to increase the cooperation of private landowners and industry in order to
reduce environmental impacts and protect ecosystem services. The combination of
specific policy tools, regulations, and an ecosystem management style approach that
incorporates PES incentive programs to increase conservation efforts on private lands
could improve protection for vulnerable species and overall biodiversity. Biodiversity is
closely tied to ecosystem structure and function, which makes it vital for many other
ecosystem goods and services, including water filtration and clean drinking water.
The classification of specific ecosystem services (ES) for valuation was one of the
first hurdles for designing the PES pilot projects. Initially WSDNR looked at carbon
36

trading and offsets and other ES market opportunities. Stakeholder discussions showed
that watershed service and biodiversity markets have more potential now than carbon
offsets. However, rising markets such as the new California “cap-and-trade” program
indicate an increasing future potential for a forest carbon market for offset type programs
in Washington State (WSDNR, 2013). Payments for Watershed Services (PWS) were
finally decided on for the pilot projects because there is currently more potential
economic demand for the services watersheds provide than for biodiversity. Furthermore,
it is often the case that biodiversity is a co-benefit with the conservation of forests for
watershed services provision due to the subsequent habitat protection. The development
of biodiversity markets shows a promising future for combining ecosystem service
protection (i.e. watershed services and biodiversity) and increasing funding for ES
transactions from organizations and entities focusing on individual benefits such as
drinking water or critical wildlife habitat. However, the present institutional and market
settings in Washington State show the most support for the development of PWS
programs because of the potential market support and current widespread public
recognition of the importance of the services watersheds provide (WSDNR, 2013).
Furthermore, watersheds also have relatively easily defined geographical boarders
and typically have existing collaborative organizations such as watershed partnerships
that are focused on their conservation and management. In Washington State watershed
planning is encouraged by the Watershed Planning Act that was enacted in 1998. This
institutional mechanism stimulated a collaborative process that involved local
governments and organizations whose main objectives are to address issues with water
quality and quantity as well as salmon habitat and in-stream flows. Watershed planning is
37

completed with the consensus of local, tribal, state, and federal governmental
organizations as well as the participation from other stakeholders, citizens, and nongovernmental organizations (Ryan & Klug, 2005). The watershed plans are implemented
by the Washington State Department of Ecology and local governments can (but are not
required) to enact ordinances for actions according to the watershed plan.
The focus on collaborative watershed management in Washington State advanced
with the formation of the Puget Sound Partnership (PSP) in 2007. PSP was a result of
Washington State policy decisions and the findings of the “blue-ribbon” advisory panel
appointed by Governor Christine Gregoire to create a Sound Health Strategic plan with
the cooperation and collaboration of various stakeholders, organizations, tribal, local,
state, and federal agencies (Paulson, 2007). The strategies employed by PSP are incentive
based, focus on behavioral change programs, and encourage collaborative approaches to
addressing environmental issues with collective action rather than relying exclusively on
traditional top-down regulatory mechanisms that in the past have resulted in costly
litigation and political gridlock. This kind of intergovernmental and collaborative
planning is structured by legislation and policy mandates, but it is also supported and
informed by cooperative planning and the inclusion of various stakeholders in a bottomup approach that encourages innovative solutions and local buy-in. Combining these
approaches and including stakeholder input and local knowledge allows for programs that
are adapted to a specific context and can help the local government better address
pertinent issues facing their communities, while also taking action towards meeting
broader policy goals (Ryan & Klug, 2005).

38

Summary
The concept of ecosystem services has evolved since it was first introduced in the
1970s as a tool to communicate the value of conserving ecosystems in a common
language that could be easily understood and incorporated into decision-making. The
concept of valuing ecosystem services for management purposes has since grown from
theory in the field of ecological economics into a practical tool for encouraging
environmental conservation on private lands. The MEA definition and framework for ES
classification is still widely used by managers. The general MEA categories of
supporting, cultural, regulating, and provisioning services are used in the valuation of
ecosystem services in the Nisqually Watershed. The focus of these kinds of applications
of PES tend to be on provisioning services that are easier to measure such as clean water,
but other regulating services such as flood control, and cultural services such as
recreational and spiritual values are also important considerations for managers and
decision-makers.
Developing Payments for Ecosystem Services programs is a complex,
interdisciplinary, and collaborative process that involves various dynamic critical factors.
Institutional mechanisms are the foundational basis and often the catalyst for setting up
PES programs. Scientific knowledge is important for the development of PES from
theory to practice. And stakeholder perceptions and beliefs surrounding ecosystem
services are instrumental in the development and application of programs in a specific
context. The literature calls for more empirical studies and evaluations of PES programs.
This thesis informs the development and advancement of this market-based tool for

39

conservation through the analysis of stakeholder values and perceptions of the Nisqually
Watershed Services Transaction pilot project.
These factors, central to the development of PES programs, are also fundamental
to the Advocacy Coalition Framework (ACF), a model for policy analysis. Both the ACF
and PES rely on scientific information to inform the process and recognize the influence
of participant’s beliefs and values. The identification of potential buyers (beneficiaries)
and sellers (providers) is a fundamental step for the implementation of PES projects,
which requires clear communication and collaboration across diverse groups of
stakeholders. However, this collaboration is dependent on the differing values and beliefs
of stakeholders, their perceptions of the critical factors in the project, and motivations for
participation. The ACF provides a method for understanding these factors that impact
collaboration and the outcomes of PES programs. This information can potentially be
used to help inform the design and implementation of future PES programs. Knowledge
of different stakeholder’s perspectives and values can also aid in the design of
communication materials and outreach strategies, which in turn can increase
participation, collaboration, and effectiveness of PES programs.

40

Chapter 3: Research Methods
Methodology
Policy change is a highly debated and widely studied process in policy analysis. It
is vital to natural resource management and environmental policy development that all
the factors that enter into such changes are given due consideration and review. Theories
have been developed to explain the policy processes, how interested parties interact and
how public policies are developed, implemented, and revised. Through the work of
political scientists that have studied political institutions and people involved in the
process, it has become clear that these theories must consider the human element and the
fact that people may be motivated by personal and political interests, not just to address a
public issue (Schlager & Blomquist, 1996). By the late 1980s the traditional “policy
cycle” model was recognized as having severe limitations and consequently alternative
theories were developed (Sabatier & Jenkins-Smith, 1994). The policy cycle model cut
down the policy process into distinct stages within a greater political context but it relied
heavily on a simplistic model. The basic stages of the policy cycle model generally
encompass the definition of the problem, followed by agenda setting, policy
development, implementation, and evaluation. Although important contributions were
made to political science using the policy cycle concept, its limitations were realized and
alternative approaches attempted to fill in the missing pieces. The primary missing pieces
that were looked at in order to get a better understanding of the policy process included
the lack of attention to the social and political context of policy development, as well as
the simplistic step-wise assumption about a process in which all aspects are actually at
play simultaneously.
41

Foremost to the arguments for the development of alternative policy models was
that the policy cycle lacks the critical causal driver mechanism that would explain what
force pushes the process from one stage to another. Furthermore, when the policy cycle
method was applied in practice the expected linear stages were often inaccurate with
multiple stages occurring simultaneously within the policy system. Another primary
limitation identified was the strictly top-down approach of the policy cycle method that
failed to take into account the influences of many important actors in the policy process.
In the context of environmental issues and policy, the strictly top-down (also known as
command-and-control) approach has been shown to be inappropriate for certain problems
and can result in increased conflict and litigation due to its failure to consider the
perspectives and values of various stakeholders (Weible, Sabatier, & Lubell, 2004).
Overall, the policy cycle method is unsuitable in most cases when the policy under
question is a result of complex influencing factors, including the dynamics of various
participants, belief systems, and multilayered institutional drivers of the policy process.
Alternative political theories focus on individual choices, interests, and political
influence as the major driver of policy change. One of the more commonly understood
political theories called the “politics of structural choice” (SC) views the development of
policies as arising from the interaction of interest groups and political power struggles
(Moe, 1990). This theory shares characteristics with Ostrom’s “Institutional Rational
Choice” (IRC) theory that highlights institutional rules and sees policy change as a result
of rational actions taken by groups of individuals to address collective problems (Ostrom,
1990). Moe’s Structural Choice (SC) approach also focuses on institutional rules and
arrangements for the development of public policy and shares the view that changes can
42

result from rational efforts to overcome collective action problems. Moe does
acknowledge that people can cooperate for mutually beneficial solutions, but believes
that conflicts over power often influence the formation of public policies (Schlager &
Blomquist, 1996). For Moe, the political process is highly bureaucratic with the drivers of
policy change being organized interest groups.

The Advocacy Coalition Framework
On the other hand, the Advocacy Coalition Framework (ACF) introduced by
Sabatier (1988) as an alternative to the policy cycle model was presented as a more
pluralistic political theory that provides a causal driver theory and a more pragmatic
method to understanding the policy process. The ACF relies on several assumptions
including stakeholder beliefs as the causal driver of political behavior, the influence of
diverse players, a central role of scientific information, and the policy subsystem as an
appropriate scope of analysis (Weible, Sabatier, & McQueen, 2009). The ACF is more
pragmatic than the policy cycle model because it has a place in the framework for both
top-down and bottom-up directions of influence to explain political behavior and policy
change. When applied to policy systems, the ACF theoretical view recognizes the
importance of combining a regulatory command-and-control approach with a bottom-up
approach that also considers stakeholder opinions and preferences during the
development and implementation of policy change.
The causal drivers in the ACF method are the beliefs and values of various
individuals and stakeholders from a wide range of backgrounds and organizations
43

working within a specific policy arena. It is around these beliefs that players in the policy
process will form coalitions based on similarities as well as competitive coalitions based
on differences. These coalitions will operate within a policy subsystem, which deals with
a specific issue or policy being addressed. Policy subsystems are not separate from the
greater political environment but they do tend to have relatively stable parameters in a
certain location in regards to a particular topic, such as forest conservation or watershed
management in Washington State. Moreover, the diversity of topics and geographical
areas involved in the broader political environment encourages specialization within
subsystems for players to be able to understand the complex topic areas and address
specific issues (Weible et al., 2009). Policy subsystems can be usefully divided into three
general categories: adversarial, collaborative, or unitary in which a single coalition
dominates the political environment (i.e. policy monopoly). An adversarial subsystem
will have at least two highly competitive coalitions that differ in their belief systems and
contend for resources and influence over political outcomes. On the other hand, a
collaborative subsystem is made up of coalitions that do not differ as greatly in their
beliefs and are generally marked by institutions that promote communication and
collaboration across coalitions.
However, not all beliefs are influenced equally. The ACF describes three levels of
individual beliefs: deep core beliefs, policy core beliefs and secondary beliefs (Sabatier &
Jenkins-Smith, 1994; Sabatier, 1988; Weible et al., 2009; Weible, 2007). Core beliefs are
the deepest and least likely to be influenced or to change greatly. These deep core beliefs
are normative beliefs, including beliefs about the role of humans in nature, science in
decision making, or the value of conserving ecosystem services for future generations.
44

Policy core beliefs are at the mid-level and are more likely to change with new
knowledge and experiences than core beliefs. Similar policy core beliefs act as the glue
that groups or coalitions form around. These coalitions of like-minded groups, or
individuals with similar policy core beliefs, often stay together and relatively stable over
long periods of time. Policy core beliefs represent the perceptions of issues, causal
drivers, and value based priorities of a coalition within a policy subsystem. For example,
the relative importance of environmental conservation vs. economic development or the
perceptions of the seriousness of an issue like water pollution and its believed causes
would represent policy core beliefs (Sabatier & Jenkins-Smith, 1994, p. 180). Secondary
beliefs are the lowest level and are specific beliefs and preferences that are the most
malleable of the three levels and can change rather frequently based on new knowledge
and education from various pathways, including new scientific information, or
advertising and outreach strategies.
Stakeholder coalitions typically form based on similar policy core beliefs but their
secondary beliefs and the
degree of coordination
around a specific issue
also play a part in their
formation and stability.
An example from a study
in the UK by Ricky
Lawton and Murray Rudd
(2013) applied the ACF to
Figure 1. Each circle represents the amount of shared beliefs
between paired coalitions at each belief level.

