The Hidden Economic Values of Ecosystem Services Explained

Ecosystem Services: The Benefits of a Grass Patch or a Forested Wilderness

The concept of ecosystem services allows us to perceive nature differently. It highlights the significance of each ecosystem for our survival. Discovering the hidden processes and connections within nature reminds us of how much we take it for granted and the countless ways it is vital to our well-being. It is astonishing to realize the monetary value of the ecosystem services nature provides us! The remarkable aspect is that every person living within an ecosystem can access these valuable services for free—at least until someone finds a way to exploit them for personal gain.

Ecosystem Services: Definitions

The concept of 'ecosystem services' gained prominence in mainstream environmental discussions following the publication of the Millennium Ecosystem Assessment of Earth's Environment by the UN in 2005. This assessment explored how alterations in ecosystems can impact "human well-being." The dialogue around the effects of human-driven ecological destruction thus shifted positively, highlighting the benefits humans can enjoy if we avoid harming the environment. Consequently, the introduction of the ecosystem services concept brought a perspective of prosperity and optimism to our environmental discourse.

The Millennium Ecosystem Assessment defines ecosystem services as follows:

"Regarding the services that an ecosystem provides to support human well-being-

They encompass 1) provisioning services, which include food, water, medicines, energy, clothing materials, housing materials, and more, 2) regulating services like maintaining a climate suitable for human life, managing water levels, bringing rain, pollination, and so forth, 3) cultural services such as spiritual fulfillment, knowledge and wisdom, recreational opportunities, aesthetics, and similar aspects, and 4) supporting services like sustaining the fundamental ecosystem that underpins all other services, for example, maintaining the water cycle and enabling the nutrient cycle.

This overview encapsulates all the benefits we derive from nature, clearly illustrating why we should protect it for our own well-being.

Assigning Economic Values to Ecosystem Services

The idea of ecosystem services aids policymakers and individuals in making informed decisions when altering any ecosystem. The economic values of each ecosystem have been assessed based on the services they offer. A simple example of the importance of evaluating an ecosystem's economic value is when a factory is constructed on agricultural land. The value of the ecosystem services provided by this land might include the value of the crops or vegetables grown there, the land's water retention capacity, the naturally occurring herbs, the oxygen released by the plants into the atmosphere, and so on. Once the total economic value of these services is calculated, it should be compared to the economic value of the jobs created by the factory and the products it manufactures. This comparison will assist policymakers and local residents in determining whether the farmland or the factory will provide greater long-term economic benefits. In reality, no factory can economically match a rich and biodiverse ecosystem when considering long-term and cumulative values. However, calculating economic value allows for comparison. Ideally, policymakers should develop models that preserve the ecosystem—whose value is now clearly established—while also creating jobs and promoting sustainable industrial or agricultural production.

Specific Economic Values of Some Ecosystem Services

Below are some compelling calculations highlighting the significance of each ecosystem to human life, its quality, and sustainability.

1. The global economic value of insect pollination is $133 billion annually.[i]

2. The economic value of forest ecosystem goods and services worldwide was estimated at $4.7 trillion annually in 1997.[ii]

3. The air quality value of a tree in Arizona is estimated at $4.16 per year.[iii]

4. The carbon sequestration value of forests in the US, which involves fixing carbon dioxide into the soil as organic carbon through photosynthesis, is $3.4 billion.[iv]

5. The value of water sourced from national forests in the US is $1.4 billion annually.[v]

6. The value of soil erosion prevention by a single tree in Arizona is $0.18 annually.[vi]

7. The dust control value of a single tree in Arizona is $4.16 annually.[vii]

8. The cooling value per tree in Arizona is $20.75 annually.[viii]

9. The global carbon sequestration value of all forests is $684 billion annually.[ix]

10. The recreation value of national forests in the US was $6.8 billion annually in 1993.[x]

11. The economic value of ecosystem services provided by a 1-hectare paddy field in China ranges from $8,605 to $21,405 per year.[xi]

12. The global value of goods and ecosystem services from wetlands is $14 trillion annually.[xii]

Whenever we harm any ecosystem for monetary gain or 'development,' we should remember the values mentioned above. Once these resources are lost, it will take decades or even centuries of dedicated effort to partially restore this natural wealth.

References

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

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

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

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.

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/