Value of Ecosystem Services
Lecture 1 : Introduction
What do we get from ecosystems? The MEA classifies ES into 4 categories:
Provisioning services Products obtained from Food, wood, medicines,energy,
ecosystems fibers
Regulating services Benefits obtained from Crop pollination, climate
regulation of ecosystem regulation. disease control
processes
Cultural services Nonmaterial benefits obtained Aesthetic, spiritual, personal
form ecosystems growth, fun
Supporting services Services necessary for the Soil formation, nutrient cycling
production of all other ES and primary production
Millennium Ecosystem Assessment 2005
From contradicting views to complementary perspectives
Academic disciplines are often separated by gulfs of mutual incomprehension, but
the deepest and widest may be the one that separates most economists from most
environmentalists. What underlies this is not so much disagreements about facts as
disagreement about how to think (Economist, 2002).
Almost all economists are intellectually committed to the idea that things people want
cab be valued in dollars and cents. Most environmentalists not only disagree with this idea,
they find it morally deplorable. Yet, the fact remains that difficult choices must be made
(Economist, 2002).
Ecology Economy
Charles Darwin Adam Smith
Ecologists need economy: Economists need ecology:
Protection of nature in a more populated world Scarcity of natural resources increases
requires people, funds and choices and thus their economic value
Results of IPBES assessment report on land degradation and restoration
Degradation of the Earth’s land surface through human activities. Costing more than 10% of
annual global gross product in loss of biodiversity and ES.
Main direct drivers of loss in biodiversity, loss of ES, and degradation:
● Expansion of crop and grazing lands
● Unsustainable agricultural and forestry practices
● Climate change
● Urban expansion and infrastructure
● Extractive industry
,Results of IPBES assessment report on biodiversity and ecosystem services - food productivity
● Reduction in productivity due to land degradation: 23% land areas
● A lot of global food crop types rely on animal pollination: >75%
● Annual value of global crop output are at risk due to pollinator loss: US$ 235-577
billion
Estimated financial support (OECD countries, 2015) to agriculture potentially harmful to the
environment: $10 billion.
Results of IPBES assessment report on biodiversity and ecosystem service - Fish and forest
● Fih stocks harvested unsustainable: 33%; maximum sustainable harvest: 60%
● Decrease fish biomass by 2100 in high climate warming scenarios: 25%
● Decrease per decade in seagrass meadows (1970-2000): >10%
● Global forest area compared with estimated pre-industrial level: 68%
In policy - Advice on Eco efficiency by Env. Council 21 Oct. 2009
● Underlines the need to internalize external costs1 to set prices right, recognizing the
cost of inaction and the value of ES
● Invites the commission to continue efforts to improve the understanding of the
economics of ecosystem services and biodiversity and propose adequate economic
instruments and policies that better reflect the true value of such services, inter alia
as a contribution to an ambitious EU position for the 10th Conference of Parties of
the Convention on Biological Diversity in 2010
Problem
⇒ True Value often only becomes clear after what we valued is gone (e.g. hurricane
katrina)
Solution
⇒ Put a monetary value on ecosystems and their services before decisions or
policies are taken
Main topics - objectives
Frameworks
Understanding the context of ecosystem services and analytical frameworks
ES quantification
Understanding how ecosystems provide services and how to map them, and learning
more about the role of biodiversity
ES values and valuation
(Economic) values and (economic) valuation of ecosystem services
Assessment and decision making
Decision making/support tools
1
Internalize external costs: making an alteration in an establishment's private costs or benefits to make them
equal to the company's social costs or benefits.
,Mandatory readings
1. ES in decision making
The Natural Capital Project designs tools, including InVEST (Integrated valuation ES and
tradeoffs), for quantifying ecosystem services produced under different scenarios. The use of
these tools in contrasting settings is opening up important conservation opportunities. The
goals of the project is to help integrate ecosystem services into everyday decision making
around the world. The goal is to align economic forces with conservation, by developing
tools that make incorporating natural capital2 into decisions easy, by demonstrating the
power of these tools in important, contrasting places, and by engaging leaders globally.
This requires turning the valuation of ecosystem services into effective policy and finance
mechanisms. A key challenge remains: relative to other forms of capital, assets embodied in
ecosystems are often poorly understood, rarely monitored, and are undergoing rapid
degradation. Natural capital, and the ecosystem services that flow from it, are usually
undervalued by governments, businesses, and the public.