45

understand the values and beliefs of key players involved with the trend towards the
ecosystem services approach for conservation policy. The results of this study indicated
divergence at the level of deep core beliefs, especially between the conservation groups
and the central government (Figure 1). Most pairs showed less agreement on issues at the
deep core level, while there were more similarities in responses at the policy core level,
and almost complete alignment on shared belief issues at the secondary belief level.
These results would be expected by the ACF for the formation of coalitions around policy
core beliefs and the more flexible secondary beliefs. Advocacy coalitions consist of
various participants from governmental organizations, non-profit and private
organizations, scientists and research organizations, and other individuals actively
involved in furthering their shared beliefs and bringing about changes within a policy
subsystem.
Coalitions that
have one type
of belief
system
typically
compete with
coalitions that
have another

Figure 2. Agreement on beliefs between conservation and central government groups.
Policy core and secondary beliefs overlap much more than beliefs at the deep core level
(Lawton & Rudd, 2013).

for resources (e.g. funding for programs) and to influence decision making in a policy
subsystem. However, coalitions can also collaborate based on shared beliefs to deal with
specific issues and develop solutions such as environmental valuation or engaging civil

46

society (Figure 2). Studies have found that policy core beliefs affect stakeholder
relationships, collaboration, competition, and inevitably decision making and policy
change (Lubell, 2004; Weible, 2007; Weible et al., 2004).
Policy changes come from multiple directions, but the ACF highlights two
primary pathways, 1) from the effects of external subsystem events and 2) a result of
policy-oriented learning.
Factors external to a policy
subsystem, including dramatic
changes to socioeconomic
conditions, public opinion, and
governance or institutional
structures, can change core
attributes of the subsystem by
Figure 3. The ACF flow diagram shows the broader political
environment with stable parameters and external events that are
constrained by long term coalition structures as well as short term
constraints and resources that influence change in the policy
subsystem (Weible, 2007).

shifting resources or power
among coalitions (Figure 3).
Although factors internal to the

policy subsystem, such as dramatic changes in the availability of resources or staffing of
coalitions, can bring about a degree of policy change they tend to not be as influential or
long-lasting as external events (Weible et al., 2009). The second primary path to policy
change occurs when behavior and beliefs (usually at the policy core or secondary belief
levels) are altered based on new experiences or knowledge that is pertinent to the
realization or alteration of policy goals. The ACF method also operates from the
viewpoint that individuals are functioning under bounded rationality, which means that
47

with a limited capacity to fully understand the world people must rely on their existing
beliefs and available information to simplify and makes sense of a situation.
Available scientific and technical information can result in policy-oriented
learning and influence people’s beliefs and preferences for decision-making, as well as
the overall policy process. New information is seen to contribute to policy-oriented
learning when it has the capacity to influence certain beliefs and behaviors and result in
adaptations or changes to policy objectives (Weible et al., 2009). Policy-oriented learning
generally affects policy core or secondary beliefs that are more malleable than deep core
beliefs and it concerns preferences for action or alliances in a specific context. If the
subsystem is collaborative then ideally local and expert-based information will be
integrated in an interdisciplinary and adaptive approach to problem-solving and policy
change(Weible et al., 2009; Weible, 2008).
Within collaborative subsystems another pathway to policy change has been more
recently recognized and occurs when there are negotiated agreements that usually emerge
within consensus-based and collaborative institutions (Weible et al., 2009). However,
negotiations do not always entail collaborative institutions or aforementioned policyoriented learning when they are the result of what is known as a “hurting stalemate.” A
hurting stalemate occurs when there are mutually negative impacts and no better options
for any of the key parties, which requires the negotiation of a solution in order to realize
some sort of policy change. The negotiation pathway is easiest when there are
institutional structures in place that encourage learning and collaboration across
coalitions. For example, with the support of professional forums or other venues and
institutional structures that provide a safe environment for everyone to collectively learn,
48

come to an agreement, and implement policy change. These kinds of collaborative
institutions strive to mitigate conflict and integrate scientific information, local
knowledge, and belief systems through partnerships focused on finding mutually agreed
upon solutions (Lubell, Schneider, Scholz, & Mete, 2002; Lubell, 2004; Weible &
Sabatier, 2009; Weible et al., 2004). Furthermore, the hope is that collaborative
institutions can not only create benefits for the environment but for the economy as well
because they are potentially less costly in the long-run due to avoided litigation or
political gridlock.
Partnerships that take collective action with a more bottom-up approach to
management tend to emerge in response to public resource problems that remain
unresolved from a command-and control (top-down) approach and can be complimentary
to regulatory agencies (Lubell et al., 2002). For example, watershed partnerships and
collaborative groups tend to emerge due to increasingly severe nonpoint (dispersed)
pollution problems that are difficult to solve with command-and-control policies
(regulations). Furthermore, the distribution of authority and use of collaborative
institutions in a subsystem that mitigates conflict to intermediate levels inevitably
changes how scientific information is used. In a collaborative subsystem, instead of
science being utilized as a political weapon, which often happens in adversarial
subsystems, scientists are more likely to collaborate with nonscientists and contribute to
learning across coalitions as well as the development of agreements and policy change or
adaptation (Weible & Sabatier, 2009; Weible, 2008).

49

The Advocacy Coalition Framework applied to Payments for Ecosystem Services
The Advocacy Coalition Framework (ACF) model has several critical factors that
contribute to an explanation of policy change. These include the influences of current
institutional mechanisms, scientific knowledge, beliefs of stakeholders, and collaboration.
Similar critical factors were previously discussed in the literature review as being
instrumental in the development of Payment for Ecosystem Services programs.
Institutional settings lay the ground work for shaping policy subsystems and framing
issues to be addressed by coalitions. Legislative decisions and other institutional
mechanisms can put priorities on certain issues and also suggest methods for problem
solving such as forming collaborative institutions and scientific forums.
Scientific information is critical in shifting beliefs and preferences of coalitions
through the process known as policy-oriented learning. The role of experts and scientific
knowledge is central to legitimizing decisions about complex environmental issues
(Weible, 2008). Technical information and scientific evidence can also be used politically
to support a predetermined position of a coalition. On the other hand, it can be ignored
when it does not align with policy core beliefs, which if taken up by a competing
coalition could be used as a political weapon and possibly raise the level of conflict
between groups. Through the lens of the ACF, policy can be seen as the interpretation of
beliefs from competing coalitions. Information from experts is critical because it can alter
the beliefs of stakeholders and result in policy changes when the new knowledge is
agreed upon across coalitions. The ACF hypothesizes with empirical support that policyoriented learning can occur across coalitions and lead to collaborative action when
several critical factors are in place (Sabatier & Jenkins-Smith, 1994, p. 191). Specifically,
50

if there is an intermediate level of conflict (enough to have a healthy debate but not
enough to end in a hurting stalemate) and an active effort for communication and sharing
of knowledge such as a professional forum, then the instrumental use of technical
information can result in collective learning. Ideally, the development of a mutually
beneficial solution or agreed upon policy decisions that use the best available science
would be the preferred outcome of this collaborative approach.
Collaborative subsystems tend to use flexible policy instruments that are
voluntary in compliance and have consensus-based venues for policy-oriented learning.
In the case of the Nisqually Watershed Services Transaction pilot project, the instrument
is Payments for Ecosystem Services that provides an economic incentive for voluntary
compliance to a conservation objective. In this example private landowners would be
rewarded for certain forest practices that protect watershed services such as water quality
and quantity. Learning is central to the pilot project and takes place in a professional
forum and with the collaboration of a variety of stakeholders, citizens, scientists, and
representatives of government agencies, NGOs and non-profit organizations. This
collaborative process helps to gain a greater understanding of the dynamics of the
Nisqually Watershed and to negotiate agreements for a PES transaction that is mutually
beneficial. In applying the ACF to this case, the three main groups of beliefs that have the
potential to become policy core beliefs and impact collaboration and decision making
within a policy subsystem include the severity, causes, and potential solutions to an issue.
In the context of the Nisqually Watershed Services pilot project these can be
stated as: beliefs about the severity and major types of watershed services problems,
beliefs about the causes of watershed services problems, and beliefs about the potential
51

solutions and priorities for watershed services problems. Understanding stakeholder
values and beliefs, especially on types of problems and priorities for the conservation of
watershed services, are important considerations for natural resource managers and for
designing communication strategies to facilitate collaboration. An important goal of this
study is to also understand perspectives, critical factors, challenges, and lessons involved
in the Nisqually Watershed Services model to help explain the stakeholder dynamics
involved and the results of the pilot project efforts and to inform the development of
similar PES programs.

Site Description and Context

Figure 4. The Nisqually Watershed

52

The Nisqually Watershed is unique, and is considered to be one of the least
developed and most pristine watersheds in the Puget Sound. The Nisqually River’s
headwaters are protected in Mount Rainier National Park and its delta resides in the
Nisqually National Wildlife Refuge. However, there are many challenges that arise from
human activities and decisions that affect the integrity of this vital area. The Nisqually
River journeys 78 miles from glaciers on the highest mountain peak in the continental
United States (at over 14,000 feet) down to its delta in the South Puget Sound (Figure 4).
The Nisqually River drains about 720 square miles of land. The headwaters and
tributaries flow through subalpine meadows and dense forested mountains. Down from
the steep mountain gradients, the Nisqually River courses through lush river valleys,
which provide habitat for a diversity of wildlife and many threatened and endangered
species. The Nisqually River finally cuts across lowland valleys and prairies before it
reaches the estuary.
The major human impacts to the river’s natural flow are noteworthy. These
include three dams, beginning with Tacoma City Light’s Alder Dam with its seven mile
long Alder Reservoir, followed shortly after by the LaGrande Dam, and finally the
Centralia Powerhouse diversion dam. Just below the LaGrande Dam there is a large
waterfall that naturally prevents fish from migrating any further upstream. Before this
waterfall, the four-foot high Centralia Powerhouse diversion dam, which fish are able to
bypass, diverts river water into a power canal that travels to a powerhouse to generate
almost a third of Centralia’s electricity (City of Centralia, Washington, 2013).
Downstream from the LaGrande Dam, the Mashel River tributary meets with the main

53

stem of the Nisqually River where the land begins to flatten and the river meanders
through numerous land-uses, farming, and residential areas in the lowland valley.
Due to the various protected areas along the lower Nisqually River, unlike many
other rivers in the Puget Sound basin, it has no artificial levees and its riparian zones have
remained relatively unaltered since the mid-19th century. As a result, there is a
significantly higher abundance of wood jams and pools, which provide important fish
habitat (Collins, Montgomery, & Haas, 2002). Over 94 species of fish are observed in the
Nisqually basin and estuary, including herring, cods, sculpins, rockfish, prickle backs,
gobies, and salmonids. Salmonids are likely the most abundant fish species in the
Nisqually River basin, with ten species being found and most being maintained through
hatchery production. The majority of hatchery releases have consisted of fall Chinook,
Coho and chum salmon (Cook-Tabor, 1999). The Nisqually Tribe operates two
hatcheries along the Nisqually River and most of the fish caught by tribal members are
from these hatcheries, while sports fishermen are required to keep only hatchery fish and
must release wild salmon to continue their journey upstream. Far upstream, the Nisqually
Glacier on Mount Rainier feeds the headwaters of the river with melt water that sustains
flows throughout the dry summer months.
However, the glacier has receded dramatically within the last 150 years with three
cycles of retreat and advance but an overall loss of 1588 meters between 1913 and 1994,
with the latest 300 meter retreat from 1970 to 2008 (Nylen, 2004; Sisson, Robinson, &
Swinney, 2011). South facing glaciers like the Nisqually are most susceptible to
thinning. However, the glacier has receded dramatically, which could be an indicator of
climate change (Marr, 2010; Nylen, 2004). In effect, the retreat of the Nisqually Glacier
54

may have important implications for water flow and quantity, hydropower, wildlife
habitat, sediment transport,
and flooding along the
Nisqually River. Beginning
in April, the discharge from
the Nisqually River
increases while
precipitation decreases,
which demonstrates that the

Figure 5. Mean annual hydrograph for the upper Nisqually River (Marr, 2010).

major input of freshwater
into the river shifts from rain to snowmelt (Figure 5). This input shift illustrates the
importance of snowpack and glacial melt water to the river during the dry months of
summer. Furthermore, since the middle of the 20th century, spring snowpack volume has
declined. Changes in the proportions of snowmelt and stream flow timing trends also
show spring runoff peaks shifting to earlier in the year, which suggests that climate
change is influencing changes in snowmelt (Marr, 2010). These effects of climate change
and shifts in precipitation patterns, flow regimes, and declining snowpack are
compounded by increasing population growth and demand for water resources in the
Nisqually Watershed. These issues are important considerations for watershed planning
and management.

55

Collaborative Watershed Planning
The Nisqually River has a long history of collaborative watershed planning.
Under the 1972 Washington State Shoreline Management Act, the Nisqually was
recognized as a “River of Statewide Significance” because it supports many resources
that humans depend upon including salmon, forest products, agricultural, and
hydropower. The significance of the Nisqually River was also recognized in 1985 by the
state legislature when they directed the Department of Ecology to create a watershed
management plan that resulted in the Nisqually River Task Force, which grew into the
oldest river council in Washington State. The Nisqually River Council is comprised of
various stakeholders, citizens, private landowners, conservation organizations, local and
state government officials, local industry, and the Nisqually Tribe. The Nisqually tribe
has demonstrated leadership in coordination and implementation of conservation and
restoration efforts in the watershed (Batker, de la Torre, Kocian, & Lovell, 2009). The
Nisqually River Council collaboratively developed the Nisqually River Management Plan
that was adopted by Legislature in 1987 and calls for stewardship of natural resources,
education campaigns, and the coordination and implementation of various conservation
and restoration projects (The Nisqually River Council, 2014). This collaborative
watershed council works towards the protection and conservation of the Nisqually
Watersheds plentiful resources as well as the well-being and health of the wildlife
populations and human communities that make a home in the watershed.
Further statewide watershed planning grew from the Watershed Planning Act of
1998 that designated the watersheds throughout Puget Sound as Water Resources
Inventory Areas (WRIAs). The watershed planning law provided funding and a method
56

to allow citizens (with the help of state agencies) to collaboratively asses the status of the
resources in their watershed and to develop management plans, specifically focused on
water quantity, supply, and use. Furthermore, The Nisqually Watershed (WRIA 11) was
assessed in the Puget Sound Characterization project, which is an ongoing collaborative
effort between the Dept. of Ecology, PSP, and WDFW. The primary goal of the Puget
Sound Characterization project is to provide a relatively complete assessment of all the
WRIAs in an ecosystem view of the Puget Sound landscape to better prioritize areas for
conservation and restoration. This Puget Sound Watershed Characterization project has
progressed to become a regional-scale tool to help local governments with land-use
decisions and other plans to identify critical areas to protect and to advance restoration
projects (Department of Ecology, 2010). Priority areas for restoration and protection in
the Nisqually Watershed were identified through the Puget Sound Characterization
project. An example of the results from the sediment and water quality model suggest
that the highest priority areas for management of sediment transport and water quality are
to the northeast and west of Eatonville, where ongoing forest and agricultural practices
are resulting in environmental degradation (figure 6).

