Ecosystem services
Encyclopedia
Humankind benefits from a multitude of resources and processes that are supplied by natural ecosystems. Collectively, these benefits are known as ecosystem services and include products like clean drinking water
Drinking water
Drinking water or potable water is water pure enough to be consumed or used with low risk of immediate or long term harm. In most developed countries, the water supplied to households, commerce and industry is all of drinking water standard, even though only a very small proportion is actually...

 and processes such as the decomposition
Decomposition
Decomposition is the process by which organic material is broken down into simpler forms of matter. The process is essential for recycling the finite matter that occupies physical space in the biome. Bodies of living organisms begin to decompose shortly after death...

 of wastes. While scientists and environmentalists have discussed ecosystem services for decades, these services were popularized and their definitions formalized by the United Nations 2004 Millennium Ecosystem Assessment
Millennium Ecosystem Assessment
The Millennium Ecosystem Assessment, released in 2005, is an international synthesis by over 1000 of the world's leading biological scientists that analyses the state of the Earth’s ecosystems and provides summaries and guidelines for decision-makers...

 (MEA), a four-year study involving more than 1,300 scientists worldwide. This grouped ecosystem services into four broad categories: provisioning, such as the production of food and water; regulating, such as the control of climate and disease; supporting, such as nutrient cycles and crop pollination; and cultural, such as spiritual and recreational benefits.

As human populations grow, so do the resource demands imposed on ecosystems and the impacts of our global footprint
Ecological footprint
The ecological footprint is a measure of human demand on the Earth's ecosystems. It is a standardized measure of demand for natural capital that may be contrasted with the planet's ecological capacity to regenerate. It represents the amount of biologically productive land and sea area necessary to...

. Natural resources are not invulnerable and infinitely available. The environmental impacts of anthropogenic actions, which are processes or materials derived from human activities, are becoming more apparent – air and water quality are increasingly compromised, oceans are being overfish
Overfishing
Overfishing occurs when fishing activities reduce fish stocks below an acceptable level. This can occur in any body of water from a pond to the oceans....

ed, pests and diseases are extending beyond their historical boundaries, and deforestation
Deforestation
Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a nonforest use. Examples of deforestation include conversion of forestland to farms, ranches, or urban use....

 is exacerbating flooding downstream. It has been reported that approximately 40-50% of Earth’s ice-free land surface has been heavily transformed or degraded by anthropogenic activities, 66% of marine fisheries are either overexploited or at their limit, atmospheric CO2 has increased more than 30% since the advent of industrialization, and nearly 25% of Earth’s bird species have gone extinct in the last two thousand years. Society is increasingly becoming aware that ecosystem services are not only limited, but also that they are threatened by human activities. The need to better consider long-term ecosystem health and its role in enabling human habitation and economic activity is urgent. To help inform decision-makers, many ecosystem services are being assigned economic values, often based on the cost of replacement with anthropogenic alternatives. The ongoing challenge of prescribing economic value to nature, for example through biodiversity banking
Biodiversity banking
Biodiversity banking, also known as biodiversity trading, biodiversity offsets or conservation banking is a process by which biodiversity loss can be reduced by creating a framework which allows biodiversity to be reliably measured, and market based solutions applied to improving biodiversity...

, is prompting transdisciplinary shifts in how we recognize and manage the environment, social responsibility
Social responsibility
Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the...

, business opportunities, and our future as a species.

A brief history

The simple notion of human dependence on Earth’s ecosystems reaches to the start of our species’ existence, when we benefited from the products of nature to nourish our bodies and for shelter from harsh climates. Recognition of how ecosystems could provide more complex services to mankind date back to at least Plato
Plato
Plato , was a Classical Greek philosopher, mathematician, student of Socrates, writer of philosophical dialogues, and founder of the Academy in Athens, the first institution of higher learning in the Western world. Along with his mentor, Socrates, and his student, Aristotle, Plato helped to lay the...