Two fundamental changes need to occur to give ES weight in decision making:
1. The science of ecosystem services needs to advance rapidly
2. Ecosystem services must be explicitly and systematically integrated into decision
making by individuals, corporations, and governments
A framework showing how ecosystem services can be integrated into decision making. One
could link any two ovals, in any direction; we present the simplest version here.
2
Natural capital are natural assets in their role of providing natural resource inputs and environmental services
for economic production.
, In Hawai‘i :
● Ecological production functions are largely undescribed
● Efforts are made to quantify ES to elucidate the tradeoffs and synergies
● Cultural and educational efforts are also underway, to (re)connect people to the land.
● Services under alternative management options
○ Multiple reforestation projects
● The translation of ecosystem condition and function into ES requires interdisciplinary
and user oriented research, including:
○ collaborating with stakeholders to define services that people care about
○ developing transparent, flexible models of ecological production functions at
scales relevant to decision making
○ testing and refining these models in systems around the world, to derive
general insights
● both monetary and non-monetary metrics are important to decision makers
● In Hawai‘i, government initiatives are helping to bring stakeholders together and
creating opportunities for institutional change
● People value ES differently. The complexity of social change, and the diversity of
values and decisions facing stakeholders in Hawai‘i, highlight the need for a
multi-pronged approach.
○ e.g. For business-minded landowners, developing a suite of financial
incentives linked with different ecosystem service values is of prime
importance. Many landowners will require multiple revenue streams in order
to move toward more conservation-oriented management.
There has been extensive work on how land-management decisions affect ecosystems. For
example, we have learned that the decision to introduce exotic pasture grasses has
dramatically changed fire frequency and intensity across landscapes, and that the
introduction of cattle, nonnative game, and feral ungulates has further transformed native
ecosystems.
The scientific foundation for informing decisions that affect ecosystems could be greatly
enhanced by:
1. collaborating with stakeholders to define scenarios of alternative future uses of land,
water, and other natural resources
2. improving methods for assessing the current condition, and predicting the future
condition, of ecosystems
3. establishing programs for long-term monitoring of biodiversity
Ecosystem service analyses make costs & benefits of alternatives actions to people (easier
to compare in monetary value).
More research is needed to build the credibility of ecosystem service approaches, by:
1. combining biophysical measurements with economic valuation to estimate the
monetary value of ES
2. developing non-monetary methods for valuing human health/security and cultural
services, and incorporating these in tools for valuing ES
Lecture 1 : Introduction
What do we get from ecosystems? The MEA classifies ES into 4 categories:
Provisioning services Products obtained from Food, wood, medicines,energy,
ecosystems fibers
Regulating services Benefits obtained from Crop pollination, climate
regulation of ecosystem regulation. disease control
processes
Cultural services Nonmaterial benefits obtained Aesthetic, spiritual, personal
form ecosystems growth, fun
Supporting services Services necessary for the Soil formation, nutrient cycling
production of all other ES and primary production
Millennium Ecosystem Assessment 2005
From contradicting views to complementary perspectives
Academic disciplines are often separated by gulfs of mutual incomprehension, but
the deepest and widest may be the one that separates most economists from most
environmentalists. What underlies this is not so much disagreements about facts as
disagreement about how to think (Economist, 2002).
Almost all economists are intellectually committed to the idea that things people want
cab be valued in dollars and cents. Most environmentalists not only disagree with this idea,
they find it morally deplorable. Yet, the fact remains that difficult choices must be made
(Economist, 2002).
Ecology Economy
Charles Darwin Adam Smith
Ecologists need economy: Economists need ecology:
Protection of nature in a more populated world Scarcity of natural resources increases
requires people, funds and choices and thus their economic value
Results of IPBES assessment report on land degradation and restoration
Degradation of the Earth’s land surface through human activities. Costing more than 10% of
annual global gross product in loss of biodiversity and ES.
Main direct drivers of loss in biodiversity, loss of ES, and degradation:
● Expansion of crop and grazing lands
● Unsustainable agricultural and forestry practices
● Climate change
● Urban expansion and infrastructure
● Extractive industry
,Results of IPBES assessment report on biodiversity and ecosystem services - food productivity
● Reduction in productivity due to land degradation: 23% land areas
● A lot of global food crop types rely on animal pollination: >75%
● Annual value of global crop output are at risk due to pollinator loss: US$ 235-577
billion
Estimated financial support (OECD countries, 2015) to agriculture potentially harmful to the
environment: $10 billion.