57

Figure 6. Results from the Puget Sound Watershed Characterization (2012) for the sediment water quality model. Eight
management areas are suggested including the darkest blue being areas for protection with the greatest potential to
transport sediment and lowest level of degradation and the yellow being areas for restoration with the highest potential for
sediment transport and that are the most degraded. The dark brown areas indicate potential sinks as they are least likely to
transport sediment (i.e. wetlands) but are suggested for restoration.

Furthermore, in 2003 the Nisqually River Council reviewed the Watershed Management
Plan and revised it with an emphasis on a watershed-wide approach to ecosystem
management and restoration that is more inclusive than the previous focus. Prior to this,
the emphasis was primarily on riparian areas along the Nisqually River rather than the
combination of ecosystems and the socioeconomic settings in the entire watershed
(Batker et al., 2009).
The Nisqually River passes through numerous different land-use areas on its way
to Puget Sound, including protected areas, rural communities, public and private
timberlands, municipal hydropower projects, farmlands, the Nisqually Indian
Reservation, and the Fort Lewis Military Reservation. There are approximately 69,000

58

residents in the Nisqually Watershed including new military families, long-time residents,
and Nisqually tribal members. These citizens, organizations, and government agencies
have been working to protect the ecological and economic aspects of the watershed in
order to ensure a high quality of life for all the residents as well as maintaining the
aesthetic beauty of the area and the benefits from recreation. Mount Rainier National
Park alone drew in 1.3 million visitors in 2000 and contributed $30 million dollars to the
local economy.
On the other end, the Nisqually National Wildlife Refuge brings in over $9
million a year from visitors and it provides critical habitat to a great diversity of
migratory birds, amphibians, salmon, and many other wildlife species. The refuge also
has been undergoing a large delta restoration project in close collaboration with the
Nisqually Tribe and other partners to remove agricultural dikes and restore 700 acres of
salt marsh habitat, utilizing over $12 million from federal grants (Batker et al., 2009). In
2002, the Brown Farm dike removal reintroduced the rhythmic motion of the tides for the
first time in nearly a century. The ongoing Nisqually Delta restoration project is the
largest tidal marsh restoration project in the Pacific Northwest and it is enabling the
estuary to function once again as critical salmon and wildlife habitat on such a large scale
that it is expected to increase ecosystem functions and services considerably (“Nisqually
Delta Restoration,” 2011).
Many organizations have been collaborating on the conservation of wildlife
habitat and ecosystems within the Nisqually watershed for over two decades with the
latest collaborative efforts focused on developing a program of Payments for Watershed
Services (PWS). Organizations involved in this PWS pilot project include the Nisqually
59

Land Trust, Northwest Natural Resources Groups (NNRG), the Nisqually Tribe, Earth
Economics, the Nisqually River Council, and the Washington State Department of
Natural Resources (WSDNR), with the goal of connecting the land-uses of private
landowners with the beneficiaries of the services their forested ecosystems provide in the
watershed. Efforts to restore salmon populations and habitat have received national
recognition, which is evidenced by an exhibit in the Smithsonian Museum in Washington
D.C. that is dedicated to the work in the Nisqually Watershed. This ongoing effort to
improve the quality of ecosystems in the Nisqually watershed is combined with a
determination to address increasing population development pressure, improve land
management on private lands, and protect watershed services. This project considers vital
aspects such as the quality and quantity of the drinking water the ecosystems deliver,
while at the same time landowners are provided with a viable economic alternative to
land-use conversion and given compensation for retaining and protecting ecosystem
services provided by a forested watershed.
The Nisqually Watershed has been assessed by Earth Economics (2009) for its
estimated economic value and was found to have bountiful goods and services that offer
great natural capital investment opportunities. The goods and services studied include
fish, timber, flood protection, drinking water filtration, aesthetic value and recreation.
The study used cutting edge economic analysis techniques and found that 12 of 23
ecosystem services identified in the Nisqually Watershed gives an estimated
$287,600,000 to $4,165,990,000 in benefits to people yearly (Batker et al., 2009). The
economic analysis of ecosystem services is still a new field of study and needs more
primary studies to fill in valuation gaps. Earth Economics acknowledges that this
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estimation likely underestimates the economic value the Nisqually Watershed actually
provides.
The underestimation of the value of the Nisqually Watershed may be partially due
to the fact that natural capital is different than built capital in many regards to its
valuation. Natural capital tends to increase in value over time and is renewable, whereas
built capital slowly crumbles and requires ongoing maintenance. Traditionally,
watersheds have been underinvested in because as a whole they were not valued
economically. This has led to the over degradation of watersheds and the loss of benefits
and services, which subsequently damages the economy both directly and indirectly
through costs associated with repairing damages and replacing natural capitol with
expensive infrastructure. For example, if a watershed is developed to the point that it can
no longer provide flood control services, properties and houses along the river may
become flooded and damages will need to be repaired. Furthermore, costly infrastructure
such as a dike system may be put in place rather than investing in the natural flood
reducing ability of the watershed itself.
Economic sustainability and human well-being are inherently tied to
environmental sustainability and the goods and services that healthy ecosystems provide.
Investing to protect and maintain ecosystem services in the Nisqually Watershed provides
benefits for people far into the future and across the watershed boundaries for the entire
region. It is in close proximity to three of Washington’s largest cities, Olympia, Tacoma
and Seattle and contributes to the ecological health of the Puget Sound. Half of the
freshwater input to South Puget Sound flows from the Nisqually Watershed, which is
critical to the water quality of the southern end of Puget Sound because it does not
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receive tidal flushing from the Straits of Juan de Fuca (Batker et al., 2009). Thus,
investing in the natural capital and ecosystem services of the Nisqually Watershed will
contribute to the overall ecological health of the Puget Sound and the well-being of many
individuals and communities.
The Nisqually Watershed provides critical goods and services that are protected
through collaborative management that encourages ecological and socioeconomic
sustainability. One of the most critical goods provided by the Nisqually Watershed is
drinking water to its residents and citizens of Olympia, Washington. Numerous aquifers
in the Nisqually Watershed discharge to the Puget Sound and provide much of the
watershed’s groundwater. Recent studies have shown these aquifers are more directly
connected to surface waters than previously thought, which raises concern for the
McAllister aquifer and wellhead that provides the primary source of drinking water for
the city of Olympia. The Nisqually River basin also hosts native salmon runs and several
threatened and endangered species, including the Marbled Murrelet, Bald Eagle, and
Spotted Owl. Farming also contributes to the economy and ecology of the Nisqually
Watershed as well as forestry, which is the dominant land-use in the upper watershed
with timber companies being the primary private landowners.
Increased pressure on the Nisqually Watersheds natural resources is expected
from the anticipated population growth in the next 20 years, which may be confounded
by the forecasted impacts of climate change and shortfalls to the water supply in the
Puget Sound Basin (Batker et al., 2009). The Nisqually Watershed Plan, with the
collaboration of the Department of Ecology, local governments, private stakeholders, and
the Nisqually Tribe, has identified several priority issues on which management efforts
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need to focus. These included population growth, land-use, and water allocation, which
all need careful consideration and management to safeguard the health of ecosystems,
conserve the goods and services they provide, and sustain local economies and
communities.

Sampling Methods
Both qualitative and quantitative methods were used for this study. For the
interviews, key players in the Nisqually Watershed Services Transaction pilot project
were identified through research and recommendations from Craig Partridge, the former
Policy and Government Relations Director for the Washington Department of Natural
Resources. Craig Partridge was integrally involved with the conception and development
of the Watershed Services Transaction pilot projects. Semi-structured, in-depth
interviews were audio-recorded and conducted with members of the core team and key
stakeholders that were central players in the Nisqually pilot project. Through their
answers to open-ended interview questions, these key participants provided insight into
the goals and development of the project as well as observations on stakeholder dynamics
and critical factors involved.
Additionally, quantitative data gathered from the short survey questionnaire was
used to determine perspectives and beliefs from a larger group of participants, including
landowners in the watershed (sellers) and city water utility programs (buyers) that were
considered for a watershed services transaction. This questionnaire was designed to
identify possible coalitions based on shared beliefs and to show how these might affect
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groups that are already formed based on organization affiliation or highlight areas of
collaboration or competition. The survey questions and method applied the Advocacy
Coalition Framework (ACF), which provides the theoretical foundation and testable
hypothesis that coalitions of stakeholders will form around similar beliefs.
According to the ACF, stakeholder coalitions can impact the degree of
collaboration and competition within a subsystem, or more specifically the
implementation of an agreement or policy change. It would be expected that if there are
coalitions with highly divergent beliefs, the level of disagreement would rise and the
degree of collaboration and subsequent implementation of agreements would decrease.
The objective of the survey data combined with the interview results is to gain a more
comprehensive understanding of how stakeholder beliefs and potential coalitions, as well
as other critical factors, may have influenced the outcomes of the Nisqually pilot project
and how these beliefs may inform PES program development and implementation.
A modified snowball sampling approach was used to identify the larger group of
stakeholders for the survey. Using this referral type of sampling technique, members of
the core team identified other stakeholders that they were familiar with as being involved
with the Nisqually Watershed Services Transaction pilot project. Surveys were also
collected in-person at a Nisqually River Council meeting and from emailing an online
version out to the organizations members as well as others identified by referral as being
stakeholders in the pilot project. The snowball approach is a non-probability sampling
technique commonly used in social studies to identify potential study subjects that may
be hard to locate or that are a part of a specific subpopulation. This method to access data
yields a unique and valuable type of information from the targeted informants (Noy,
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2008). The interviews of key informants (stakeholders) are inextricably connected to the
quality of the snowball sampling approach. The dynamic process of referrals, trustbuilding, and clear communication are essential to acquire the recommendations of a
sufficient amount of contacts. This approach, similar to referral or respondent-driven
sampling, utilizes social networks to access specific study participants that share common
characteristics. In this case, the populations consisted of stakeholders and individuals
from organizations with interest and involvement in the pilot project. Respondent-driven
sampling has been shown to result in a good representative sample in well-connected
populations (McCreesh et al., 2012), which is the case in the Nisqually pilot project with
the involvement of well-known and established partnership organizations such as the
Nisqually River Council.

Quantitative and Qualitative Data Analysis
The quantitative survey data set provided an overall view of stakeholder
perceptions and mean responses to questions, but was primarily analyzed to identify
potential stakeholder coalitions based on similar responses. An exploratory nonhierarchical method of clustering was used to search for patterns in the dataset and
organize the respondents into similar groups (Aldenderfer & Blashfield, 1984) for
stakeholder analysis according to the ACF. The 22 survey questions were arranged on a
Likert scale (Appendix A) for quantitative analysis (1 = strongly disagree – 5 = strongly
agree). First, a preliminary analysis of the survey data set was completed to understand
the overall patterns (mean responses, standard deviation, and the percentage) of responses

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to each question without regards to stakeholder groups. A one-way analysis of variance
(ANOVA) was also performed for each question to reveal if there were any differences in
the mean responses among the 6 stakeholder groups (private landowner, NGO, nonprofit, local government, other, and State, Federal, or Tribal government). Given that the
sample size was relatively small (49 respondents), K-means cluster analysis was used to
organize the data and identify coalitions of stakeholders based on similar responses
concerning their beliefs and preferences for ecosystem services in the Nisqually
Watershed. Cluster analysis is exploratory and often used to find patterns in data, rather
than to test a hypothesis (Lipsky & Ryan, 2011). Conclusions are not drawn directly from
the results of cluster analysis; it simply finds patterns of stakeholder beliefs and suggests
potential groups that can be validated using qualitative analysis and results from the
interviews.
Qualitative interview data was crucial for understanding critical factors and
perceptions of the pilot project as well as explaining shared values and similar responses
for the potential coalitions identified through the quantitative survey analysis. Interviews
of key players from leading organizations involved in the pilot project were voice
recorded, transcribed, and analyzed for patterns and coded for major themes in
stakeholder responses and perspectives using qualitative content and thematic analysis
(Patton, 2002; Rubin & Rubin, 2012). A framework for thematic analysis was developed
and each interview transcription was coded for reoccurring themes in response to each
question, which were then used to sort responses into thematic groups. For example,
when asked about the goals of the pilot project, the reoccurring response of protecting
water quality and quantity was one of the themes coded for the question and five
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interviewees were sorted into that group based on their similar responses. In this way, the
in-depth interview responses were organized and quantified according to how many
respondents replied with the same theme.

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Chapter 4: Results
Perceptions of the Nisqually Watershed Services pilot project were identified in
the interviews of twelve key stakeholders involved in the pilot project who represent
different organizations. These included two representatives from the Washington State
Department of Natural Resources (WSDNR), and one each from the Department of
Health (DOH), Earth Economics, the Nisqually Land Trust (NLT), Nisqually River
Foundation (NRF), an environmental consulting agency (Sweden Consultants),
Washington Forest Protection Association (WFPA) that represents private forest
landowners, Hancock Timber Resource Group (a large industrial forest landowner), the
City of Olympia Public Works, Northwest Natural Resources Group (NNRG), and the
Nisqually Tribe Natural Resources Department. The representatives of these
organizations worked collaboratively to develop and implement the Nisqually Watershed
Services pilot project and had valuable insights into the inner workings, critical factors,
and challenges and lessons of the Nisqually pilot project.