 (c. 400 BC) who understood that deforestation
Deforestation
Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a nonforest use. Examples of deforestation include conversion of forestland to farms, ranches, or urban use....

 could lead to soil erosion
Erosion
Erosion is when materials are removed from the surface and changed into something else. It only works by hydraulic actions and transport of solids in the natural environment, and leads to the deposition of these materials elsewhere...

 and the drying of springs. However, modern ideas of ecosystem services probably began with Marsh in 1864 when he challenged the idea that Earth’s natural resources are unbounded by pointing out changes in soil fertility in the Mediterranean. Unfortunately, his observations and cautions passed largely unnoticed at the time and it was not until the late 1940s that society’s attention was again brought to the matter. During this era, three key authors – Osborn
Henry Fairfield Osborn, Jr
Henry Fairfield Osborn, Jr. , son of the American geologist Henry Fairfield Osborn and cousin of Frederick Osborn, was a conservationist. He was long time president of the New York Zoological Society.-Biography:...

, Vogt, and Leopold – awakened and promoted recognition of human dependence on the environment with the idea of ‘natural capital’. In 1956, Sears drew attention to the critical role of the ecosystem in processing wastes and recycling nutrients. An environmental science textbook called attention to “the most subtle and dangerous threat to man’s existence… the potential destruction, by man’s own activities, of those ecological systems upon which the very existence of the human species depends”. The term ‘environmental services’ was finally introduced in a report of the Study of Critical Environmental Problems, which listed services including insect pollination
Pollination
Pollination is the process by which pollen is transferred in plants, thereby enabling fertilisation and sexual reproduction. Pollen grains transport the male gametes to where the female gamete are contained within the carpel; in gymnosperms the pollen is directly applied to the ovule itself...

, fisheries, climate
Climate
Climate encompasses the statistics of temperature, humidity, atmospheric pressure, wind, rainfall, atmospheric particle count and other meteorological elemental measurements in a given region over long periods...

 regulation and flood
Flood
A flood is an overflow of an expanse of water that submerges land. The EU Floods directive defines a flood as a temporary covering by water of land not normally covered by water...

 control. In following years, variations of the term were used, but eventually ‘ecosystem services’ became the standard in scientific literature.

Modern expansions of the ecosystem services concept include socio-economic and conservation
Conservation ethic
Conservation is an ethic of resource use, allocation, and protection. Its primary focus is upon maintaining the health of the natural world: its, fisheries, habitats, and biological diversity. Secondary focus is on materials conservation and energy conservation, which are seen as important to...

 objectives, which are discussed below. For a more complete history of the concepts and terminology of ecosystem services, see Daily (1997).

Examples

Experts currently recognize four categories of ecosystem services. The following lists represent samples of each:
Provisioning services
• food (including seafood
Seafood
Seafood is any form of marine life regarded as food by humans. Seafoods include fish, molluscs , crustaceans , echinoderms . Edible sea plants, such as some seaweeds and microalgae, are also seafood, and are widely eaten around the world, especially in Asia...

 and game
Game (food)
Game is any animal hunted for food or not normally domesticated. Game animals are also hunted for sport.The type and range of animals hunted for food varies in different parts of the world. This will be influenced by climate, animal diversity, local taste and locally accepted view about what can or...

), crops, wild foods, and spices
• water
• minerals (including diatomite)
pharmaceuticals
Medication
A pharmaceutical drug, also referred to as medicine, medication or medicament, can be loosely defined as any chemical substance intended for use in the medical diagnosis, cure, treatment, or prevention of disease.- Classification :...

, biochemicals, and industrial products
energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...

 (hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...

, biomass fuels
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...

)

Regulating services
• carbon sequestration and climate
Climate
Climate encompasses the statistics of temperature, humidity, atmospheric pressure, wind, rainfall, atmospheric particle count and other meteorological elemental measurements in a given region over long periods...

 regulation
• waste decomposition
Decomposition
Decomposition is the process by which organic material is broken down into simpler forms of matter. The process is essential for recycling the finite matter that occupies physical space in the biome. Bodies of living organisms begin to decompose shortly after death...

 and detoxification
• purification of water
Water purification
Water purification is the process of removing undesirable chemicals, materials, and biological contaminants from contaminated water. The goal is to produce water fit for a specific purpose...

 and air
Air pollution
Air pollution is the introduction of chemicals, particulate matter, or biological materials that cause harm or discomfort to humans or other living organisms, or cause damage to the natural environment or built environment, into the atmosphere....

• crop pollination
Pollination
Pollination is the process by which pollen is transferred in plants, thereby enabling fertilisation and sexual reproduction. Pollen grains transport the male gametes to where the female gamete are contained within the carpel; in gymnosperms the pollen is directly applied to the ovule itself...

