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Magazine R1 Essay Ecosystem services Heather Tallis1 and Peter Kareiva2 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 The Indonesian mangrove habitats shown above are relatively low in biodiversity presently gaining global attention (compared to other tropical habitats), yet are among the world’s most valuable ecosystems when one accounts for their storm protection, fisheries production, and as ‘ecosystem services’. Gretchen water supply. In fact mangroves are estimated to provide ecosystem services at a per Daily defines ecosystem services hectare rate ($9,900 per year) nearly five times higher than the per hectare rate for as “the conditions and processes tropical forests, which are noted for their high biodiversity. Thus, at a global scale, through which natural high biodiversity does not necessarily correspond to the greatest ecosystem services ecosystems, and the species that — a reality that may cause conservation efforts to broaden their goals beyond simply make them up, sustain and fulfill maximizing biodiversity. human life”. Until recently, we have tended to take ecosystem importance of ecosystem Millenium Ecosystem Assessment services for granted, as they have processes and other forms of identified functions as generally been ‘free’, despite their capital (physical, social, cultural, provisioning (food, water, fuel, obvious economic value to intellectual). Economic valuation fiber), regulating (prevention of humans. In fact, a recent global need not cover all values of soil erosion, flood control), cultural analysis by the Millenium ecosystems; progress is made (recreation, spiritual value, sense Ecosystem Assessment simply by capturing values that of place) or supporting (soil concluded that well over half of are presently egregiously formation, nutrient cycling, oxygen the world’s ecosystem services overlooked. As a society, the from photosynthesis). are being degraded or used modern world routinely uses Regardless of the ways they can unsustainably. With a global cost–benefit analyses to judge be grouped, ecosystem services population soon to number nine between alternative pathways. have been brought into the billion people, ecosystems The valuation of ecosystem limelight largely due to interest services are becoming so services facilitates difficult from multiple, usually disparate, degraded that many regions in the decisions about how to proceed sectors. Corporations and private world risk ecological collapse. It with development to keep up with land owners have begun to may be time for the era of free ever-expanding human recognize that their resource ecosystem services to come to an populations. Without economic bases are finite and are, in some end. The idea of paying for valuation, decision-makers and cases, factoring ecosystem well- ecosystem services is causing governments implicitly assign being into the corporate or corporations, private land owners, ecosystem processes a value of individual balance-sheet. For conservation organizations and zero and, not surprisingly, then instance, British Petroleum gained governments to take note. Even select actions that reap rewards support from the public, and even prominent business-oriented according to values everyone some conservation organizations, magazines such as The Economist already understands (like a new in their bold move to break from have recently featured ecosystem factory). Hence valuation, even if it the fossil fuels industry by publicly services on their cover (see the 21 is flawed, may get ecosystem recognizing the association April 2005 issue). processes on the table and lead to between fossil fuels and climate If we are to start paying for more sustainable policies. change, and then selecting a ecosystem services, we have to Several attempts have been corporate strategy that reflected know how much to pay. made to classify and exhaustively the role of carbon sequestration Economists and ecologists are list ecosystem services. There is and reduced emissions in climate just beginning to credibly assign no present consensus on a useful control. On a less grand, but economic value to ecosystem taxonomy, though de Groot and equally relevant scale, cattle processes, transforming these coworkers and the Millenium ranchers and foresters may use processes into tradable, Ecosystem Assessment have both ecosystem services as another marketable services. This established groupings that align commodity that can be sold approach gives us a common ecosystem functions with goods beyond beef or timber, as long as currency to assess the relative and services. For example, the they can find someone willing to Current Biology Vol 15 No 17 R2 thinking about nature, differences Box 1 of opinion can be dramatic. For Mangroves: from $2000 shrimp to tsunami protection example, some scientists suggest a virtual one-to-one mapping Mangroves have long been the poster child of Mangroves have also illustrated the between ecosystem services and ecosystem services. The list of the services importance of understanding what ecosystem biodiversity. Others point out that provided by mangroves is long and well characteristics are necessary for particular there are many cases where low appreciated by subsistence communities services. The recent Indian Ocean tsunami diversity systems can provide globally. Many of these services have already