Interview Results
The overall goals of the Nisqually pilot project were succinctly summarized by
Craig Partridge, the former Policy and Government Relations Director, who has helped
guide policy for more than three decades with WSDNR and played an instrumental role
in the development and implementation of this pilot project.

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I think the major goals are two-fold, one is maintaining the benefits themselves,
which include drinking water, flood moderation and protection of fish habitat,
water quality protection, and then coincident with those benefits, is the economic
value to the landowners that are taking the actions that provide the benefits. They
derive some economic benefits that will hopefully retain them practicing forestry
or whatever land use that is producing the benefits on that land.
Craig Partridge-WSDNR

When asked an open-ended question about the main goals of the pilot project,
areas of strong consensus and themes among interviewee responses included: to protect
and ensure drinking water quality and quantity for generations to come, to develop new
revenues of funding, to provide financial incentives to private landowners to maintain
their forested lands, and to change forest practices to be more ecologically sustainable.
Other benefits such as conserving forests for wildlife and endangered species habitat as
well as sustaining the various values of forested ecosystems, including cultural and
spiritual values to the community, were also reported as goals by five respondents. Two
interviewees elaborated on the goal of providing incentives to private landowners to
develop satisfactory economic opportunities for alternatives to certain forest practices,
land-use change, or development (timber landowner representatives). The Nisqually
Tribe representative emphasized the goal of ensuring their usual and accustomed fishing
grounds and securing a long-term future for the community.
The primary objective of the Nisqually Watershed Services pilot project, and
developing demonstration PES programs in Washington State, is presented as a means to
protect and improve forest ecosystems on private lands through the distribution of
financial incentives to landowners (WSDNR, 2013). This overall goal was reflected in
the interview responses from key players involved, although different foci were chosen
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by different organizations. The goal of protecting the quality and quantity of water
resources was reported by five different representatives from organizations including
DOH, the Nisqually Tribe Natural Resources Department, the City of Olympia, and
WSDNR. The goal of developing financial incentives to change forest practices and
retain forest cover on private lands was reported by seven different representatives from
organizations including the NLT, NRF, Hancock, WFPA, WSDNR, NNRG, and Earth
Economics. Conservation value and other values to wildlife habitat and community
benefit were highlighted by five organizations the NLT, WSDNR, NNRG, and the
Nisqually Tribe Natural Resources Department.

The Role of Scientific Information
When responding to an open-ended question on the role of scientific information,
all of the interview participants reported that it played a crucial validating role in the pilot
project. Four of the respondents (representatives from DNR, The Nisqually Land Trust,
and Swedeen Consultants), emphasized the use of scientific information to validate the
cause-effect relationship between forest practices and the ecosystem services (ES) being
measured (i.e. water quality). The other eight respondents focused on the critical role of
scientific information to validate the market-based strategies being pursued and show the
scientific basis for the identification and valuation of specific ecosystem services. One
interviewee gave a great example of the difficulties associated with scientific validation
and measuring the additional ecosystem services and benefits provided by specific forest
management practices.

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If you have 100 foot buffer already and I wanted to put 101 foot buffer on it, I can
certainly tell you how much that costs me as a landowner but you can't tell me
how much that's adding benefit for fish, for water… the list of ecosystem services.
The added value of increased buffers are extremely challenging to justify
scientifically.
Doug Hooks-WFPA

For these reasons, the scientific component of the project was reported as being very
critical and central to the pilot project effort overall. One respondent ascribed over half
(60-70%) of time and resources to being invested in data collection, creating metrics for
ES valuation, and economic analysis.
Eight of the interviewees also reported that there was generally not enough
scientific information and that more was being sought than was available. Three
respondents also reported that there were challenges with the development of new
scientific information. However, two interviewees (DNR and Swedeen Consultants)
expressed concern that the demand for high scientific rigor and validation of the causeeffect relationship can make a transaction impractical by raising the transaction costs and
time requirements. For example, when describing the need for scientific justification and
validation of the cause-effect relationship between certain forest practices and the actual
ecosystem services and additional benefits being provided to those paying for them, one
interviewee explained that,
The more the [buyers] have to be sure that those benefits in a quantitative sense
are going to occur compared to if they hadn't made the payments then the more
important the scientific underpinnings of the cause effect relationship is… if the
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stakes are high enough that the buyers have very high demand for scientific rigor
it might make the transaction impractical, either because that science doesn’t
exist or it would be too expensive to acquire.
Craig Partridge-WSDNR

This highlights concern over the need to balance the requirements for scientific validation
of the cause-effect relationship and the demand for scientific justification of the marketbased methods used, which can take massive amounts of resources and time, when there
is need for immediate action on a critical issue. The representative stakeholder
interviewed from Earth Economics clearly articulated the need for swift and efficient
action for forest conservation and ES protection to address issues now, using the best
available science, rather than waiting for new scientific findings.
I think that we were seeking more scientific information than is available. We
found that the scientific information available from USGS for example was not as
conclusive as we were hoping that it would be to better justify the use of a
payments for watershed services scheme. Those of us involved in promoting
investments in natural infrastructure recognize the need for strong scientific
information yet we can't stand by and wait for the science to catch up, otherwise
we’re going to be in bigger trouble down the road than we are today.
Tracy Stanton-Earth Economics

The provision and dissemination of scientific information is a complicated process that is
subject to personal perceptions and interpretations. Three (NRF, NLT, and City of
Olympia) interviewees reported that it needs to be handled carefully in terms of
interpreting and communicating scientific findings to stakeholders, decision-makers, and
regulators. Furthermore, other non-monetary and hard-to-quantify values such as cultural
and spiritual values are difficult to measure and subject to individual perceptions and
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values given to specific ecosystem services. These difficult to measure ecosystem
services and values were stressed by two of the interviewees (Earth Economics and the
City of Olympia) as being an integral component to these types of projects and
complimentary to scientific data. One respondent clearly articulated the importance of
different values of ecosystem services saying that,
There’s cultural value that begins with the tribes’ historical use of the area and
reaches to modern times with uses such as recreation. One person might be
willing to pay for this cultural value, while another would say it’s priceless. The
concept of value lies with individual perception… so how does a community put
value on preserving an ecosystem? How non-scientific aspects, such as the
concept of value, relate to or compete with other factors and the roles they play in
preserving an ecosystem, are very important considerations, definitely part and
parcel to the role of scientific data.
Donna Buxton-City of Olympia

The Role of Institutional Mechanisms
In response to an open-ended question about the role of institutional mechanisms,
one of the main themes that was reported by seven participants (DOH, Earth Economics,
DNR, NLT, WFPA, and NRF) pertained to the crucial support of DNR and the legislative
direction they received to lead the pilot projects. These interviewees pointed at DNR’s
steady backing, resources, authority, and connections with other agencies and
organizations as vital institutional components to the pilot project. The apparent role of
institutional mechanisms as the critical foundation and underpinnings for the pilot project
was explicitly reported by five interviewees (DNR, NNRG, City of Olympia, and DOH),
which involved the initial legislative direction that led to exploring PES as a tool for
forest conservation.

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Furthermore, the partnerships and collaboration of committed organizations and
individuals were reported by five interviewees (Hancock, DNR, Earth Economics, DOH)
as being essential to the project as well as its continued forward progress. These
interviewees pointed specifically to the core team that brought their own experience and
resources to the table to collectively develop the project. The Nisqually Land Trust and
its experience with market-based transactions and the Nisqually River Council with its
diverse stakeholder participation were named as important private institutional forces in
the pilot project. Five respondents (NNRG, WFPA, NRF, DNR, and Hancock) discussed
the role of The University of Washington’s Northwest Environmental Forum, which
provided a venue for communication and facilitated learning across organizations and
groups, as a crucial institutional component of the pilot project.
Regulatory mechanisms and different agencies involved in natural resources
management were discussed by six interviewees (NRF, Nisqually Tribe, DNR, NNRG,
Swedeen Consultants, and DOH) to be important institutional settings that have complex
dynamics and relationships with creative mechanisms such as PES programs for
conservation. These interviewees discussed that the pressure to find innovative solutions
and tools for conservation and long-term protection stem from the Forests Practices Act
and the Clean Water Act and requirements to meet water quality standards, which
encourages finding creative solutions and ways to meet regulations more efficiently. Four
of these respondents explicitly discussed the need for regulatory agencies to recognize
and support PES programs and the development of creative mechanisms for forest
conservation that exceed the regulatory requirements. Furthermore, if forest practices
aren’t meeting CWA standards it would result in the need to change regulations.
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However, adaptive management is often difficult and time intensive. As the following
interviewee articulated, the potential for changing regulations over time could also
undercut that solid foundational role that institutional and regulatory mechanisms were
reported as playing for this pilot project.
An important underpinning and foundation of any ecosystem services transaction
is the regulatory baseline, and in our case, this means the Forest Practices Act
and the Clean Water Act. One of the interesting things about Forest Practices is
the adaptive management program, which can mean that the regulatory baseline
changes over time.
Dan Stonington-NNRG

The Role of Stakeholder and Public Involvement
The Nisqually pilot project core team (six of the key stakeholder interviewees)
was a partnership between several organizations including DNR, NNRG, the NRF,
Sweden Consultants, and the NLT. Eight of the interviewees (Swedeen Consultants,
DOH, DNR, NNRG, NRF, Hancock, Nisqually Tribe) reported that the core team and
this small group of committed stakeholders has been critical to the pilot project. The core
team was seen as the driver that organized other stakeholders, developed the project on
the ground, and kept it going forward. The larger group of stakeholders and landowners
were also reported by these eight respondents as providing vital input to contribute to the
discussion and shape the development of the pilot project. The point was made by three
of these participants about the unpredictable role of individuals and the influence of key
staff members in organizations to sway the project objectives and outcomes, or to
continue driving it forward despite obstacles that appear along the way. These
stakeholders and active participants are drivers of the process and through the lens of the
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ACF, the beliefs and preferences of these individuals are seen as critical influencing
factors, and thus were the focus for survey questions.
However, the general public, which in this project is seen as the active citizens
that influence government officials and public policy, was stated by nine participants
(Nisqually Tribe, DNR, NNRG, NLT, WFPA, City of Olympia, Earth Economics, and
DOH) as being either not involved at all or only remotely involved through public
agencies such as DNR. There was an apparent contradiction that arose from the interview
responses on the appropriate role of public involvement. Three of the respondents
(Swedeen Consultants, NLT, and NRF) discoursed that it was too early to involve the
public, that a successful pilot project was needed to point to as an example of how it can
work before bringing the idea to the public for additional support.
On the other hand, four interviewees (Nisqually Tribe, WFPA, Earth Economics,
and DNR) discussed the need for more public awareness, input, and support for the pilot
project. These respondents emphasized the need for public understanding and support for
these types of projects that concern public benefits, especially for the completion of an
actual transaction that involves public funds. As would be the case with the City of
Olympia’s water utility rate payers being the buyers and beneficiaries in this proposed
PES program.
I don't feel like we got the level of input that would have been beneficial as far as
public involvement… I think that if we had more outreach, public outreach, it
would have been more supported by the rate payers and then [the City of
Olympia] would've felt like they needed to follow through with it.
Nahal Ghoghaie-WSDNR

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Two respondents pointed out that these kinds of creative mechanisms of PES that deal
with social goods and public services need strong public support and input in order to
succeed. They shared the concern that, if the public is unaware and doesn’t support it or
doesn’t see the benefits of these kinds of pilot projects, they are not likely to endure even
with the support of stakeholders.
With these kind of creative mechanisms I think they only work if there is strong
public support, there's going to be potentially changes and if the public doesn't
see the benefit, then it really isn't going to go anywhere. We've got a unique body
with the Nisqually River Council that as a group of stakeholders are really
supportive of creative and innovative things and are really supportive of this
process. I think that's really important.
David Troutt-Nisqually Tribe

However, it was pointed out by two interviewees (Earth Economics and Nisqually
Tribe) that organizations were involved that represent the public, larger groups of
stakeholders, private landowners, and people who live in the watershed. The Nisqually
River Council for example, has a long history of innovative watershed management and
restoration efforts and a large group of supportive stakeholders from a wide variety of
backgrounds including representatives of government agencies, non-profit organizations,
and citizens and landowners in the Nisqually Watershed. Having this support from one of
the oldest watershed councils in the U.S. that has been nationally recognized for such
efforts was explicitly mentioned by two interviewees (Nisqually Tribe and DNR) as
being invaluable and extremely beneficial for the pilot project in getting the involvement
of a larger group of stakeholders that have strong connections to the Nisqually Watershed
and the communities therein.