• pest and disease
Disease
A disease is an abnormal condition affecting the body of an organism. It is often construed to be a medical condition associated with specific symptoms and signs. It may be caused by external factors, such as infectious disease, or it may be caused by internal dysfunctions, such as autoimmune...

 control

Supporting services
• nutrient dispersal and cycling
• seed dispersal
Biological dispersal
Biological dispersal refers to species movement away from an existing population or away from the parent organism. Through simply moving from one habitat patch to another, the dispersal of an individual has consequences not only for individual fitness, but also for population dynamics, population...

• Primary production

Cultural services
• cultural, intellectual and spiritual inspiration
recreation
Recreation
Recreation is an activity of leisure, leisure being discretionary time. The "need to do something for recreation" is an essential element of human biology and psychology. Recreational activities are often done for enjoyment, amusement, or pleasure and are considered to be "fun"...

al experiences (including ecotourism
Ecotourism
Ecotourism is a form of tourism visiting fragile, pristine, and usually protected areas, intended as a low impact and often small scale alternative to standard commercial tourism...

)
• scientific discovery



Note that, there are various working definitions of ecosystems services in the literature. The most recent revision by TEEB to synthesize work in this field and prevent double counting in ecosystem services audits, has revised the MEA definition to remove "Supporting Services" and replace it with "Habitat Services".



To understand the relationships between humans and natural ecosystems through the services derived from them, consider the following cases:
• In New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

, where the quality of drinking water had fallen below standards required by the U.S. Environmental Protection Agency (EPA)
United States Environmental Protection Agency
The U.S. Environmental Protection Agency is an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress...

, authorities opted to restore the polluted Catskill Watershed that had previously provided the city with the ecosystem service of water purification
Water purification
Water purification is the process of removing undesirable chemicals, materials, and biological contaminants from contaminated water. The goal is to produce water fit for a specific purpose...

. Once the input of sewage and pesticides to the watershed
Drainage basin
A drainage basin is an extent or an area of land where surface water from rain and melting snow or ice converges to a single point, usually the exit of the basin, where the waters join another waterbody, such as a river, lake, reservoir, estuary, wetland, sea, or ocean...

 area was reduced, natural abiotic processes such as soil adsorption
Adsorption
Adsorption is the adhesion of atoms, ions, biomolecules or molecules of gas, liquid, or dissolved solids to a surface. This process creates a film of the adsorbate on the surface of the adsorbent. It differs from absorption, in which a fluid permeates or is dissolved by a liquid or solid...

 and filtration
Filtration
Filtration is commonly the mechanical or physical operation which is used for the separation of solids from fluids by interposing a medium through which only the fluid can pass...

 of chemicals, together with biotic recycling via root systems
Root
In vascular plants, the root is the organ of a plant that typically lies below the surface of the soil. This is not always the case, however, since a root can also be aerial or aerating . Furthermore, a stem normally occurring below ground is not exceptional either...

 and soil
Soil
Soil is a natural body consisting of layers of mineral constituents of variable thicknesses, which differ from the parent materials in their morphological, physical, chemical, and mineralogical characteristics...

 microorganisms, water quality
Water quality
Water quality is the physical, chemical and biological characteristics of water. It is a measure of the condition of water relative to the requirements of one or more biotic species and or to any human need or purpose. It is most frequently used by reference to a set of standards against which...

 improved to levels that met government standards. The cost of this investment in natural capital
Natural capital
Natural capital is the extension of the economic notion of capital to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future...

 was estimated between $1-1.5 billion, which contrasted dramatically with the estimated $6-8 billion cost of constructing a water filtration plant plus the $300 million annual running costs.
Pollination
Pollination
Pollination is the process by which pollen is transferred in plants, thereby enabling fertilisation and sexual reproduction. Pollen grains transport the male gametes to where the female gamete are contained within the carpel; in gymnosperms the pollen is directly applied to the ovule itself...

 of crops by bees is required for 15-30% of U.S. food production; most large-scale farmers import non-native honey bees to provide this service. One study reports that in California’s
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

 agricultural region, it was found that wild bees alone could provide partial or complete pollination
Pollination
Pollination is the process by which pollen is transferred in plants, thereby enabling fertilisation and sexual reproduction. Pollen grains transport the male gametes to where the female gamete are contained within the carpel; in gymnosperms the pollen is directly applied to the ovule itself...

