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Ecosystem Services and Economic Values

Updated on October 28, 2018
Deepa damodaran profile image

Deepa is a freelance researcher and journalist. She has worked in various print and television media.

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What Things a Patch of Grass or a Wilderness of Woods Does for Us

The idea of ecosystem services enables us to view nature with a new eye. It tells us how important each ecosystem is for our own survival. Thus, it unravels the hidden processes and connections of nature that we take for granted but are essential for our well-being. One will be wonder struck to know how pricey (if calculated in terms of money) the ecosystem services that nature offers us are! And the beauty of it lies in that every human being living in an ecosystem can equally avail these high value services at no cost- of course until someone finds a selfish way to monetize them.

Definitions

The notion of ‘ecosystem services’ made an entry into the mainstream environmental discourses after the Millennium Ecosystem Assessment of earth’s environment assessing how changes in the ecosystems can affect “human well-being”, was published by the UN in 2005.[i] The discussion on the consequences of human-induced ecological destruction thus made a positive turn towards a discussion on the quantum of benefits that humans can have if we do not cause environmental destruction.

The definition of ecosystem services as delineated by the Millennium Ecosystem Assessment is,

in terms of the services that an ecosystem provides to support human wellbeing-

they are 1) provisioning services that include food, water, medicines, energy, clothing materials, housing materials and so on, 2) regulating services such as keeping the climate conducive for human life, keeping water levels at bay, bringing rain, pollination and so on, 3) cultural services like spiritual happiness, knowledge and wisdom, recreational facilities, aesthetics and things like that and 4) supporting services such as maintenance of the basic ecosystem that supports all other services. Eg:- maintaining water cycle, enabling nutrient cycle etc.[ii]


[i] Millennium Ecosystem Assessment, Retrieved from https://www.millenniumassessment.org/en/index.html

[ii] Millennium Ecosystem Assessment, Retrieved from https://www.greenfacts.org/glossary/def/ecosystem-services.htm

Assigning Economic Values to the Ecosystem Services

For policy makers and also individuals to make informed decisions when they effect changes to any ecosystem, economic values have been calculated for each ecosystem in terms of the ecosystem services it provides. A small example of the usefulness of calculating the economic value of ecosystem services can be when a factory is built on an agrarian land. The value of the ecosystem services that this particular land provides may include the values of the food grains or vegetables produced there, the water holding capacity of the land, the herbs that naturally grow there, the oxygen given out by the plants into the atmosphere etc. The cumulative economic value of all these services once calculated can be compared to the economic value of the jobs created by the factory and the products manufactured there. This will help the policy makers as well as the people living in the region to decide if it is the farm land or the factory that will ‘economically’ benefit them in long term. (For that matter, no factory is going to be economically even a fraction at par with an ecosystem when one measures the values long term and cumulatively).

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Economic Values of Some Ecosystem Services

Here are some interesting calculations that reflect how important each ecosystem is to human life, its quality and sustenance.

  1. Economic value of insect pollination, across the world- $ 133 billion annually.[i]
  2. Economic value of forest ecosystem goods and services of the world- $4.7 trillion annually as estimated in 1997.[ii]
  3. Air quality value of a tree in Arizona has been estimated as $4.16 per year.[iii]
  4. Carbon sequestration value (quantity of carbon dioxide fixed into the soil as organic carbon through photosynthesis) of forests in the US- $3.4 billion.[iv]
  5. Value of water availed from national forests of the US- $1.4 billion annually.[v]
  6. Value of prevention of soil erosion by a single tree in Arizona- $0.18 annually.[vi]
  7. Dust control value of a single tree in Arizona- $4.16 annually.[vii]
  8. Cooling value per tree in Arizona- $20.75 annually.[viii]
  9. Carbon sequestration value of all forests globally- $684 billion annually.[ix]
  10. Recreation value of the national forests in the US- $6.8 billion in 1993 annually.[x]
  11. Economic value of ecosystem services provided by 1-hectare paddy field in China- $8,605 to $21,405 per year.[xi]
  12. Value of goods and ecosystem services we get from wetlands, globally-$14 trillion annually.[xii]

When we cause destruction to any ecosystem in the name of monetary profit or ‘development’, let us remember the values cited above. Once lost, it will take decades and even centuries of concerted effort at least to partially regain this wealth that nature offers us.


[i] What are ecosystem services?, Retrieved from https://wle.cgiar.org/content/what-are-ecosystem-services

[ii] Costanza et al., (1997), The value of the world’s ecosystem services and natural capital, Nature, 387, pp.253-60.

[iii] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[iv] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[v] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[vi] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[vii] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[viii] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[ix] Costanza et al., (1997), The value of the world’s ecosystem services and natural capital, Nature, 387, pp.253-60.

[x] Krieger, D.J. (n.d.), Economic value of forest ecosystem services: a review, The Wilderness Society, Retrieved from https://www.sierraforestlegacy.org/Resources/Conservation/FireForestEcology/ForestEconomics/EcosystemServices.pdf

[xi] Yu et al., (2011), Evaluation of ecosystem services provided by 10 typical rice paddies in China, Journal of Resources and Ecology, 2(4), pp.328-337.

[xii] Baral et al., (2016), A total economic evaluation of wetland ecosystem services: an evidence from Jagdishpur Ramsar Site, Nepal, The Scientific World Journal, Volume 2016, Retrieved from https://www.hindawi.com/journals/tswj/2016/2605609/

© 2018 Deepa

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