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Other Critical Factors
The main theme in responses to the question about what other factors were critical
to the pilot project was reported by nine of the interviewees (NRF, Nisqually Tribe,
NNRG, WFPA, NLT, Earth Economics, Swedeen Consultants, and DOH) and pertained
to market demand and the availability of funding. These respondents discussed the
institutional and market mechanisms that are needed to drive the demand for ES and
provide funding for transactions but two interviewees (Swedeen Consultants and WFPA)
pointed out that developing PES programs and creative funding mechanisms takes time
and long-term commitments.
Furthermore, the application of PES is still new and four interviewees (NNRG,
NRF, NLT, and Earth Economics) discussed the role of other regulatory agencies and
institutional support and emphasized that PES programs still need institutions and
regulatory agencies to recognize ES and drive market development. Also, three
respondents (WFPA, Hancock, and NLT) emphasized that in order to get larger
landowners on board, the PES mechanism for conservation need to be widely recognized
and make economic sense to their investors.
Four interviewees (NNRG, Earth Economics, The Nisqually Tribe, and WFPA),
also discussed the pressing need to convince watershed services beneficiaries and buyers
of the value and investment opportunity of natural capitol to increase demand and
develop a market for ecosystem services. For example, convincing communities and
decision-makers to invest in the natural flood reduction capacity of wetlands not only
provides numerous environmental and public benefits but also is less costly than letting

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the wetland get developed or degraded and repairing damages to infrastructure or homes
every time it floods. This pilot project is also a good example because one of the primary
objectives was to increase investments in forested ecosystems and protect water filtration
services of the watershed. Watershed development for residential or industrial uses
results in degraded ecosystem structure, functions, and services. One of the negative
consequences of watershed development would be that water utilities would have to build
more expensive water quality treatment plants. There are many examples of the practical
benefits of investing in natural capital and taking proactive measures to protect ecosystem
services. One of the challenges identified by interviewees is to communicate those
benefits of investing in natural capital to the public, decision-makers, and buyers of
watershed services such as water utility companies.
Another theme that appeared in two interviewee responses (Earth Economics and
Swedeen Consultants) and that was central to the concept of PES, was the need for
broader recognition of environmental externalities and the development of mechanisms
such as PES programs to internalize those. These interviewees discussed people’s
perceptions of common-pool resources and their subsequent actions affecting ecosystems
and the need to change those in order to better protect the environment that we all share.
Along these lines, the positive and negative environmental externalities associated with
common-pool resources could be internalized in the economic system through marketbased conservation methods. This relates to the basic conceptual framework of PES
programs, to provide a common ground and common language for scientists,
stakeholders, and environmental policy decision-makers in order to internalize these
externalities that lead to degradation of common-pool resources. These interviewees
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explained how the primary goal of these kinds of PES programs is to ensure that
individuals or landowners that are protecting and maintaining ecosystem services
continue to provide those positive externalities and public benefits associated with them.
On the other hand, the objective would also be to ensure that the creators of negative
externalities and environmental impacts are responsible for their actions. Either way,
common-pool resources have environmental externalities that need to be internalized and
accounted for in our political and economic systems in an effort to close the loop and
increase the sustainability of our environment, economies, and communities.

Stakeholder Communication
Communication between stakeholders was facilitated through partnerships with
organizations, regular meetings of the core team, and the NW Environmental Forum.
When asked if there was a specific type of stakeholder communication that either did or
should in the future promote a positive outcome for watershed services, four of the
interviewees (DOH, NLT, NRF, and the City of Olympia) reported that face-to-face
stakeholder meetings were important, especially early on in the process of developing the
project in order to brainstorm ideas and see what works for everyone (particularly buyers
and sellers).
As far as communicating the concepts and getting the idea out to a broader group
of stakeholders, one-on-one communication was reported as being very beneficial by
three of the interviewees (NLT, NRF, and the City of Olympia). Initial contact would
often be made by email or phone and these respondents emphasized direct
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communication with landowners (sellers) and buyers to explain the project, get a better
understanding of their perspectives and preferences, and clear up any confusion. Two of
these respondents also further discussed the usefulness of a short, one-page information
sheet that could be sent following initial contact for more basic information on PWS
programs, how it works and the benefits.
A lot of the best progress was made with that one-on-one communication, it may
start with a phone call then a meeting, especially with landowners and buyers and
sellers, really taking a chance to spend some time together and delve deep into it.
Justin Hall-NRF

The need for a marketing and communication campaign to communicate concepts
and ideas to the general public, elected officials, and decision-makers was considered by
eight (Nisqually Tribe, DNR, NNRG, the City of Olympia, WFPA, Earth Economics, and
Swedeen Consultants) interviewees to be crucial for building more support for the pilot
project and the future development of PES conservation mechanisms. The messaging
surrounding the benefits to the long-term water supply and the public benefits of these
kinds of projects was stressed by these eight respondents as an important part of a
broader communication strategy to get the public and decision-makers to understand the
importance of this kind of project in order to achieve conservation goals. Another
interviewee (DNR) discussed the need for communication that is pragmatic and
communicates the different possible outcomes including the ones that are in the public
interest and that have a limited time frame to accomplish them. This suggested approach
to communication would use proactive stories and examples about securing the common
future in order to get people on board.
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Level of Agreement
The majority of stakeholders interviewed (11 out 12) described the level of
agreement on the efficacy and desirability of this kind of approach to achieving positive
watershed outcomes as relatively strong overall in terms of the intent, basic concepts, and
goals of the pilot project. The highest areas of agreement and support were identified as
being among the core team’s organizations, the Dept. of Health, and especially DNR.
The importance of DNR’s role in the project should not be underestimated.
Without the leadership of key staff, the whole project would not have moved
forward. Moreover, the weight of having the State agency responsible for
management of public lands-forested lands-gave additional credibility to the work
of the Nisqually Watershed Services Pilot Project.
Tracy Stanton-Earth Economics

Four interviewees (Swedeen Consultants, NNRG, Hancock, and the Nisqually Tribe) also
said that it was too early to tell the actual level of agreement because the pilot project is
still being discussed and the specific approach is being developed further among the
organizations involved. The respondent (Hancock) that did not report that the level of
agreement was high in regards to the basic idea and goals mentioned that it was just too
early to determine for this pilot project.
However, there was indication by five of the interviewees (DNR, NNRG, Earth
Economics, Swedeen Consultants, and DOH) that agreement declined over time or went
in a different direction than originally planned and these respondents pointed out minor
disagreements as far as specific methods for the transaction. Areas that were described as
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lower in agreement included different ideas about the funding mechanism and the attitude
of regulatory agencies towards non-regulatory methods of achieving goals. The ways
agreement changed were identified as being primarily surrounding a low level of
understanding and communication of scientific information, specifically the results from
the USGS groundwater model.

Challenges and Lessons
One of the main themes in challenges for the pilot project that eight of the
interviewees discussed had to do with the scientific quantification and justification of
payments for watershed services. Four of the interviewees (NRF, DNR, WFPA, and
Swedeen consultants) further elaborated on the role of scientific information and the
challenges to the scientific justification of PES. These specific challenges were described
as issues with measuring both the value of specific ecosystem services, and the additional
benefits (additionality) that result from the action taken by the landowner in exchange for
the payment they receive for providing or protecting those services. Challenges with the
measurement of specific ecosystem services and additionality were tied to the limitations
of and demand for science and the need to act with limited time and resources.
One of the trickiest things is what's the service being provided? Is that
sedimentation prevention? How do you measure it? If it’s water temperature how
do you measure it? How do you know you're having an impact? Things like that,
what we're learning about science is mostly that we need more of it.
Joe Kane-NLT

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Issues were reported with new scientific information that was generated,
specifically with the scope and focus of the research done by USGS on the relationship
between forest cover and groundwater as well as the interpretation and communication of
the information they generated. Three of the interviewees (NNRG, Swedeen Consultants,
and Earth Economics) discussed the new scientific information generated through the
USGS groundwater model and expressed that it was frustrating due to issues with this
aspect of the project, which included concerns that it didn’t ask the right questions in
terms of how forest soils actually affect the water quality and prevent contamination from
getting to the wellhead. Instead the focus was primarily on how forest cover influences
groundwater flow patterns and transportation rates through the wellhead protection area.
These participants expressed concern that the study results showing that forest cover did
not significantly affect the time of travel for contaminants to enter the aquifer were
misinterpreted by the potential buyers and may have had a counterproductive role in
realizing a transaction. One interviewee clearly articulated these concerns stating that,
Unfortunately, I think that the information that USGS worked hard to generate
was not productive. Their work wasn’t focused on quite the right question and as
a result I think the results were misinterpreted.
Dan Stonington-NNRG

Challenges with institutional mechanisms and other public policy and regulatory
tools were conferred by five interviewees (NRF, DNR, NNRG, NLT, and WFPA) that
highlighted the need for clear legislative direction, broad recognition of payments for
ecosystem services methods, and innovative thinking outside of traditional methods for
conservation. Seven (Nisqually Tribe, Hancock, DNR, NNRG, Swedeen Consultants,
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Earth Economics, and DOH) of the key stakeholders discussed that institutional
mechanisms to support these kinds of ecosystem services transactions are not present or
not developed enough and that there are challenges with current regulatory systems and
operational structures. These participants discussed regulatory programs and mechanisms
such as the Clean Water Act (CWA) and Forest Practices Law and regulatory agencies
that need to consider how they can include ES valuation and payment mechanisms for
forest conservation. Four of these respondents revealed that the current inflexible
regulatory mechanisms present a challenge to PES for various reasons and discussed the
complex dynamics between regulatory agencies and market-based programs. The
relationship of regulatory programs and market-based programs is complicated and there
could potentially be conflict when they are focusing on the same outcomes. A general
example would be the relationship between the Forest Practices Law, the Clean Water
Act, and market-based conservation programs all aimed at improving forest practices and
water quality. One interviewee provided an example from the pilot project in which the
property targeted for watershed services payments was outside of city limits and within
Thurston County’s authority to regulate land-uses and protect the water resources.
The regulatory entity that was in the picture with regard to the city of Olympia
was Thurston County exercising its land-use and zoning authority, because the
city of Olympia was saying we need to buy certain outcomes here that are
protective of our water supply, that could be seen as a vote of no-confidence in
the county’s zoning to provide those outcomes.
Craig Partridge-WSDNR

Furthermore, these respondents elaborated on the current institutional structures and
concerns that they are not fully supportive of these kinds of creative mechanisms. One
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interviewee in particular (Nisqually Tribe Natural Resources Director) articulated the
issue that current institutional mechanisms were developed without the idea of PES and
trying to fit these concepts into those well-established systems can be very difficult, thus
new pathways are needed through these present operational structures.
Finding creative mechanisms for funding was one of the main goals of this pilot
project and eight of the stakeholders discussed the challenges of securing funding and
cultivating the market demand that is needed to drive PES projects such as this.
Theoretically, PES programs can potentially address inherent issues with limited revenue
for conservation and restoration programs. However, concern was raised by two
respondents (DOH and the Nisqually Tribe Natural Resources Director) that regulations
could be a barrier for PES program implementation in small rural communities that are
struggling to meet requirements and that funding mechanisms need to bring funds to
more rural areas to protect ecosystem services. These respondents emphasized that it is
important for institutional systems to support creative solutions for new funding
mechanisms, especially ones that bring financial capital from urban areas to more rural
areas that lack funding but are rich in natural capital.
Competing costs are also a challenge and were stated by two interviewees (WFPA
and City of Olympia) as an important consideration as well as the assessment and
perception of risk to the environment and where the money can be made to go the
farthest, or where the “biggest bang for the buck” is. There is often a trade-off between
priority areas of conservation and other areas that have risk and the effort and resources
required to protect them as well as the interests of the community. This trade-off was
clearly articulated by the representative stakeholder for the City of Olympia, who said,
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A particularly difficult challenge was realizing the value of the opportunities to
help preserve part of an ecosystem while weighing those opportunities against
other needs that require limited ratepayer funds... needs that benefit citizens of a
City that relies on drinking water outside City limits. How does the opportunity
to invest in specific parcels weigh-in with respect to other competition for the
limited revenue received from ratepayers, that's a huge challenge… It’s a
balancing act of what makes sense in terms of weighing the relative risks affecting
all our water sources, while not diminishing the importance of McAllister being
our primary water source, while also striving to be accountable for limited
revenue, to our rate payers, and for competing costs with infrastructure.
Donna Buxton-City of Olympia

This concern is especially an issue with common-pool resource issues and environmental
problems that are numerous and costly to address with limited public funds.
An interesting point discussed for lessons and creative solutions for the funding
challenge was to combine beneficiaries (buyers) to increase funding for PES projects. For
example, funds can be combined from rate payers of a city’s water utilities with other
funds from beneficiaries of increased forest cover in a watershed, such as salmon
restoration programs. Developing partnerships and aggregating buyers to increase
funding may be an important next step to advance the viability of PES programs on a
larger regional or statewide scale.
The primary positive lesson emphasized by eight of the interviewed key
stakeholders (Nisqually Tribe, DNR, NNRG, WFPA, Earth Economics, City of Olympia,
Swedeen Consultants) was the need for clear communication and getting the messaging
right around the subject of PES programs and the valuation of ecosystem services in
order to raise awareness and support with the broader public, regulators, and decisionmakers. These eight interviewees reported the importance of mounting a good

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communication campaign to educate the community and show people the value of
ecosystem services. Four interviewees highlighted the need to communicate the basic
concepts of PES programs to the broader public and show people that investing in
ecosystem services can provide some regulatory relief and can be less expensive than
responding to a crisis after the fact. Communicating the value of natural capital, gaining
citizen support, and getting buyers on board was considered a critical step for the
implementation and future development of PES programs.

Survey Results
There were 49 survey participants. Respondents were categorized according to
their organization affiliation for the purpose of a stakeholder analysis and for anonymity.
Respondents selected their stakeholder group from the following 6 categories: Individual
(landowner) (n=13), local government (n=6), Non-Governmental Organization (NGO)
(n=8), conservation non-profit organization (n=4), other (n=6), and State, Federal, or
Tribal agency (n=12). The stakeholders that answered “other” specified their organization
and answers were from individuals that fell under more than one affiliation such as, NRF
board member and Nisqually Delta Association board member, private landowner and
NGO, private landowner and landscaping contractor, or that were truly in the “other”
category such as, Wildlife Park or Nisqually Volunteer Stream Steward. Analysis of
responses to each question in the survey was initially completed to comprehend the mean
response, standard deviation, and the general make-up of responses to each question

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regardless of stakeholder organizational affiliation. These overall perceptions of the
survey population are shown in Table 1 and discussed in the following sections.