 services or enhance the services provided by honey bees through behavioral interactions. However, intensified agricultural practices
Intensive farming
Intensive farming or intensive agriculture is an agricultural production system characterized by the high inputs of capital, labour, or heavy usage of technologies such as pesticides and chemical fertilizers relative to land area....

 can quickly erode pollination
Pollination
Pollination is the process by which pollen is transferred in plants, thereby enabling fertilisation and sexual reproduction. Pollen grains transport the male gametes to where the female gamete are contained within the carpel; in gymnosperms the pollen is directly applied to the ovule itself...

 services through the loss of species and those remaining are unable to compensate for the difference. The results of this study also indicate that the proportion of chaparral
Chaparral
Chaparral is a shrubland or heathland plant community found primarily in the U.S. state of California and in the northern portion of the Baja California peninsula, Mexico...

 and oak-woodland habitat
California oak woodland
California oak woodland is a plant community found throughout the California chaparral and woodlands ecoregion of California in the United States and northwestern Baja California in Mexico...

 available for wild bees within 1-2 km of a farm
Farm
A farm is an area of land, or, for aquaculture, lake, river or sea, including various structures, devoted primarily to the practice of producing and managing food , fibres and, increasingly, fuel. It is the basic production facility in food production. Farms may be owned and operated by a single...

 can strongly stabilize and enhance the provision of pollination services, thereby providing a potential insurance policy for farmers of this region.
• In watersheds of the Yangtze River
Yangtze River
The Yangtze, Yangzi or Cháng Jiāng is the longest river in Asia, and the third-longest in the world. It flows for from the glaciers on the Tibetan Plateau in Qinghai eastward across southwest, central and eastern China before emptying into the East China Sea at Shanghai. It is also one of the...

 (China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

), spatial models
Spatial analysis
Spatial analysis or spatial statistics includes any of the formal techniques which study entities using their topological, geometric, or geographic properties...

 for water flow through different forest habitats were created to determine potential contributions for hydroelectric power in the region. By quantifying the relative value of ecological parameters (vegetation-soil-slope complexes), researchers were able to estimate the annual economic benefit of maintaining forests in the watershed
Drainage basin
A drainage basin is an extent or an area of land where surface water from rain and melting snow or ice converges to a single point, usually the exit of the basin, where the waters join another waterbody, such as a river, lake, reservoir, estuary, wetland, sea, or ocean...

 for power services to be 2.2 times that if it were harvested once for timber
Timber
Timber may refer to:* Timber, a term common in the United Kingdom and Australia for wood materials * Timber, Oregon, an unincorporated community in the U.S...

.

• In the 1980s, mineral water company Vittel (now a brand of Nestlé Waters) faced a critical problem. Nitrates and pesticides were entering the company’s springs in northeastern France. Local farmers had intensified agricultural practices and cleared native vegetation that previously had filtered water before it seeped into the aquifer used by Vittel. This contamination threatened the company’s right to use the “natural mineral water” label under French law. In response to this business risk, Vittel developed an incentive package for farmers to improve their agricultural practices and consequently reduce water pollution that had affected Vittel's product. For example, Vittel provided subsidies and free technical assistance to farmers in exchange for farmers' agreement to enhance pasture management, reforest catchments, and reduce the use of agrochemicals. This is an example of a Payment for ecosystem services
Payment for ecosystem services
Payments for Ecosystem Services , also known as Payments for Environmental Services broadly defined, is the practice of offering incentives to farmers or landowners in exchange for managing their land to provide some sort of ecological service. These programmes promote the conservation of natural...

 program.

Ecology

Understanding of ecosystem services requires a strong foundation in ecology
Ecology
Ecology is the scientific study of the relations that living organisms have with respect to each other and their natural environment. Variables of interest to ecologists include the composition, distribution, amount , number, and changing states of organisms within and among ecosystems...

, which describes the underlying principles and interactions of organisms and the environment
Natural environment
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....