provided a textbook example of the role of tremendous ecosystem services, been targets of valuation studies, including mangroves in coastal protection. Most areas and that modest losses of finfish and non-finfish commercial and in Sri Lanka with relatively good mangrove subsistence fisheries, timber and firewood, status before the tsunami were protected and biodiversity may not substantially dyes, tourism, medicinal remedies, education, received little wave damage as expected, but undermine ecosystem services. physical coastal protection, carbon storage, some were severely damaged. In other Many conservationists also fear and even existence and option values. The words, the mangroves acted like an that placing values on ecosystem power of such valuations was shown early insurance policy against storm damage services will lead to the loss of on, when the Fijian government temporarily nature s insurance policy, with no premiums appreciation of species for their stopped mangrove reclamation in the 1960 s charged to anyone. Of course, if all of the own sake. History has shown that and 1970 s after seeing the results of a partial coastal regions bludgeoned by the tsunami markets are generally unkind to valuation study. had recognized the value of mangroves, natural systems. Others see much damage and suffering could have been A later case study showed the economic and markets as tools that can instill ecological perils of neglecting the value of averted. conservation value into lands mangroves. A large mangrove area on India s Interestingly, just as is the case with regular under human use that would east coast houses a shrimp farming industry insurance policies, the details matter. A traditionally not be valued if the that relies on wild brood shrimp. But, closer look at the patterns of damage and the mangroves were cleared for new farms coastal vegetation showed that the damaged only measure were biodiversity. subsidized by the government and the areas had dominant mangrove trees like Possibly the boldest move to remaining mangrove area is half of that Rhizophora sp. in good condition, but had embrace and understand required just to provide enough wild brood understories dominated by less typical ecosystem services to date is the shrimp for existing farms. Overdevelopment mangrove associates (species not always Millennium Ecosystem has led to a wildly fluctuating brood shrimp found in mangroves). This detail of forest Assessment, mentioned above. market where a single shrimp can sell for as character, not visible from satellites, made all This assessment of the status of much as $2000 USD. Analyzing the partial the difference. If mangrove restoration efforts the earth’s ecosystems was value of mangroves for brood shrimp spurred by the recent disaster focus on requested by the United Nations provision alone would have clearly identified expanding the extent of major mangrove the optimal number of farms, saving subsidy species while ignoring understory species, Secretary General, Kofi Annan. As money, providing a sustainable industry and the region could face an equally grave threat stated in the report: “the objective retaining more mangroves. from the next tsunami. of the Millenium Ecosystem Assessment was to assess the consequences of ecosystem change for human well-being and pay for clean watersheds or interested in ecosystem services. to establish the scientific basis for erosion control. Private donor dollars presently actions needed to enhance the Ecosystem services have also pay for most domestic and conservation and sustainable use piqued the interest of the public international conservation of ecosystems and their sector and national governments. activities. Though these funds contributions to human well- For example, several agencies have set aside vast tracts of being”. The assessment cost over within the US government pristine systems, they alone will $20 million and involved 1300 (USEPA, USACE, USDA) recently not be enough to protect the scientists who volunteered their showed their interest in majority of the earth’s ecosystems time synthesizing and analyzing ecosystem services when they and the species they house. In data and models. commissioned the National comparison, realization of the All of this interest is derived Research Council to produce a market worth of ecosystem from a healthy base of theory and report on the topic and the status services has the potential to only a few real-world examples of aquatic ecosystem services in increase conservation funding by that scratch the surface of the US. These government orders of magnitude. Ecosystem possible tools for the sticky agencies recognize the utility of services also have the possibility business of assigning values to ecosystem service valuation for of aligning conservation value and ecosystem functions. The point of its potential to inform policy poverty alleviation. Functioning economic valuation is to estimate decisions that include ecosystems provide clean, the importance of changes in consideration of trade-offs, for disease-free water, fertile soil and ecosystem services to human providing damage assessments numerous other basic human welfare. There is an active and for incorporating needs. movement to formalize ecosystem environmental assets and services The paradigm of ecosystem service values in public and into national income accounts. services is not accepted by