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Ecosystem Goods and Services: Series Introduction

egs1.jpg (A collaborative series by David Zaks, Chad Monfreda, and Hassan Masum.)

Today, we measure our economic assets in great detail...but we don't systematically measure the ecosystem services upon which our economy (and ultimately all human activity) depends. This post is the first in a series that will look at what it would take to move to a world that recognizes that the way we manage ecosystem services should be as fundamental to the economy as central banking is today.

Why is this important? Because what gets measured also gets managed and valued. We can talk about the value of forests and a clean atmosphere in general terms, and even spend the time and effort to change a few peoples' behavior. But only when such assets are measured and accounted for will the global economy's "default system behavior" have the feedback mechanisms needed to minimize use of and damage to natural resources.

At the same time, we won't be uncritically enthusiastic. There's some real momentum gathering behind these ideas, so it's important not only that they be carried out, but that they be carried out well.

Over the coming months, we plan to look at ecosystem services from several points of view:

Biophysical: what goods and services does the Earth, functioning as a system, provide to societal development and maintenance?

Economic: how are ecosystem services translated to monetary values?

Ethics and well-being: money is a means to an end; what more can we learn by considering measures of human well-being, along with culture and ethics?

Communicating: how can these ideas be made simple and compelling?

Policymakers and Investors: what tools and practices would be required to bring ecosystem services into everyday governmental and financial decision-making? what experiments are already on the ground?

Our goal is to look at the entire pipeline from basic science to valuation to implementation in the real world, summarize the best thinking in each area, and suggest key issues and initiatives.

During the course of our research, reading, and conversations, many questions have come up. Here's a sample of open issues that we hope to tackle:

  • There have been a number of attempts to put a monetary value on global ecosystem services, ranging from $250 billion for boreal forest services to the now-famous $33 trillion global ecoservice valuation by Costanza et al. Given the magnitude of these figures in comparison to global GDP, and that what a dollar can buy or motivate itself changes over time, what meaning do such figures have? Are there alternate valuation metrics that would be more meaningful?
  • Future wealth is usually discounted to the present day, so that a given financial or natural resource 50 years from now counts for far less in today's decision-making. Does this really make sense? If not, what alternate frameworks allow reasonable planning?
  • When we talk about costs and benefits, how are they spatially and temporally distributed? Who are the winners and losers?
  • Money doesn't translate directly into human well-being or happiness - $1000 for a subsistence farmer goes much further than the same amount for a well-off professional. Should "value" therefore be rescaled into a more direct human benefit calculation? If so, how?
  • To tackle tough problems, it can be helpful to solve simpler cases first. At what scale can we accurately value resources - a forest, a wetland, a rare species of bird? Can valuation of ecosystem components be decomposed in this way? What about resources like oil or metals?
  • For pollutants, valuing sinks is important - e.g. the atmosphere, biosphere, and oceans for absorbing carbon. Can sinks be valued in the same way as resources or services?
  • In ecosystem service valuation, how can we value the cost-benefit of uncertain yet high-impact events? (e.g. worst-case climate change scenarios)
  • In the best case, what tools could we imagine investors or policymakers using in 20 years? What opportunities and benefits might arise?
  • What different strategies are available to implement market-based approaches for ecosystem goods and services valuation in developing countries? Developed countries?

We plan to write roughly one post a month until the series is done. Meanwhile, feedback on the general series idea would be welcome. Do you have suggestions or pointers? What would you most like to read about? Do you know of other efforts with which this series could be linked?

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This is a great topic, but I'd like to see you address also the limitations of ecosystems services valuation as a strategy. There was a strong argument made recently (in Nature? Science? can't lay my hands on it at the moment) to the effect that this work could have the unintended consequence that we continue to value only what can be monetarily valued.

So, the classic example would be once the price of water filtration technology drops to a certain point, it no longer would make economic sense to protect NYC's Catskills watershed via conservation strategies. Other examples abound where long-term conservation goals might be undermined by putting short-term price tags on certain services.