. Since the scales at which these entities interact can vary from microbes to landscapes, milliseconds to millions of years, one of the greatest remaining challenges is the descriptive characterization of energy and material flow between them. For example, the area of a forest floor, the detritus
Detritus
Detritus is a biological term used to describe dead or waste organic material.Detritus may also refer to:* Detritus , a geological term used to describe the particles of rock produced by weathering...

 upon it, the microorganisms in the soil and characteristics of the soil itself will all contribute to the abilities of that forest for providing ecosystem services like carbon sequestration, water purification, and erosion
Erosion
Erosion is when materials are removed from the surface and changed into something else. It only works by hydraulic actions and transport of solids in the natural environment, and leads to the deposition of these materials elsewhere...

 prevention to other areas within the watershed
Drainage basin
A drainage basin is an extent or an area of land where surface water from rain and melting snow or ice converges to a single point, usually the exit of the basin, where the waters join another waterbody, such as a river, lake, reservoir, estuary, wetland, sea, or ocean...

. Note that it is often possible for multiple services to be bundled together and when benefits of targeted objectives are secured, there may also be ancillary benefits – the same forest may provide habitat
Habitat
* Habitat , a place where a species lives and grows*Human habitat, a place where humans live, work or play** Space habitat, a space station intended as a permanent settlement...

 for other organisms as well as human recreation, which are also ecosystem services.

The complexity of Earth’s ecosystems poses a challenge for scientists as they try to understand how relationships are interwoven among organisms, processes and their surroundings. As it relates to human ecology, a suggested research agenda for the study of ecosystem services includes the following steps:
  1. identification of ecosystem service providers (ESPs) – species
    Species
    In biology, a species is one of the basic units of biological classification and a taxonomic rank. A species is often defined as a group of organisms capable of interbreeding and producing fertile offspring. While in many cases this definition is adequate, more precise or differing measures are...

     or populations that provide specific ecosystem services – and characterization of their functional roles and relationships;
  2. determination of community structure aspects that influence how ESPs function in their natural landscape
    Natural landscape
    A natural landscape is a landscape that is unaffected by human activity. A natural landscape is intact when all living and nonliving elements are free to move and change. The nonliving elements distinguish a natural landscape from a wilderness. A wilderness includes areas within which natural...

    , such as compensatory responses that stabilize function and non-random extinction sequences which can erode it;
  3. assessment of key environmental (abiotic) factors influencing the provision of services;
  4. measurement of the spatial and temporal scales ESPs and their services operate on.


Recently, a technique has been developed to improve and standardize the evaluation of ESP functionality by quantifying the relative importance of different species in terms of their efficiency and abundance. Such parameters provide indications of how species respond to changes in the environment (i.e. predators, resource availability, climate) and are useful for identifying species that are disproportionately important at providing ecosystem services. However, a critical drawback is that the technique does not account for the effects of interactions, which are often both complex and fundamental in maintaining an ecosystem and can involve species that are not readily detected as a priority. Even so, estimating the functional structure of an ecosystem and combining it with information about individual species traits can help us understand the resilience
Resilience (ecology)
In ecology, resilience is the capacity of an ecosystem to respond to a perturbation or disturbance by resisting damage and recovering quickly. Such perturbations and disturbances can include stochastic events such as fires, flooding, windstorms, insect population explosions, and human activities...

 of an ecosystem amidst environmental change.

Many ecologists also believe that the provision of ecosystem services can be stabilized with biodiversity
Biodiversity
Biodiversity is the degree of variation of life forms within a given ecosystem, biome, or an entire planet. Biodiversity is a measure of the health of ecosystems. Biodiversity is in part a function of climate. In terrestrial habitats, tropical regions are typically rich whereas polar regions...

. Increasing biodiversity also benefits the variety of ecosystem services available to society. Understanding the relationship between biodiversity and an ecosystem's stability is essential to the management of natural resources and their services.

The redundancy hypothesis

The concept of ecological redundancy is sometimes referred to as functional compensation and assumes that more than one species performs a given role within an ecosystem. More specifically, it is characterized by a particular species increasing its efficiency at providing a service when conditions are stressed in order to maintain aggregate stability in the ecosystem. However, such increased dependence on a compensating species places additional stress on the ecosystem and often enhances its susceptibility to subsequent disturbance. The redundancy hypothesis can be summarized as "species redundancy enhances ecosystem resilience".

