While we are all familiar with the traditional agricultural commodities produced from working rural landscapes, fewer of us recognize the diversity and significance of the ecosystem services produced from the same areas. Ecosystem services are the goods and services derived from natural and managed ecosystems upon which human welfare depends. They include among others pollution control and detoxification, pollination, flood mitigation and prevention, carbon sequestration, water filtration and retention, and biodiversity; their value has been estimated in the trillions of dollars. However, they present significant public policy challenges; challenges explored in these articles.

Agriculture as a managed ecosystem has great potential to generate a broad mix of ecosystem services, going beyond food, fiber and fuel. Better understanding is needed of how ecosystem services can be produced, measured and valued in order to design policy incentives for greater supply.

Farms have all the incentive to optimize production of food, fiber, and energy commodities, but little incentive to provide flows of ecosystem services that benefit other lands. The question is whether a renewed focus on agricultural multifunctionality using ecosystem services as its fulcrum can lead to new ideas about how to strike a more socially optimal balance for agricultural production. This essay outlines the factors that must be considered as that conversation unfolds.

Awareness of the broad array of ecosystem services from rangelands has grown in recent years. Rangelands are primarily viewed as contributing to human welfare through primary production and provisioning services; however, these lands also provide regulating and cultural services. Rigorous economic analysis of nonprovisioning rangeland ecosystem services remains elusive.

Nature provides a range of goods and services of value to people. But ecosystem services may not be provided optimally both because of lack of information and because of public goods problems. The research agenda for economists on ecosystem services builds on long-standing research objectives in agricultural, resource and environmental economics. The economic research agenda on ecosystem services includes working closely with natural scientists to understand ecological production function that determine the provision of ecosystem services, applying valuation techniques to generate estimates of the value of ecosystem services, and designing policies to internalize externalities and provide correct incentives for the provision of ecosystem services.

If ecosystem services are of economic value, then society might use the link between ecosystem services and quality of life to integrate these services into the decisions of businesses and individuals. We consider weaknesses of regulatory and philanthropic approaches and suggest experimental markets for public goods to capture consumer values.