Posted by: Phil Mitchell on 17 Oct 06

What a fantastic idea. I'm really interested in seeing your ideas of how to implement world-changing legislation, in the very near future (not years down the road) and, equally as important, what the back-up plan is if, in the U.S., neither party can be brought swiftly into the fold, due to myriad entanglements and obvious resistance points. Will you look at this from a "this is how things are now (twin parties) so this is what we must evaluate" perspective or will you also lay out a work around/alternative path? In all of this, where will we find the leaders who will help enact your recommended policies?

Posted by: Tod Brilliant on 17 Oct 06

Thank you for tackling an important and relevant topic. While I understand the concerns cited by Phil Mitchell, we aren't attempting to value ecosystem goods and services in order to improve Earth Systems Science - we're doing so to improve Economics. Our political economy is of course a subsystem of Nature's functioning - by understanding how the latter benefits us, we'll improve our designs of the former.

Posted by: David Foley on 17 Oct 06

This sounds like a very interesting and potentially eye-opening series. I wonder if the Ethics section would include psychological dimensions -- not just external ethical behaviors, but some notion of people's level of consciousness. For instance, having an awareness of interdependence and the natural systems we are a part of: Is this of literal economic value because such people are more likely to foster healthy communities with sustainable businesses?

If so, it is worth spending money, perhaps lots, to support the development of such conscious people.

Posted by: Kim on 17 Oct 06

I think this an excellent topic for discussion.

Phil's concern is a valid one but, from the numbers I've seen so far of the value of ecosystems to the economy, I don't think it's going to be a serious issue for a long time.

And, to be honest, I'd prefer to be in a position where such issues need to be addressed!

Posted by: Tony Fisk on 17 Oct 06

For those interested, the Nature article I mentioned above was:

Selling out on nature
Douglas J. McCauley
Nature 443, 27-28(7 September 2006)

This week, Nature published a series of letters responding to the article, mostly lambasting it. But no one really addressed his basic points.

Posted by: Phil Mitchell on 19 Oct 06

Thanks for the suggestions and comments, folks!

Phil: yes, we'll try to address the limitations of ecosystem service valuation. I read the Nature article, and the argument about unintended consequences is certainly valid - look what happened with GDP! Yet there's probably room for a hybrid approach, combining values and thoughtful valuation.

Tod: "how to implement world-changing legislation, in the very near future" - we'd love to find forward-thinking legislators or policy-makers willing to speak to that. One might also start by identifying successful cases worldwide, and analyzing how and why they got implemented.

Kim: intriguing nuance on ethics. Douglas Hofstadter talks about something similar with his notion of "superrationality", i.e. enlightened long-term self-interest. As we become more and more able to see interdependence and long-range feedback loops, perhaps qualitatively new kinds of ethics arise in such persons and communities; as you suggest, the way we think about these complex issues might have very practical value.

We're really looking forward to tackling this series, especially with and for readers like you!

Posted by: Hassan Masum on 19 Oct 06

I'm very much looking forward to the series, and exploratation of the complexities.

Off topic, being from Aotearoa NZ, I love the koru (punga tree fern) image. If I'm not mistaken, it's an oak tree in the background, or a titoki. Regardless, great image. The koru signifies a new birth, an un-furling of a new life. The circular spiral represents the circularity of life. The new leaf curled up in the image will unfold to be like the graceful drooping leaves that you see in the background.

Most famously, Air NZ uses a stylised koru image on the tail of their planes.


Posted by: Christopher on 19 Oct 06

Hello all:

Pehaps I'm being a bit naive here, but I'm willing to go out on a limb and suggest that the valuation of (invisible to most) ecosystem services in terms that most people relate to is absolutely essential--for getting people to relate to costs that are now externalized, for evolving our systems to account for those costs, and for payment of those costs to eventually be factored into our way of living. What I am not yet clear about is how that which theoretically makes so much sense will be implemented in practical terms. I look forward to your timely updates and insights and applaud your willingness to take this on. It's not an easy one.

Larry Grob

Posted by: Larry Grob on 2 Nov 06



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