The rivet hypothesis

Another idea uses the analogy of rivets in an airplane wing to compare the exponential effect the loss of each species will have on the function of an ecosystem; this is sometimes referred to as rivet popping. If only one species disappears, the loss of the ecosystem's efficiency as a whole is relatively small; however if several species are lost, the system essentially collapses as an airplane wing would, were it to lose too many rivets. The hypothesis assumes that species are relatively specialized in their roles and that their ability to compensate for one another is less than in the redundancy hypothesis. As a result, the loss of any species is critical to the performance of the ecosystem. The key difference is the rate at which the loss of species affects total ecosystem function.

The portfolio effect

A third explanation, known as the portfolio effect, compares biodiversity to stock holdings, where diversification minimizes the volatility of the investment, or in this case, the risk in stability of ecosystem services. This is related to the idea of response diversity where a suite of species will exhibit differential responses to a given environmental perturbation and therefore when considered together, they create a stabilizing function that preserves the integrity of a service.

Several experiments have tested these hypotheses in both the field and the lab. In ECOTRON, a laboratory in the UK where many of the biotic
Biotic component
Biotic components are the living things that shape an ecosystem. A biotic factor is any living component that affects another organism, including animals that consume the organism in question, and the living food that the organism consumes. Each biotic factor needs energy to do work and food for...

 and abiotic factors of nature can be simulated, studies have focused on the effects of earthworms and symbiotic bacteria
Symbiotic bacteria
Symbiotic bacteria are bacteria living in symbiosis with another organism or each other. For example, Zoamastogopera, found in the stomach of termites, enable them to digest cellulose....

 on plant roots. These laboratory experiments seem to favor the rivet hypothesis. However, a study on grasslands at Cedar Creek Reserve in Minnesota seems to support the redundancy hypothesis, as have many other field studies.

Economics

There are questions regarding the environmental and economic values of ecosystem services. Some people may be unaware of the environment in general and humanity's interrelatedness with the natural environment, which may cause misconceptions. Although environmental awareness is rapidly improving in our contemporary world, ecosystem capital and its flow are still poorly understood, threats continue to impose, and we suffer from the so-called ‘tragedy of the commons
Tragedy of the commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this...

’. Many efforts to inform decision-makers of current versus future costs and benefits now involve organizing and translating scientific knowledge to economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, which articulate the consequences of our choices in comparable units of impact on human well-being. An especially challenging aspect of this process is that interpreting ecological information collected from one spatial-temporal scale does not necessarily mean it can be applied at another; understanding the dynamics of ecological processes relative to ecosystem services is essential in aiding economic decisions. Weighting factors such as a service’s irreplaceability or bundled services can also allocate economic value such that goal attainment becomes more efficient.

The economic valuation of ecosystem services also involves social communication and information, areas that remain particularly challenging and are the focus of many researchers. In general, the idea is that although individuals make decisions for any variety of reasons, trends reveal the aggregative preferences of a society, from which the economic value of services can be inferred and assigned. The six major methods for valuing ecosystem services in monetary terms are:

Avoided cost: Services allow society to avoid costs that would have been incurred in the absence of those services (e.g. waste treatment by wetland
Wetland
A wetland is an area of land whose soil is saturated with water either permanently or seasonally. Wetlands are categorised by their characteristic vegetation, which is adapted to these unique soil conditions....

 habitats avoids health costs)
Replacement cost: Services could be replaced with man-made systems (e.g. restoration
Restoration ecology
-Definition:Restoration ecology is the scientific study and practice of renewing and restoring degraded, damaged, or destroyed ecosystems and habitats in the environment by active human intervention and action, within a short time frame...

 of the Catskill Watershed cost less than the construction of a water purification
Water purification
Water purification is the process of removing undesirable chemicals, materials, and biological contaminants from contaminated water. The goal is to produce water fit for a specific purpose...

 plant)
Factor income: Services provide for the enhancement of incomes (e.g. improved water quality
Water quality
Water quality is the physical, chemical and biological characteristics of water. It is a measure of the condition of water relative to the requirements of one or more biotic species and or to any human need or purpose. It is most frequently used by reference to a set of standards against which...

 increases the commercial take of a fishery
Fishery
Generally, a fishery is an entity engaged in raising or harvesting fish which is determined by some authority to be a fishery. According to the FAO, a fishery is typically defined in terms of the "people involved, species or type of fish, area of water or seabed, method of fishing, class of boats,...

