Ecosystem services

Humans have always depended on nature for environmental assets like clean water, nutrient cycling and soil formation. These have been called by different names through human history, but are presently gaining global attention as 'ecosystem services'. Gretchen Daily defines ecosystem services as " the conditions and processes through which natural ecosystems, and the species that make them up, sustain and fulfill human life ". Until recently, we have tended to take ecosystem services for granted, as they have generally been 'free', despite their obvious economic value to humans. In fact, a recent global analysis by the Millenium Ecosystem Assessment concluded that well over half of the world's ecosystem services are being degraded or used unsustainably. With a global population soon to number nine billion people, ecosystems services are becoming so degraded that many regions in the world risk ecological collapse. It may be time for the era of free ecosystem services to come to an end. The idea of paying for ecosystem services is causing corporations, private land owners, conservation organizations and governments to take note. Even prominent business-oriented magazines such as The Economist have recently featured ecosystem services on their cover (see the 21 April 2005 issue). If we are to start paying for ecosystem services, we have to know how much to pay. Economists and ecologists are just beginning to credibly assign economic value to ecosystem processes, transforming these processes into tradable, marketable services. This approach gives us a common currency to assess the relative importance of ecosystem processes and other forms of capital (physical, social, cultural, intellectual). Economic valuation need not cover all values of ecosystems; progress is made simply by capturing values that are presently egregiously overlooked. As a society, the modern world routinely uses cost–benefit analyses to judge between alternative pathways. The valuation of ecosystem services facilitates difficult decisions about how to proceed with development to keep up with ever-expanding human populations. Without economic valuation, decision-makers and governments implicitly assign ecosystem processes a value of zero and, not surprisingly, then select actions that reap rewards according to values everyone already understands (like a new factory). Hence valuation, even if it is flawed, may get ecosystem processes on the table and lead to more sustainable policies. Several attempts have been made to classify and exhaustively list ecosystem services. There is no present consensus on a useful taxonomy, though de Groot and coworkers and the Millenium Ecosystem …