The broad range of peatland values and functions underlines the variety in user groups of peatland systems. There are some people who wish to use peatlands for their production functions, and others who wish to preserve and manage these ecosystems for their regulating and non-material life-support functions. Conflicts may arise between these competing views of protection and production. For example:

• the drainage of peatlands may affect their flood control functions leading to damage of downstream valley farmland, bridges and buildings;
• drainage of peatlands for agriculture may lead to loss of carbon storage and climate change mitigation functions;
• drainage and afforestation of peatlands impacts upon biodiversity and constrains their use for recreation, berry picking and hunting;
• strict nature conservation may impact upon the local socio-economic situation, especially in developing countries.

The multiple functionality of peatlands can lead to trade-offs between different stakeholder groups and consequent conflicts over use options. Conflicts between production versus conservation uses and values often result in "win-lose" situations, with the more influential or powerful stakeholders "winning" and the less powerful "losing". An example of this can be seen in peat extraction that does not take peatland conservation or after-use into account. There can also be "lose-lose" situations in which all stakeholders lose, for example, the Indonesian Mega Rice Project. This project was cancelled in 1998 after drainage of over one million ha of peatlands and without producing any economically viable agricultural crops.

There are a number of reasons why peatlands continue to be lost, converted, or degraded. The individuals who benefit most from the conservation of peatland areas are often local residents, many of whom are not involved in policy development and decision-making processes. Decisions concerning the fate of their wetlands are often made through processes that are unsympathetic to local needs or that lack transparency and accountability.

Many services delivered by peatlands (such as flood mitigation, climate regulation, and groundwater recharge) are not marketed (i.e. do not generate income to local communities) and accrue to society at large at local and global scales. Individuals often do not have incentives to maintain the peatland services for the benefit of wider society. Furthermore, when an action results in the degradation of a service that harms other individuals, market mechanisms do not exist (nor, in many cases, could they exist) to ensure that these individuals are compensated for the damages they suffer.

Decision-makers at many levels are unaware of the existence of peatlands and their special management requirements. They fail to recognise the connection between peatland conditions and the provision of peatland ecosystem services. Decisions are generally not informed by assessments and evaluation of the total economic value of both the marketed and non-marketed services provided by peatlands.

The private benefits of peatland conversion are often exaggerated by subsidies such as those that encourage the drainage of peatlands for agriculture or the large-scale replacement of coastal wetlands by intensive aquaculture or infrastructure, including that for urban, industrial, and tourism development.

In some cases, the benefits of conversion exceed those of maintaining the peatland, such as in prime agricultural areas or on the borders of growing urban areas. As more and more peatlands are lost, however, the relative value of the conservation of the remaining areas increases, and these situations become increasingly rare.

Economic and public health costs associated with damage to peatland ecosystem services can be substantial. Often significant investments are needed to restore or maintain non-marketed peatland ecosystem services. Non-marketed benefits are often high and sometimes more valuable than the marketed benefits.

The multifunctional benefits from the maintenance of peatlands as intact ecosystems may far exceed the economic returns from single sector conversions, such as agriculture, forestry or mining. Despite this, such conversions may continue because of a lack of awareness of the wider economic, social, ecological and environmental benefits. However, this finding would not hold true in all locations. For example, the value of conversion of an ecosystem in areas of prime agricultural land or in urban regions often exceeds the total economic value of the intact ecosystem. (Although even in dense urban areas, the total economic value of maintaining some “green space” can be greater than development of these sites, e.g. the “Green Heart” in the densely populated area in the western Netherlands).

In many areas sustainable peatland conservation and restoration requires an integrated approach with sustainable development and poverty alleviation. Considering the decline in incomes from agriculture, there is a pressing need to enhance alternative income opportunities for rural populations. It is important to ensure that their lands and resources are no longer degraded. Environmentally sound economic development is the basis for sustainable development that creates livelihood options and employment opportunities for current as well as future generations.

Sustainable livelihood strategies to generate income include income from carbon trading, water, biodiversity, green energy and tourism. Profitable land use options, such as, in tropical peatlands, oil palm, could, under certain conditions, be part of a wise use of deforested and degraded areas in order to prevent further unproductive degradation. Another strategy, particularly relevant to countries with no substantial agricultural subsidies, is the development of innovative financial instruments, e.g. bio-rights that involve payments by the global community to local stakeholders for biodiversity conservation services, thus compensating for the opportunity costs of the sustainable use of their natural resources. Bio-rights allow the public value of key biodiversity wetland/peatland areas to be transferred to local stakeholders as a direct economic benefit.

In conclusion, there is more in peat than the eye can see. The relationship between people and peat is one of contradictions, sometimes it is a tense one where people eke out an unsustainable living based on an ever deteriorating peat resource, and sometimes it is symbiotic with both partners in the relationship benefiting. Where people respect the ecosystem services and the eco-hydrological limitations to sustainable development in peatland areas, they can provide an enduring resource base for physical, cultural and spiritual use.