 and improves the income of fishers)
Travel cost: Service demand may require travel, whose costs can reflect the implied value of the service (e.g. value of ecotourism
Ecotourism
Ecotourism is a form of tourism visiting fragile, pristine, and usually protected areas, intended as a low impact and often small scale alternative to standard commercial tourism...

 experience is at least what a visitor is willing to pay to get there)
Hedonic pricing: Service demand may be reflected in the prices people will pay for associated goods (e.g. coastal housing prices exceed that of inland homes)
Contingent valuation: Service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives (e.g. visitors willing to pay for increased access to national parks)

Management and policy

Although monetary pricing continues with respect to the valuation of ecosystem services, the challenges in policy implementation and management are significant and multitudinous. The administration of common pool resources is a subject of extensive academic pursuit. From defining the problems to finding solutions that can be applied in practical and sustainable ways, there is much to overcome. Considering options must balance present and future human needs, and decision-makers must frequently work from valid but incomplete information. Existing legal policies are often considered insufficient since they typically pertain to human health-based standards that are mismatched with necessary means to protect ecosystem health and services. To improve the information available, one suggestion has involved the implementation of an Ecosystem Services Framework (ESF), which integrates the biophysical and socio-economic dimensions of protecting the environment and is designed to guide institutions through multidisciplinary information and jargon, helping to direct strategic choices.

Novel and expedient methods are needed to deal with managing Earth’s ecosystem services. Local to regional collective management efforts might be considered appropriate for services like crop pollination
Pollination
Pollination is the process by which pollen is transferred in plants, thereby enabling fertilisation and sexual reproduction. Pollen grains transport the male gametes to where the female gamete are contained within the carpel; in gymnosperms the pollen is directly applied to the ovule itself...

 or resources like water. Another approach that has become increasingly popular over the last decade is the marketing of ecosystem services protection. Payment and trading of services is an emerging worldwide small-scale solution where one can acquire credits for activities such as sponsoring the protection of carbon sequestration sources or the restoration
Restoration ecology
-Definition:Restoration ecology is the scientific study and practice of renewing and restoring degraded, damaged, or destroyed ecosystems and habitats in the environment by active human intervention and action, within a short time frame...

 of ecosystem service providers. In some cases, banks for handling such credits have been established and conservation companies have even gone public on stock exchanges, defining an evermore parallel link with economic endeavors and opportunities for tying into social perceptions. However, crucial for implementation are clearly defined land rights
Land rights
Land law is the form of law that deals with the rights to use, alienate, or exclude others from land. In many jurisdictions, these species of property are referred to as real estate or real property, as distinct from personal property. Land use agreements, including renting, are an important...

, which is often lacking in many developing countries. In particular, many forest-rich developing countries suffering deforestation
Deforestation
Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a nonforest use. Examples of deforestation include conversion of forestland to farms, ranches, or urban use....

 experience conflict between different forest stakeholders. In addition, concerns for such global transactions include inconsistent compensation for services or resources sacrificed elsewhere and misconceived warrants for irresponsible use. Another approach has been focused on protecting ecosystem service ‘hotspots
Biodiversity hotspot
A biodiversity hotspot is a biogeographic region with a significant reservoir of biodiversity that is under threat from humans.The concept of biodiversity hotspots was originated by Norman Myers in two articles in “The Environmentalist” , revised after thorough analysis by Myers and others in...

’. Recognition that the conservation of many ecosystem services aligns with more traditional conservation goals (i.e. biodiversity
Biodiversity
Biodiversity is the degree of variation of life forms within a given ecosystem, biome, or an entire planet. Biodiversity is a measure of the health of ecosystems. Biodiversity is in part a function of climate. In terrestrial habitats, tropical regions are typically rich whereas polar regions...

) has led to the suggested merging of objectives for maximizing their mutual success. This may be particularly strategic when employing networks that permit the flow of services across landscapes, and might also facilitate securing the financial means to protect services through a diversification of investors.

