Ecosystem Services for Economic Analysis : Conceptual Issues
Dr Pushpam Kumar Institute for Sustainable Water, Integrated
Management and Ecosystems Research ( SWIMMER),
University of Liverpool, [email protected]
What are Ecosystem Services?
Answer depends on the purpose!
If the purpose is mass awareness and education, MA’s classification and purpose are most relevant .
If the purpose is valuation, accounting, executing PES Scheme etc, then a different approach would be needed
Ecosystem Services
•Regulating•Benefits obtained from regulation of
ecosystem processes
CulturalNon-material benefits from ecosystems
ProvisioningGoods produced or
provided by ecosystems
Photo credits (left to right, top to bottom): Purdue University, WomenAid.org, LSUP, NASA, unknown, CEH Wallingford, unknown, W. Reid, Staffan Widstrand
fodder production tourist attraction
pollination
carbon sequestrationflood protection
water purification
slope stability
Beauty
recreation
Biodiversity
fibre production
food production
stabilising micro-climate
recreation
shelter for life stockgame reserve
Established Fact-Ecosystem Services are like any other Capital Assets!
Economics of Ecosystem Services
Ecosystem Services• Benefits people obtain from
ecosystems
Conceptual Lenses of Economics
Stock Vs Flow Metrics of ES- Stocks
(ecological) and flow (ecosystem services)
ES are flow on DD and SS side and imbalance would affect the stock!
Contd..
Ecosystem Services• Timber, water, fodder
Lenses of Economics
The equivalent economic value of a stock that underlies a flow can be estimated from the present and assumed time course of ecosystem services flows by applying appropriate discount rate (natural capital)
Contd
Ecosystem Services• Charachteristics
Lenses of Economics• ES can have consumptive vs
productive
• ES can have private good or
public good features
Fiber
Food
Freshwater
Genetic Resources
Aesthetic
Insurance Value
Spiritual & religious
Recreation & tourism
Economic Value ($)
Economic Valuation
Difficult or impossible
Easy
Private Benefit Capture
Difficult
Easy
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Many BENEFITS of ES are public goods (Rivalness and Excludability, Spatial and Temporal Dynamics
Joint Production, Complexity, Resilience and Interdependence of the Benefit )
Contd.
Ecosystem Services Lenses of Economics• vector of services produced
by a vector of inputs
• intermediate / final goods
• externalities over space and time (soil erosion and flooding)
Evapotranspiration(E)
Wetland Area (e.g. Floodplain)
Soil Moisture(SM)
Outputs(O)Inputs(I)
The semantics of ‘intermediate / final’ good differs for ecologist and economist !
I=O+ESM
Water Recharge Function in a wetland as ‘Outputs’
Structure of typical SAM
Activity Commodity Factor Agent Accumulation Trade TOTAL
A N ES? A N ES ? K L Z OEA
Activity
A X X X
N X X X
ES ? ? ? X
Commodity
A X X X X
N X X X X X
ES ? ? ? ? ? X
Factor
K X X ? X
L X X ? X
Z X ? X
OEA ? X
Agent
HH X X X ? X
Accumulation X X
Trade X X ? X
TOTAL X X X X X X X X X ? X X X
Ecosystem Accounting: Basic Structure
Resilience and Thresholds of Ecosystems: Possible Approach of
Valuation
The biggest perturbation, the ecosystem can absorb without being in another state is RESILIENCE
the system Resilience in several contexts may be treated as CAPITAL stock
Estimate the accounting price (Maler, 2008)
Accounting price here is changes in the expected change in net present value of expected future ecosystem services resulting from a marginal change in the resilience
Ecosystem Services require Indicators
• Indicators about the physical extent, condition and productivity of resources (e.g. size of fish stocks, soil organic matter levels, etc)
• rate of resource degradation (e.g. rate of forest land conversion)
• level of vulnerability to natural disasters
Variables should not be automatically used as Indicators!!
Valuation of Ecosystem Services
Agreements already on
• Joint effort (ecology and economics)
• Need to know initial condition of Ecosystems
• Need to know the flow of ES (ecological production function) etc. etc.But
Valuation must have a Purpose (resolving trade off, sectoral accounting, CBA, etc.)
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