Results of IPBES assessment report on biodiversity and ecosystem service - Fish and forest
● Fih stocks harvested unsustainable: 33%; maximum sustainable harvest: 60%
● Decrease fish biomass by 2100 in high climate warming scenarios: 25%
● Decrease per decade in seagrass meadows (1970-2000): >10%
● Global forest area compared with estimated pre-industrial level: 68%
In policy - Advice on Eco efficiency by Env. Council 21 Oct. 2009
● Underlines the need to internalize external costs1 to set prices right, recognizing the
cost of inaction and the value of ES
● Invites the commission to continue efforts to improve the understanding of the
economics of ecosystem services and biodiversity and propose adequate economic
instruments and policies that better reflect the true value of such services, inter alia
as a contribution to an ambitious EU position for the 10th Conference of Parties of
the Convention on Biological Diversity in 2010
Problem
⇒ True Value often only becomes clear after what we valued is gone (e.g. hurricane
katrina)
Solution
⇒ Put a monetary value on ecosystems and their services before decisions or
policies are taken
Main topics - objectives
Frameworks
Understanding the context of ecosystem services and analytical frameworks
ES quantification
Understanding how ecosystems provide services and how to map them, and learning
more about the role of biodiversity
ES values and valuation
(Economic) values and (economic) valuation of ecosystem services
Assessment and decision making
Decision making/support tools
1
Internalize external costs: making an alteration in an establishment's private costs or benefits to make them
equal to the company's social costs or benefits.
,Mandatory readings
1. ES in decision making
The Natural Capital Project designs tools, including InVEST (Integrated valuation ES and
tradeoffs), for quantifying ecosystem services produced under different scenarios. The use of
these tools in contrasting settings is opening up important conservation opportunities. The
goals of the project is to help integrate ecosystem services into everyday decision making
around the world. The goal is to align economic forces with conservation, by developing
tools that make incorporating natural capital2 into decisions easy, by demonstrating the
power of these tools in important, contrasting places, and by engaging leaders globally.
This requires turning the valuation of ecosystem services into effective policy and finance
mechanisms. A key challenge remains: relative to other forms of capital, assets embodied in
ecosystems are often poorly understood, rarely monitored, and are undergoing rapid
degradation. Natural capital, and the ecosystem services that flow from it, are usually
undervalued by governments, businesses, and the public.
Two fundamental changes need to occur to give ES weight in decision making:
1. The science of ecosystem services needs to advance rapidly
2. Ecosystem services must be explicitly and systematically integrated into decision
making by individuals, corporations, and governments
A framework showing how ecosystem services can be integrated into decision making. One
could link any two ovals, in any direction; we present the simplest version here.
2
Natural capital are natural assets in their role of providing natural resource inputs and environmental services
for economic production.
, In Hawai‘i :
● Ecological production functions are largely undescribed
● Efforts are made to quantify ES to elucidate the tradeoffs and synergies
● Cultural and educational efforts are also underway, to (re)connect people to the land.
● Services under alternative management options
○ Multiple reforestation projects
● The translation of ecosystem condition and function into ES requires interdisciplinary
and user oriented research, including:
○ collaborating with stakeholders to define services that people care about
○ developing transparent, flexible models of ecological production functions at
scales relevant to decision making
○ testing and refining these models in systems around the world, to derive
general insights
● both monetary and non-monetary metrics are important to decision makers
● In Hawai‘i, government initiatives are helping to bring stakeholders together and
creating opportunities for institutional change
● People value ES differently. The complexity of social change, and the diversity of
values and decisions facing stakeholders in Hawai‘i, highlight the need for a
multi-pronged approach.
○ e.g. For business-minded landowners, developing a suite of financial
incentives linked with different ecosystem service values is of prime
importance. Many landowners will require multiple revenue streams in order
to move toward more conservation-oriented management.
There has been extensive work on how land-management decisions affect ecosystems. For
example, we have learned that the decision to introduce exotic pasture grasses has
dramatically changed fire frequency and intensity across landscapes, and that the
introduction of cattle, nonnative game, and feral ungulates has further transformed native
ecosystems.
The scientific foundation for informing decisions that affect ecosystems could be greatly
enhanced by:
1. collaborating with stakeholders to define scenarios of alternative future uses of land,
water, and other natural resources
2. improving methods for assessing the current condition, and predicting the future
condition, of ecosystems
3. establishing programs for long-term monitoring of biodiversity
Ecosystem service analyses make costs & benefits of alternatives actions to people (easier
to compare in monetary value).
More research is needed to build the credibility of ecosystem service approaches, by:
1. combining biophysical measurements with economic valuation to estimate the
monetary value of ES
2. developing non-monetary methods for valuing human health/security and cultural
services, and incorporating these in tools for valuing ES