Ecosystem services and business

Ecosystem services degradation can pose a number of risks to corporate performance as well as provide business opportunities through ecosystem restoration and enhancement. Risks and opportunities include:
Operational
Risks such as higher costs for freshwater due to scarcity or lower output for hydroelectric facilities due to siltation
Opportunities such as increasing water-use efficiency or building an on-site wetland to circumvent the need for new water treatment infrastructure

Regulatory and legal
Risks such as new fines, government regulations, or lawsuits from local communities that lose ecosystem services due to corporate activities
Opportunities such as engaging governments to develop policies and incentives to protect or restore ecosystems that provide services a company needs

Reputational
Risks such as retail companies being targeted by nongovernmental organization campaigns for purchasing wood or paper from sensitive forests
Opportunities such as implementing and communicating sustainable purchasing, operating, or investment practices in order to differentiate corporate brands

Market and product
Risks such as customers switching to other suppliers that offer products with lower ecosystem impacts or governments implementing new sustainable procurement policies
Opportunities such as launching new products and services that reduce customer impacts on ecosystems or participating in emerging markets for carbon sequestration and watershed protection other products

Financing
Risks such as banks implementing more rigorous lending requirements for corporate loans
Opportunities such as banks offering more favorable loan terms or investors taking positions in companies supplying products and services that improve resource use efficiency or restore degraded ecosystems


Many companies are not fully aware of the extent of their dependence and impact on ecosystems and the possible ramifications. Likewise, environmental management systems and environmental due diligence tools are more suited to handle “traditional” issues of pollution and natural resource consumption. Most focus on environmental impacts, not dependence. Several newly developed tools and methodologies can help the private sector value and assess ecosystem services. These include the Corporate Ecosystem Services Review (ESR), Artificial Intelligence for Ecosystem Services (ARIES), and the Natural Value Initiative (NVI).

See also

  • Deep ecology
    Deep ecology
    Deep ecology is a contemporary ecological philosophy that recognizes an inherent worth of all living beings, regardless of their instrumental utility to human needs. The philosophy emphasizes the interdependence of organisms within ecosystems and that of ecosystems with each other within the...

  • Diversity-function debate
    Diversity-function debate
    -Definitions:Species diversity: the total number of species in an area; also, the proportional distribution of species in a given area.Functional diversity: the number of functional roles represented in an ecosystem.-Issues in Ecology:...

  • Earth Economics
    Earth Economics
    Earth Economics, a 501c3 non-profit headquartered in Tacoma, Washington, United States, is dedicated to researching and applying the economic solutions of tomorrow today. Earth Economics provides robust, science-based, ecologically-sound, economic analysis, policy and tools to governments,...

  • Ecological economics
    Ecological economics
    Image:Sustainable development.svg|right|The three pillars of sustainability. Clickable.|275px|thumbpoly 138 194 148 219 164 240 182 257 219 277 263 291 261 311 264 331 272 351 283 366 300 383 316 394 287 408 261 417 224 424 182 426 154 423 119 415 87 403 58 385 40 368 24 347 17 328 13 309 16 286 26...

  • Ecological goods and services
    Ecological goods and services
    Ecological goods and services are the benefits arising from the ecological functions of healthy ecosystems. Such benefits accrue to all living organisms, including animals and plants, rather than to humans alone...

  • Environmental ethics
    Environmental ethics
    Environmental ethics is the part of environmental philosophy which considers extending the traditional boundaries of ethics from solely including humans to including the non-human world...

  • Environmental finance
    Environmental finance
    Environmental Finance is the use of various financial instruments to protect the environment. The field is part of both environmental economics and the conservation movement....

  • Existence value
    Existence value
    Existence values are an unusual and somewhat controversial class of economic value, reflecting the benefit people receive from knowing that a particular environmental resource, such as Antarctica, the Grand Canyon, endangered species, or any other organism or thing exists.Existence value is a...

  • Forest farming
    Forest farming
    Forest farming is an agroforestry practice characterized by the four "I's"- Intentional, Integrated, Intensive and Interactive management of an existing forested ecosystem wherein forest health is of paramount concern. It is neither forestry nor farming in the traditional sense.Forest farming, or...

  • Non-timber forest products
    Non-timber forest products
    Non-timber forest products are considered as any commodity obtained from the forest that does not necessitate harvesting trees. It includes game animals, fur-bearers, nuts and seeds, berries,...

  • Spaceship Earth
    Spaceship Earth
    Spaceship Earth is a world view term usually expressing concern over the use of limited resources available on Earth and the behavior of everyone on it to act as a harmonious crew working toward the greater good....


External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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