Table 1. Mean responses across stakeholder groups to scaled research questions.
(1=strongly disagree, 2=disagree, 3=neutral, 4=agree, 5=strongly agree)

Part I: Attitudes towards watershed services in the Nisqually Watershed
Mean

Standard
Deviation

Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

It is important to conserve
watershed services for future
generations

4.77

0.66

83.33%

14.58%

0.00%

0.00%

2.08%

It is important to spend
money and use public funds
to conserve watershed
services

4.55

0.82

67.34%

24.48%

2.04%

2.04%

2.04%

The quality of watershed
services from the Nisqually
watershed is high

4.22

0.82

40.81%

44.89%

12.24%

0.00%

2.04%

Column1

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Part II: Perceptions of the severity and causes of problems for watershed services
Mean

Standard
Deviation

Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Pollution is a severe
environmental problem for
watershed services

3.90

1.05

30.61%

42.85%

16.32%

6.12%

4.08%

Increased impervious
surfaces (e. g. pavement) is a
severe environmental
problem for watershed
services

4.29

0.91

51.02%

32.65%

12.24%

2.04%

2.04%

Fewer forested areas is a
severe environmental
problem for watershed
services

4.18

0.99

42.86%

57.14%

4.08%

4.08%

4.08%

The accumulation of many
individual actions (such as
the use of lawn chemicals or
littering) is a major cause of
environmental problems for
watershed services

4.24

0.85

42.86%

44.90%

8.16%

2.04%

2.04%

Land use decisions of private
land owners are a major
cause of environmental
problems for watershed
services

3.77

1.08

25.00%

45.83%

14.58%

10.42%

4.17%

Natural resource
management practices on
public lands are a major
cause of environmental
problems for watershed
services

3.06

1.14

8.16%

30.61%

32.65%

16.33%

12.24%

Natural resource
management on private lands
(e.g. logging and related
erosion and sediment
deposition) are a major cause
of environmental problems
for watershed services

3.69

1.25

28.57%

38.78%

16.33%

6.12%

10.20%

Farming practices and
related nutrient inputs are a
major cause of
environmental problems for
watershed services

3.79

0.98

21.28%

48.94%

21.28%

4.26%

4.26%

Human development (e. g.
deforestation and conversion
to housing) is a major cause
of environmental problems
for watershed services

4.41

0.89

57.14%

34.69%

2.04%

4.08%

2.04%

Column1

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Part III: Potential Solutions for watershed services in the Nisqually Watershed
Mean

Standard
Deviation

Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Stronger enforcement of
existing regulations and/or
stricter regulations are good
ways to improve the
environmental quality of
watershed services

3.76

1.11

24.49%

46.94%

14.29%

8.16%

6.12%

Increased public land
ownership (i.e. government
agencies) is a good way to
improve the environmental
quality of watershed services

3.44

1.07

14.58%

39.58%

25.00%

16.67%

4.17%

Government guidance of land
and natural resource use on
private property through land
rights and/or zoning is a good
way to improve the
environmental quality of
watershed services

3.53

1.06

10.20%

57.14%

16.33%

8.16%

8.16%

Providing financial
incentives to private
landowners for sustainable
resource management and
stewardship practices is a
good way to improve the
environmental quality of
watershed services

4.38

0.71

51.06%

36.17%

12.77%

0.00%

0.00%

Column1

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Part IV: Relative Importance and preferences for watershed services
Column1

Mean

Standard
Deviation

Least
Important

2

3

4

Most
Important

Quality and quantity of
water resources provided by
watersheds

4.55

82.91%

2.13%

2.13%

2.13%

25.53%

68.09%

Traditional industry of
logging in forested
watersheds

3.19

113.52%

8.51%

17.02%

34.04%

27.66%

12.77%

Traditional industry of
fishing in watersheds

3.76

111.92%

4.35%

10.87%

17.39%

39.13%

28.26%

Traditional industry of
farming in watersheds

3.43

109.83%

6.38%

12.77%

27.66%

38.30%

14.89%

Places for public
recreational activities in
watersheds

3.81

92.40%

2.13%

8.51%

12.77%

55.32%

19.15%

Wildlife habitat and
biological diversity in
watersheds

4.45

92.80%

4.26%

0.00%

4.26%

29.79%

61.70%

Attitudes Toward Nisqually Watershed Services
The first questions asked in the survey pertained to attitudes towards watershed
services in the Nisqually Watershed. The questions were designed to better understand
stakeholder beliefs at the deep core and policy core levels, including whether or not it is
important to conserve watershed services for future generations, to spend money and use
public funds to conserve watershed services, and opinions on the quality and watershed
services in the Nisqually Watershed. Most survey respondents (97.91%) agreed
(responded with a 4 or 5) that it is important to conserve watershed services for future
generations. Survey respondents also mostly agreed (91.82%) that it is important to spend
money to conserve watershed services and only 4.08% disagreed (responded with a 1 or
2). Survey respondents primarily agreed (85.7%) that the quality of watershed services
from the Nisqually Watershed is high, and 12.24% responded neutral to the question.
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Analysis of mean responses among stakeholder groups using one-way ANOVA
for each question and the Tukey-Kramer method, also known as Tukey’s Honest
Significant Difference (HSD) test, found no significant difference in mean responses
between stakeholder groups with regards to their attitudes towards watershed services.
This indicates that there was general agreement among all stakeholder groups on the
importance of conserving watershed services for future generations, the importance of
spending money to conserve watershed services, and that the quality of watershed
services is high in the Nisqually Watershed.

Figure 7. Mean responses across stakeholder organizations about attitudes toward watershed services in the Nisqually
Watershed

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Severity and Causes of Environmental Problems for Watershed Services
Research has identified a number of factors that can contribute to environmental
problems for watershed services in the Nisqually Watershed, including pollution,
increased impervious surfaces, fewer forested areas, individual actions, land-use
decisions, natural resource management, farming practices, and human development.
Most respondents agreed (73.46%) that pollution is a severe environmental problem,
while 16.32% were neutral and 10.2% disagreed. Increased impervious surfaces were
largely agreed upon as a severe environmental problem (83.67%) but 12.24% of
respondents answered neutral. Respondents mostly agreed (87.76%) that fewer forested
areas are a severe problem. The accumulation of many individual actions (such as the use
of lawn chemicals or littering) were agreed upon as a severe environmental problem
(87.76%). 70.83% of respondents agreed that land-use decisions of private landowners
are a severe environmental problem, 14.58% were neutral, and 14.58% disagreed.
For the question about natural resource management practices on public lands,
38.78% of respondents agreed it was a major cause of environmental problems for
watershed services, 28.57% disagreed, and 32.65% answered neutral. With regards to
natural resource management practices on private lands (such as logging and related
erosion), 67.35% of respondents agreed it was a major cause of problems, 16.33%
disagreed, and 16.33% answered neutral. Respondents mostly agreed (70.21%) that
farming and related nutrient inputs were a major cause of environmental problems but
21.28% answered neutral. Human development was agreed upon the most out of all the
questions regarding severity and causes of environmental problems for watershed
services, with 91.84% of respondents that agreed it was a major cause.
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Analysis of mean responses among stakeholder groups using one-way ANOVA
for each question and Tukey’s HSD test found no significant differences for any of the
questions pertaining to the severity and major causes of environmental problems for
watershed services. However, there were notable differences between mean responses of
organizations with regards to specific questions about the causes of problems for
watershed services (Figure 8). Most notably, the mean responses to the question about
natural resource management on private lands ranged from 3 (local gov) to 4.25 (State,
Fed, or Tribal agencies), although this was not considered a statistically significant
difference (F = 1.51, p = 0.21). The mean responses to the question about land-use
decisions of private landowners ranged from 3.17 (local gov) to 4.34 (State, Fed, or
Tribal agencies), although this was not considered significant (F = 1.35, p = 0.26). Mean
responses to the question about many individual actions ranged from 3.5 (non-profits) to
4.58 (State, Fed, or Tribal agencies), although this was not considered significant (F =
1.3, p = 0.28). The mean responses to the question about increased impervious surfaces
ranged from 3.75 (non-profits) to 4.67 (State, Fed, or Tribal agencies), although this was
not considered significant (F = 1.41, p = 0.24). This indicates that there is general
agreement, but a relatively large range in levels of agreement, among stakeholder groups
on the severity and causes of environmental problems for watershed services in the
Nisqually Watershed.

95

Figure 8. Mean responses across stakeholder groups about causes and severity of problems for watershed services in the
Nisqually Watershed

Potential Solutions for Watershed Services in the Nisqually Watershed
Research has identified potential solutions for natural resource management
issues (such as the protection of watershed services), including stronger enforcement of
existing regulations and/or stricter regulations, increased public landownership (i.e.
national parks or ownership by government agencies), government guidance of land and
natural resource use on private property through land rights and zoning, and providing
financial incentives to private landowners for activities such as sustainable resource
management or stewardship practices. Most respondents agree (71.43%) that stronger
enforcement of existing regulations and/or stricter regulations are good ways to improve

96

the environmental quality of watershed services. Just over half (54.17%) of respondents
agreed that increased public landownership was a good way to improve watershed
services, a quarter of the respondents answered neutral, and 20.83% disagreed. Survey
respondents had 67.35% agreement that government guidance of land and natural
resource-use on private property is a good way to improve watershed services, 16.33%
disagreed, and another 16.33% answered neutral. A large majority of the survey
respondents agreed (87.23%) that providing financial incentives to private landowners
was a good way to improve watershed services, 12.77% answered neutral, and no one
disagreed.
Analysis of mean responses across stakeholder groups using one-way ANOVA
for each question and Tukey’s HSD test found no significant differences among
stakeholder groups. However, there are certain notable differences among mean
responses to these questions regarding potential solutions. Responses to these questions
demonstrated a relatively large range in mean responses among stakeholder groups
(Figure 9). The mean responses among groups to the question about stronger enforcement
and/or stricter regulations ranged from 3.31 (individuals) to 4.17 (other), although this
was not considered a statistically significant difference (F = 0.75, p = 0.59). For the last
question pertaining to financial incentives as a good way to improve watershed services,
mean responses indicated that local governments had the lowest level of agreement
(mean=4) and conservation non-profit organizations had the highest level of agreement
(mean=5), although this was not considered significant (F = 1.71, p = 0.15). These results
indicate that there is general agreement, but a relatively wide range in levels of

97

agreement, among stakeholder groups on potential solutions to environmental problems
facing the Nisqually Watershed.

Figure 9. Mean responses across stakeholder organizations to questions about potential solutions to
problems for watershed services in the Nisqually Watershed

Relative Importance and Preferences for Watershed Services
Stakeholder preferences and values for specific watershed goods and services are
important considerations for ecosystem managers. Part IV of the survey asked
respondents to rank watershed goods and services according to the relative level of
importance of each for protection in the Nisqually Watershed (1 = least important – 5 =
most important). The watershed goods and services ranked were: quality and quantity of
water resources provided by watersheds, logging in forested watersheds, fishing in
forested watersheds, farming in forested watersheds, places for public recreation, and
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wildlife habitat and biological diversity in watersheds. Most of the respondents (93.62%)
agreed that maintaining the quality and quantity of watershed resources was most
important (answered 4 or 5). Only 40.43% of the respondents replied that logging was
important and 25.53% replied that it was least important (answered 1 or 2). 67.39% of
respondents thought that fishing was important and 15.22% responded that it was least
important. Just over half (53.19%) of respondents thought farming was important and
19.15% said it was least important. Nearly three quarters (74.47%) of all respondents
replied that places for public recreation was most important and only 10.64% thought it
was least important. The respondents largely (91.49%) believed that wildlife habitat and
biological diversity were among the most important watershed services to protect.
Analysis of mean responses across stakeholder groups using one-way ANOVA
for each question and Tukey’s HSD test indicated that there was a significant difference
among mean responses for the question pertaining to the importance of wildlife habitat
and biological diversity (F=2.56, p=0.04). Significant differences were reported between
State, Federal, or Tribal agencies (mean=5) and conservation non-profit organizations
(mean=3.5). There were not statistically significant differences between the mean
responses of the other stakeholder groups, which fell between the range of 4 (local
governments) and 4.67 (other). This indicates that there are relatively large differences in
the perspectives among stakeholder groups (particularly State, Federal, or Tribal agencies
and conservation non-profit organizations) for the importance of protecting and
maintaining wildlife habitat and biological diversity as an ecosystem service in the
Nisqually Watershed.

