Payments for ecosystem services was ranked fifth in the Opportunities for Business report of opportunities for UK business to value and protect nature's services.

Payments for ecosystem services is where the beneficiaries of services provided by nature (called ecosystem services), provide payment to the stewards of the land that provides the services.

The report states that there is a business opportunity from 'layered payments for ecoystem services' - that is, selling different environmental services from the same area of land, to different buyers. Different services (such as fresh water, water quality, flood management, pollination etc) could be bought by different public and private users.

On a small scale this would involve community groups, local business, the local authority and others, purchasing the services they are interested in from a local source, for example a local river.

Layered payments for ecosystem services schemes offers the potential to deliver sustained ecosystem servivces to a wide range of business sectors, building on and complementing public funding.

On a larger scale, it could involve reforming current land-management grant schemes (for exampe Environmental stewardship, England woodland grant scheme) to improve effectiveness.

In his paper to the Ecosystem Markets Task Force, Ian Bateman says 'I think that payments for ecosystem services approaches have lots of potential.

In the agricultural context, incentives have long been used in the UK to influence production but more recently there has been a shift in Common Agricultural Policy funds away from traditional pro-production measures, towards incentives for pro-environmental approaches to farming.

Examples include payments for ecosystem services schemes intended to promote the conservation of biodiversity in agricultural landscapes. There exists considerable potential to build upon and expand these initiatives and the UK needs to move fast here.

By moving away from flat rate payments towards a contracting approach, in which potential providers (farmers and land managers) bid for funding through contracts awarded to those that offer the best combination of output and price, greater efficiency can be achieved.

All businesses are used to such concepts in their everyday operations so I think this has a good chance of high delivery. It also ensures that the tax payer gets best value for money. These new approaches would also help to improve spatial targeting and deliver a broader range of public benefits by building in an ecosystem services approach into agri-environment schemes. '

Defra are currently calling for pilot projects on payments for ecosystem services schemes in England, deadline to apply is 13 August 2012 at 16.00 hrs.