private sectors by creating Conservation organizations everyone, and even among those markets for ecosystem services, have several reasons to be who champion this new way of and at a minimum changing Magazine R3 policies away from perverse Fish for personal subsidies. consumption caught by net from a coral reef in The most common and most Indonesia. Although the appropriate approach to non- importance of coral reefs market valuation is called total for fisheries is well-known, economic value (TEV). This unsustainable practices approach does not necessarily such as blast fishing assess the total value of an commonly squander these ecosystem services, and ecosystem, but rather allows leave future generations changes to be calculated for all deprived. In this Indonesian values (use and non-use values) community, blast fishing associated with one or several had been halted, and local ecosystem functions. Any people enjoy a bountiful calculation of TEV will depend harvest of fish. If blast fishing yields too much heavily on the spatial and short-term economic gain temporal scales being assessed, due to exports to Japan or so analysts must be clear about elsewhere, the wisdom of the intended scope of their study. sustainable practices does TEV can be assessed as not so easily triumph. willingness to pay (WTP) or willingness to accept (WTA) payment. WTP is the more service, or some other form of potential may be even riskier as common method, as more tools incentive. Some payment systems species continue to blink out of for estimating economic value are are already established and existence and ecosystems relevant to this approach and functioning for selected continue to collapse around us. WTP can usually be considered a ecosystem services. For example, conservative estimate in cases there are at least five active Further reading where WTA would be preferred. carbon markets in the world, and Costanza, R., d’Arge, R., de Groot, R., Farber, S., Grasso, M., Hannon, B., The recent NRC report reviews farmers in parts of the US are Limburg, K., Naeem, S., O’Neill, the many methods for calculating subsidized to leave fields fallow R.V., Paruelo, J., et al. (1997). The WTP and should be consulted for for several years to encourage soil value of the world’s ecosystem details and guidelines. formation and retention. The services and natural capital. Nature Many problems must be solved Perrier bottled water company 387, 253–259. Daily, G.C. ed. (1997). Nature’s before the valuation of ecosystem pays fees to landowners in Services: Societal Dependence on services can become a watersheds upstream of their Natural Ecosystems (Washington: mainstream activity. Primarily, we springs to retain forests, Island Press). need to acquire sufficient guaranteeing a clean, reliable Millennium Ecosystem Assessment. (2005). Ecosystems and human information about ecosystem water source. But even these well-being:synthesis (Washington: processes to make valuation tools will be difficult to apply in Island Press). possible. Beyond that basic non-capitalist countries or Postel, S., and Thompson, B.H. (2005). biophysical information, we also developing regions with minimal Watershed protection:capturing the benefits of nature’s water supply lack an understanding of how infrastructure. Economists and services. Nat. Resour. Forum 29, economic value scales with multilateral international agencies 98–105. ecosystem processes. For will need to apply creative Valuing Ecosystem Services. (2004). instance, a single wetland grass thinking in impoverished countries Towards better environmental decision making (Washington: plant does not cycle enough to help the value of ecosystem National Academies Press). nutrients to be of value to an services be realized in places www.ecosystemservicesproject.org upland cattle farmer. But how where no one can afford to pay for (CSIRO initiated project studying many plants are considered much of anything. ecosystem services and how to valuable? 100 plants? One hectare Valuation of ecosystem services consider these services in land management decisions) of wetland? And how does this is but one of many tools that will www.ecosystemvaluation.org/(funda- answer change with seasons, be used in the continual struggle mentals of dollar valuation, with climate fluctuations and land use to allow coexistence of humans links to indicators of ecosystem change in the watershed? and the suite of species and value) http://esd.uvm.edu/ (NSF funded Another challenge lies in our ecosystems that make our lives ecosystem services database and ability to devise pragmatic possible. Ecosystem services and search tool) programs for the monetization of their dollar value is one of the few www.actionbioscience.org/environ- services. Hardest of all may be ideas that resonate in corporate ment/esa.html (Ecological Society of America factsheet on ecosystem finding someone willing to pay, and governmental board rooms, services with links) when the tradition has been to on stock exchanges and in farm receive these services for free. houses, mud huts, eco-tourist 1Biology, University of Washington, Ecosystem service valuation will lodges and palm palapas. Seattle, Washington 98195, USA. only achieve its promise if there Investing in ecosystem services is 2The Nature Conservancy, 4722 Latona are markets and buyers for the a risky business. Ignoring their Avenue NE Seattle, Washington 98105, USA.