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Figure 10. Mean responses across stakeholder organizations about the relative importance of watershed goods and services
in the Nisqually Watershed

Identifying Potential Coalitions
Two K-means cluster analysis were performed, one on the first three categories of
questions that were about level of agreement and the second on the fourth category of
questions that asked respondents to rank watershed goods and services according to
relative importance and with consideration to limited available resources for
conservation. A preliminary exploration of qualitative and quantitative data was the first
step to identifying potential stakeholder coalitions. Hierarchical cluster analysis using
Ward’s method and applying squared Euclidian distances as the similarity measure was
used to determine the optimal number of clusters prior to running the K-means cluster
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analysis. Analysis of the first three categories of questions in the survey dataset revealed
two main groups who shared similar values and were distinctly different from the other
groups based on their responses. Respondents were coded according to their potential
coalition identified from the K-means cluster analysis of two clusters. Potential coalitions
were identified through analysis of mean responses to survey questions as well as
thematic coding of qualitative responses to interview questions. The two coalitions were
thematically named according to similar beliefs:
1. Problems for watershed services in the Nisqually Watershed are primarily caused
by human development, increased impervious surfaces, and the accumulation of
many individual actions. These problems need immediate action using best
available science and a combination of regulatory methods and market-based
incentives.
2. Problems for watershed services in the Nisqually Watershed are primarily caused
by human development and the accumulation of many individual actions, but not
by land-use decisions or natural resource management on private lands. These
problems need to be addressed using market-based incentive approaches, not
government guidance or regulatory methods.

Table 2 shows mean responses to the survey questions for each coalition. The largest
differences in mean responses for each question primarily pertain to the causes of
problems. Specifically Coalition 2 disagrees that land-use decisions of private
landowners or natural resource management on private lands are a major cause of
environmental problems. These potential coalitions are supported by responses to
interview questions regarding institutional and regulatory mechanisms.

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Table 2. Mean responses across coalitions to scaled research questions.
(Bold text indicates largest differences in mean responses)

Part I: Attitudes towards watershed services in the Nisqually Watershed
Coalition 1 Mean
Responses

Coalition 2 Mean
Responses

It is important to conserve watershed services for future generations

4.95

3.60

It is important to spend money and use public funds to conserve
watershed services

4.79

3.40

The quality of watershed services from the Nisqually watershed is high

4.29

4.00

Part II: Perceptions of the severity and causes of problems for watershed services in the Nisqually
Watershed
Coalition 1 Mean
Responses

Coalition 2 Mean
Responses

Pollution is a severe environmental problem for watershed services

4.16

2.40

Increased impervious surfaces (e. g. pavement) is a severe environmental
problem for watershed services

4.53

2.60

Fewer forested areas is a severe environmental problem for watershed
services

4.37

2.80

The accumulation of many individual actions (such as the use of lawn
chemicals or littering) is a major cause of environmental problems for
watershed services

4.39

3.20

Land use decisions of private land owners are a major cause of
environmental problems for watershed services

4.05

2.00

Natural resource management practices on public lands are a major cause
of environmental problems for watershed services

3.21

1.60

Natural resource management on private lands (e.g. logging and related
erosion and sediment deposition) are a major cause of environmental
problems for watershed services

3.92

2.00

Farming practices and related nutrient inputs are a major cause of
environmental problems for watershed services

4.08

2.20

Human development (e. g. deforestation and conversion to housing) is a
major cause of environmental problems for watershed services

4.66

3.40

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Part III: Potential Solutions for watershed services in the Nisqually Watershed
Coalition 1 Mean
Responses

Coalition 2 Mean
Responses

Stronger enforcement of existing regulations and/or stricter regulations
are good ways to improve the environmental quality of watershed
services

3.97

2.60

Increased public land ownership (i.e. government agencies) is a good
way to improve the environmental quality of watershed services

3.55

2.40

Government guidance of land and natural resource use on private
property through land rights and/or zoning is a good way to improve the
environmental quality of watershed services

3.76

2.00

Providing financial incentives to private landowners for sustainable
resource management and stewardship practices is a good way to
improve the environmental quality of watershed services

4.42

3.80

Part IV: Relative Importance and preferences for watershed services
Coalition 1 Mean
Responses

Coalition 2 Mean
Responses

Quality and quantity of water resources provided by watersheds

4.69

4.29

Traditional industry of logging in forested watersheds

2.48

4.29

Traditional industry of fishing in watersheds

3.45

4.29

Traditional industry of farming in watersheds

2.97

4.29

Places for public recreational activities in watersheds

3.52

4.24

Wildlife habitat and biological diversity in watersheds

4.59

4.18

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Potential Coalition 1:
Problems for watershed services in the Nisqually Watershed are primarily caused by
human development, increased impervious surfaces, and the accumulation of many
individual actions. These problems need immediate action using best available science
and a combination of regulatory methods and market-based incentives.

Coalition 1 is made up of the majority of survey respondents (n=38) and consists
of representatives from all stakeholder groups based on organizational affiliation,
including NGOs, State, Federal, or Tribal agencies, Individuals, local governments,
conservation non-profit organizations, and other. Mean responses of Coalition 1 showed
high agreement on the questions pertaining to attitudes and indicated that this group
believes that it is important to conserve watershed services for future generations, and
spend money and public funds to do so.
Mean responses of Coalition 1 also indicated high agreement on several questions
regarding the severity and causes of environmental problems for watershed services.
Specifically, that major issues and causes of problems included increased impervious
surfaces, the accumulation of many individual actions, and human development
(conversion to housing). Mean responses of Coalition 1 also indicated a high level of
agreement on several potential solutions for improving watershed services, including
primarily providing financial incentives to private landowners combined with stronger
enforcement of regulations and/or stricter regulations, and government guidance of landuse and natural resource management on private property.

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Potential Coalition 2
Problems for watershed services in the Nisqually Watershed are primarily caused by
human development and the accumulation of many individual actions, but not by landuse decisions or natural resource management on private lands. These problems need to
be addressed using market-based incentive approaches, not more government guidance
or regulations.

Coalition 2 is made up of 5 survey respondents from individuals that identified
themselves with organizations including individuals, local governments, State, Federal,
or Tribal agencies, and other. There were no respondents in this coalition from NGOs or
conservation non-profit organizations. With regards to questions pertaining to core values
and attitudes towards watershed services, mean responses of coalition 2 indicated the
lowest level of agreement that it was important to spend money and use public funds to
conserve watershed services for future generations. Coalition 2 had the lowest mean
response for questions relating to the severity and causes of environmental problems for
watershed services. Specifically, this indicates that coalition 2 had the lowest level of
agreement that natural resource management on public and private lands are a major
cause of environmental problems for watershed services, and that land-use decisions of
private landowners are a major cause of environmental problems for watershed services.
Mean responses of Coalition 2 also indicated the lowest levels of agreement on
the questions that government guidance of land and natural resource use, increased public
land ownership, and stronger enforcement of existing regulations and/or stricter
regulations are good ways to improve the environmental quality of watershed services.
However, mean responses of Coalition 2 indicate that this group did agree that providing
financial incentives to private landowners for sustainable resource management and
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stewardship practices is a good way to improve the environmental quality of watershed
services.

Potential Coalitions Regarding the Relative Importance of Watershed Services
A separate K-means cluster analysis was run for the questions regarding relative
importance of watershed services in the Nisqually Watershed because the survey
structure was different than for previous questions. Respondents were asked to rate 6
different watershed services according to their level of importance (1 = least important –
5 = most important). Preliminary exploration of data also indicated that different groups
of stakeholders shared similar beliefs than for the previous questions. K-means cluster
analysis of the survey data subset showed two main clusters of stakeholder groups whose
shared values differentiated them from the other group, although there was some overlap
between coalitions. Respondents were also coded according to their potential coalition for
further analysis of stakeholder groups. Table 2. Part IV shows the mean responses for
relative importance of watershed services for each coalition. The potential coalitions were
thematically named according to their similar beliefs.

Potential Coalitions
A. The quality and quantity of water resources, and wildlife habitat and biological
diversity are the most important watershed goods and services to maintain in the
Nisqually Watershed.
B. All the watershed goods and services are important to maintain in the Nisqually
Watershed, including the traditional industries of logging, fishing, and farming.

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Coalition A consisted of 17 respondents from all six organizations (State, Federal, or
Tribal agencies, other, NGOs, local governments, individuals, and conservation nonprofits). Mean responses of Coalition A indicated the belief that the most important
watershed goods and services to maintain in the Nisqually watershed are the quality and
quantity of water resources (mean =4.69) and wildlife habitat and biological diversity
(mean = 4.59). Mean responses of Coalition A indicated that this group believes that the
traditional industries of farming and logging are of least importance (means = 2.97 and
2.48 respectively) to maintain in the Nisqually Watershed.
Coalition B consisted of 29 respondents primarily from State, Federal, or Tribal
agencies, NGOs, and individuals, with 3 respondents from other and 3 from local
governments. Mean responses of Coalition B indicated the belief that the quality and
quantity of water resources and the traditional industries of logging, farming, and fishing
were all of equally high importance (means = 4.29). Mean responses of Coalition B
indicated a slightly lower level of importance for places for public recreation and for
wildlife habitat and biological diversity in the Nisqually Watershed. However, the mean
responses of Coalition B indicate that this group believes that all watershed services are
nearly equally important (mean responses were between 4.18 and 4.29) to protect and
maintain in the Nisqually Watershed.

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Chapter 5: Discussion
The potential coalitions identified in this study support the Advocacy Coalition
Framework (ACF) hypothesis that coalitions will form around similar beliefs but
members will not necessarily be from the same organization or share similar preferences.
Many respondents that shared organizational affiliation responded differently to survey
and interview questions and were grouped into different coalitions. Additionally,
individual coalition members varied in their responses to certain survey questions, which
indicated differences in preferences within coalitions. For example, for the statement
“Government guidance of land and natural resource use on private property through
methods such as land rights and zoning is a good way to improve the environmental
quality of watershed services” the answers of Coalition 1 ranged from “disagree” to
“strongly agree.” Similarly, Coalition 2 responses to the statement “The accumulation of
many individual actions (such as the use of lawn chemicals or littering) is a major cause
of environmental problems for watershed services” ranged from “disagree” to “strongly
agree.” These differing responses within coalitions may reveal individual preferences and
secondary beliefs rather than divergent policy core beliefs around which coalitions often
form. Furthermore, the potential coalitions identified through cluster analysis
demonstrate a diversity of stakeholder categories. The only stakeholder organizations that
were not represented in both coalitions were NGOs and conservation non-profits, which
were absent from Coalition 2.
The potential coalitions that formed around similar beliefs regarding the
importance of maintaining individual watershed goods and services also demonstrated
differences in organizational affiliation. Coalition A was described based on common
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themes and mean responses to each question, which indicated a shared belief system that
the quality and quantity of water resources and wildlife habitat and biological diversity
are the most important watershed goods and services to maintain in the Nisqually
Watershed. This coalition consisted of representatives from all 6 organizations (although
there was only one respondent from a conservation non-profit organization). Likewise,
Coalition B was thematically described, based on the mean responses indicating a shared
belief system. The mutual importance placed on all the watershed goods and services
being maintained in the Nisqually Watershed also had representation from all 6
organizations. Furthermore, individual coalition members varied in their responses to
certain questions, which indicated differences in preferences within coalitions. For
example, Coalition A answers to the question pertaining to wildlife habitat and biological
diversity ranged from “least important” to “most important.” Similarly, Coalition B
answers to the question pertaining to maintaining fishing in the watershed ranged from
“least important” to “most important.” These variations in responses to specific questions
indicate a diversity of individual preferences for the most and least important watershed
services to maintain in the Nisqually Watershed.
The survey results also indicated differences in preferences and levels of
agreement in response to specific questions among stakeholder organizations. The most
significant of these were differences in preferences for watershed goods and services.
Specifically, wildlife habitat and biological diversity was ranked as most important on
average by State, Federal, or Tribal agencies whereas conservation non-profit
organizations gave it a mid-level (3.5) of importance relative to the other watershed
goods and services with consideration to limited available resources to protect these
109

services in the Nisqually Watershed. This result reflects the initial decision based on
stakeholder discussions to focus on watershed services such as the provision of drinking
water rather than biodiversity for the pilot PES program in the Nisqually Watershed.
There were also differences between organizations regarding beliefs about causes as well
as potential solutions to problems for watershed services (Figure 8 and Figure 9). These
results indicate that there are variations in beliefs and preferences among stakeholder
organizations in addition to the differences between and within coalitions.
The level of agreement for this type of incentive-based approach to conserving
forest cover and protecting watershed services was reported in the interviews as being
high in terms of overall goals as well as the basic concepts of Payments for Ecosystem
Services (PES) programs. The survey results also indicated a high level of agreement
around stakeholder beliefs and attitudes in the Nisqually Watershed and the need to spend
money and public funds to conserve watershed services for future generations. The
combination of these results reflects the high level of collaboration and partnerships
among diverse organizations that have been involved in the pilot project and the history
of collaborative watershed management in the Nisqually Watershed.
However, results from the interviews also indicated that regulatory agencies in
Washington State may be reluctant to accept market-based conservation methods if they
believe these programs could undermine their authority or ability to take action on forest
practices or water quality issues. This represents a possible barrier to PES programs in
Washington State. If the current institutional structures and mechanisms are not fully
supportive of incentive-based programs such as this it will be very challenging to get the
programs implemented on a larger regional or statewide scale.
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The combination of the interview responses and survey results also indicated that
the primary areas of potential conflict or differentiated beliefs between coalitions were
related to the preference of regulatory versus market-based approaches to conservation.
Coalition 1, which consisted of the majority of survey respondents (38), shared the
common belief that problems for watershed services need immediate action using the best
available science and a combination of regulations with market-based incentives. On the
other hand, Coalition 2 shared the common belief that regulations are not the preferred
solution and that providing financial incentives to private landowners for conservation
and stewardship practices is a good way to address problems for watershed services.
This divergence in beliefs regarding the preference of regulatory versus marketbased approaches to conservation was explored further through follow-up questions. One
interviewee elaborated on the underlying schools of thought that result in preferences for
certain policy tools. This interviewee highlighted the contrast between stakeholders that
favor more command-and-control (top-down) regulatory methods and ones that favor
more incentive and market-based solutions “that make better use of human nature and
human motivational tendencies” (Craig Partridge). This interviewee also pointed out that
there is another divergence in preferences between the people who are more concerned
about “upstream” outcomes (sellers) of producing the services (forest retention) and those
that are focused on the “downstream” water resource outcomes (buyers) and that are
usually accountable for the provision of those ecosystem services (i.e. drinking water
utilities). This interviewee’s insights on stakeholder dynamics explained that when
combined, those differences between policy tool and outcome preferences can manifest
as skepticism towards PES programs. Specifically, the buyers may be reluctant to invest
111

in ecosystem services because not only do they have regulatory requirements to uphold
but they often have full accountability to their rate payers to justify spending money in
certain ways. Furthermore, it could be very difficult to raise support for a water utility
rate increase or justify new ways of spending public funds. Interview and survey results
indicated that these factors and divergent beliefs and preferences surrounding regulatory
and policy tools may have influenced the outcomes of this pilot project and the lack of a
successful watershed services transaction within the projects timeframe.
An important result of the interviews was the indication that natural resource
managers and key stakeholders in this project believe that upcoming scientific
developments may suggest that forest practices and regulations need to be changed to
better protect watershed services. However, interviewees also believed that action on
environmental issues cannot wait for more scientific justification or for the lengthy
process of adapting regulations. This is where incentive-based methods that strive for
better environmental protection and stewardship are seen to have the potential to be
complimentary to regulatory methods. PES programs have the potential to fill the gap
between new scientific findings and subsequent adaptation of management practices.
Furthermore, the primary challenge to PES programs identified through this case
study of the Nisqually pilot project was predominantly issues with the limitations of
science related to ecosystem service valuation. Two-thirds (8 out of 12) of the
interviewees discussed that scientific information is critical to validate the market-based
methods of PES programs but that it is difficult to value ecosystem services and measure
additional benefits obtained through certain forestry practices. These limitations of
economic valuation have been show in the literature, primarily that there is not enough
112

scientific understanding and data on the cause-effect relationships between ecosystem
functions and the goods and services produced for markets (Chee, 2004; Daily et al.,
2000). These concerns were stressed by the interviewee’s beliefs that it is necessary to
take action now, with the best available science, to conserve forested ecosystems before
environmental degradation increases.
The interview results also indicated an opposition between different stakeholder’s
preferences for the timing of public outreach and broader communication strategies.
Although this topic was not covered in the surveys to determine if potential coalitions
may be forming around these divergent beliefs, it is an important consideration for PES
program development. Communicating PES concepts and benefits to the general public
and decision-makers was considered crucial by two-thirds of the interviewees. However,
the timing of this communication with the broader public was an area of divergence in
beliefs between respondents. Specifically, three interviewees believed that it was too
early to involve the public and that a successful PES pilot project was needed as an
example for an effective communication campaign. On the other hand, four interviewees
believed that more public outreach, awareness, and support were needed in order for the
pilot project to be successful in the first place.
The differences in opinions with regards to the timing of public outreach indicate
different individual preferences as well as possible stakeholder coalitions growing around
these divergent beliefs. The ACF literature suggests that coalitions communicate
information strategically and that in collaborative policy subsystems, scientific
information is most likely to be used instrumentally for policy-oriented learning rather
than politically to prove a point, as in adversarial subsystems (Weible, 2008). However, if
113

there is not a clear story to tell (or in this case a successful watershed services transaction
to point to) coalitions with a strategic objective may be reluctant to use new information
to raise public support primarily because of the uncertainty of how it will be perceived
and utilized. This may explain the reluctance of several stakeholders to communicate
with the public about PES programs and the pilot project before it is completed and
considered successful.
Positive lessons from the pilot project and future directions for these kinds of PES
programs were discussed in the interviews of key stakeholders. Although interviewees
disagreed on the timing of public outreach, they agreed that the next step will need to
include mounting a good communication campaign to raise awareness and support for
future PES programs. The interviewees discussed the need to clearly communicate the
underlying concepts of PES programs to the public and convince decision-makers of the
investment opportunity in natural capital and proactive conservation measures. This
agreement on public outreach being important for the further development of PES
programs indicates that the differences in beliefs surrounding timing of communication
demonstrates individual preferences rather than policy core beliefs around which future
coalitions may form. However, this divergence in preferences for specific actions may
have influenced the outcomes of the pilot project. One-third of the interviewees shared
the belief that the pilot project may have been more successful if there had been more
initial public outreach and support.
As collaborative watershed management and creative conservation mechanisms
such as PES programs continue to evolve in Washington State, coalitions of Nisqually
Watershed stakeholders may form around shared values similar to the ones identified by
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this study. However, there are other factors that influence stakeholder values and the
structure of coalitions that were not discussed in the scope of this study. Coalitions and
the values of stakeholders are also influenced by available resources (i.e. finances) and
political windows of opportunity as well as the coalition’s ability to coordinate over time
(Weible & Sabatier, 2009). The coalitions identified in this study are not necessarily
groups of people that know each other. However, because of the specific subject and
limited geographical scope, it is likely that many of the stakeholders involved in this
study do know each other and have the potential to collaborate effectively over time to
accomplish long-term goals. Nevertheless, this study does not suggest that these specific
individuals (or the organizations they represent) will form coalitions; rather it is
formulated as a means to identify shared values. Understanding the extent of stakeholder
value systems provides watershed managers a method to develop more effective
communication and outreach strategies that are targeted to the values and beliefs of
specific individuals or organizations.

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Chapter 6: Conclusions
This exploratory study reveals that the Nisqually Watershed stakeholder
community is much more complex than one might expect, and that assumptions about
stakeholder beliefs are likely incorrect or inadequate. The amount of diversity that was
found in individual preferences and coalitions with members from a wide variety of
organizations necessitates that watershed mangers not only understand stakeholder
beliefs but also have clear and explicit communication. Understanding potential
coalitions provides a useful tool for watershed managers, enabling them to tailor
communication and outreach strategies to a specific stakeholder audience for increased
efficacy. Watershed managers can use information about the different beliefs and values
of potential coalitions to develop specialized outreach materials. For example, this study
revealed a potential coalition that preferred to maintain and protect all watershed services
equally. A focus on overall watershed protection with this group may be sufficient for
outreach. However, for the potential coalition that favored the protection of water
resources it would be more effective to focus on those specific watershed services for
outreach and communication. Another example is the potential coalition whose members
did not think regulatory methods were the best way to protect watershed services.
Outreach to these individuals and other stakeholders whose values align with this group
would be more effective if it focused on voluntary and incentive-based conservation
methods.
Furthermore, understanding potential coalitions provides watershed managers and
conservation programs with a tool to determine if they are involving the multiplicity of
stakeholders in planning and outreach efforts. If they are simply involving stakeholders
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based on geographical location or organizational affiliation, the diversity of values and
beliefs may not be fully represented. By considering potential coalitions as well as
location and category a more representative group can be reached. Moreover, this method
can be used to form community groups or advisory committees that include all the
potential coalitions and stakeholder belief systems as well as categories by organization
and location. These potential coalitions can be determined using survey and interview
materials similar to the ones in this study. In this way, the range of stakeholder values is
represented and watershed managers may avoid unexpected delays through lengthy
appeals or costly litigation.
Results from this study and the history of cooperative watershed management in
Washington State indicate that the pilot project is operating within a collaborative policy
subsystem that is in the middle stages of forest and watershed conservation efforts. This
is evidenced by the presence of consensus based institutional venues, the NW
Environmental Forum that helped to facilitate learning among stakeholders, and joint-fact
finding endeavors in the pilot project. These combined efforts strove to cultivate
scientific information and learning opportunities to better inform decisions with regards
to PES program development. However, the ACF literature suggests that, once fully
formed, coalitions may become entrenched in their beliefs and opposition to alternative
viewpoints will tend to increase. The unfortunate result of this is scientific information
becomes a strategic weapon to support their arguments rather than leading to policyoriented learning across coalitions (Weible & Sabatier, 2009). In this way, a collaborative
policy subsystem might shift to an adversarial policy subsystem and coherent
environmental policy making could break down in the process of people becoming
117

entrenched in their own beliefs and refusing to see alternative viewpoints. An adversarial
policy subsystem with coalitions that have become entrenched in their opposing beliefs
often results in a “hurting stalemate” (political gridlock that has negative results for
everyone involved) and difficult negotiations must be made to change the status quo
(Lipsky & Ryan, 2011).
Educating stakeholders and utilizing tailored outreach strategies at an early stage
could prevent the formation of entrenched, antagonistic coalitions and avoid the shift to
an adversarial subsystem. Thus, understanding potential coalitions not only provides
managers with a tool to tailor communication to a specific audience, but it also allows for
the opportunity to facilitate communication and learning among stakeholders with
different values before they form entrenched coalitions (evidently this is the case in the
mid-process of the Nisqually Watershed Services transaction efforts). Venues for jointlearning such as the NW Environmental Forum, workshops, the formation of community
advisory groups, and tailored communication and public outreach may be effective
methods to facilitate policy-oriented learning that properly utilizes scientific information,
prevent coalitions from becoming entrenched in their beliefs, and maintain a
collaborative policy subsystem.
The results of this study are consistent with the ongoing efforts to improve
collaborative watershed management in Washington State. This is implemented through
coordinated objectives among natural resource managers, conservation non-profits, nongovernmental organizations, and other stakeholders, as well as the development of
effective communication strategies. It is evident from the results of this study that there
was a high level of collaboration among key stakeholders and organizations, which was
118

identified as being very critical to the pilot project. These highly involved stakeholder
groups also represented a larger group of less involved stakeholders. However, the
findings of this study revealed a lack of broader stakeholder and public outreach. For PES
programs to be successful on a larger scale, local stakeholders and the more general
public should be aware of and support these projects. Especially if the funding source, as
proposed in this pilot project, will be public water utility companies then rate payers must
understand the concepts of PES programs, why it is important to invest in natural capital,
and support using public funds in such a way. Other important lessons from this study
included the need for institutional structures and regulatory agencies to support the
exploration of creative conservation mechanisms, and the advancement and clear
communication of new scientific information to inform environmental policy and
decision-making. Progress on any of these critical factors (communication and outreach,
institutional support, and utilization of scientific information), combined with policyoriented learning across coalitions, has the potential to increase collaboration, influence
change within the policy subsystem, and lead to significant advancements in watershed
management and the development of payments for ecosystem services programs in
Washington State.

119

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Appendix A
Survey Questionnaire
1) It is important to conserve watershed services for future generations

2) It is important to spend money and use public funds to conserve watershed
services

3) The quality of watershed services from the Nisqually watershed is high

4) Pollution is a severe environmental problem for watershed services

5) Increased impervious surfaces (e. g. pavement) is a severe environmental problem
for watershed services

6) Fewer forested areas is a severe environmental problem for watershed services

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7) The accumulation of many individual actions (such as the use of lawn chemicals
or littering) is a major cause of environmental problems for watershed services

8) Land use decisions of private land owners are a major cause of environmental
problems for watershed services

9) Natural resource management practices on public lands are a major cause of
environmental problems for watershed services

10) Natural resource management on private lands (e.g. logging and related erosion
and sediment deposition) are a major cause of environmental problems for
watershed services

11) Farming practices and related nutrient inputs are a major cause of environmental
problems for watershed services

12) Human development (e. g. deforestation and conversion to housing) is a major
cause of environmental problems for watershed services

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13) Stronger enforcement of existing regulations and/or stricter regulations are good
ways to improve the environmental quality of watershed services

14) Increased public land ownership (i.e. government agencies) is a good way to
improve the environmental quality of watershed services

15) Government guidance of land and natural resource use on private property
through land rights and/or zoning is a good way to improve the environmental
quality of watershed services

16) Providing financial incentives to private landowners for sustainable resource
management and stewardship practices is a good way to improve the
environmental quality of watershed services

For the next set of questions please rate what you think is the relative level of
importance of each for the Nisqually Watershed. It is essential to keep in mind that
there are limited resources available and that it may not be possible to protect all these
watershed services equally.

17) It is important to maintain the traditional industry of logging in forested
watersheds

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18) It is important to maintain the traditional industry of fishing in watersheds

19) It is important to maintain the traditional industry of farming in watersheds

20) It is important to maintain the number of places for the public to engage in
recreational activities in watersheds

21) It is important to maintain the quality and quantity of water resources from
watersheds

22) It is important to maintain wildlife habitat and biological diversity in watersheds

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Appendix B
Interview Questions

1) What are the main goals with maintaining and enhancing watershed services?

2) What role did scientific information play in the Nisqually pilot project?

3) What role did institutional mechanisms play in the Nisqually pilot project?

4) What role did stakeholder and public involvement play in the Nisqually pilot
project?

5) Are there other critical factors involved in this project and what role did they
play?

6) Who were the most influential players in the Nisqually pilot project and who
should have been involved that was not?

7) Was there a specific type of stakeholder communication that either did or should
in the future promote positive outcomes for watershed services?

8) Who did you primarily coordinate and exchange information with regarding the
pilot project?

9) How would you describe the level of agreement on the efficacy and desirability of
this kind of approach to achieving positive watershed outcomes? Are there
particular entities that were relatively high or low in their level of support?

10) What were the main challenges and lessons with maintaining and enhancing
watershed services in the Nisqually pilot project?
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Item sets

The Evergreen State College Masters Theses: Environmental Studies

Media

Waters_CMThesis2014.pdf