Ecosystem services and valuing the environment

What’s the problem, who pays – and what about the rest of the natural world?

What’s the problem?

Ecosystem services’ and ‘Payment for Ecosystem Services’ have gained in prominence in recent years. The UN ‘The Economics of Ecosystems and Biodiversity’ (TEEB) and the UK National Ecosystem Assessment (UK NEA) reports have highlighted the importance of the natural environment to the economy.

Image: Ecosystem services are the goods and services which arise from the natural environment. Whilst the value of some ecosystem services can be seen through market transactions, such as for timber or wood for fuel, many are non-market ‘common pool resources’ or ‘public goods’ – such as regulation of the climate, maintaining water quality, mitigating flooding and biodiversity.

In these cases the lack of clear, or any, property rights means they are either over-exploited or undersupplied. Where existing natural resources are freely available without regulation or restriction to access they tend to be over used. A classic example is over-fishing, where wild fish are available ‘free’ without restriction they tend to be over-fished, leading to an eventual collapse of fish stocks.

Conversely where say, land use change in the upper catchment might benefit water quality or flood mitigation downstream through tree planting or creating wetland, the cost to the landowner in the absence of any payment means there is little incentive to act. In this case a valuable ecosystem service is undersupplied.

Who pays?

Payment for ecosystem services (PES) is an attempt to create a market for the benefits which arise from ecosystems – to link through market transactions, the beneficiaries of the ecosystem service with those who are able to protect or supply it. The nascent carbon market is an example of where people and businesses with net CO2 emissions are able to offset these through buying carbon sequestration or some other form of carbon abatement through tree planting or renewable energy schemes. In practice there are relatively few other examples of this kind of ‘pure’ PES, although linking land management in the water catchment for water quality and flood mitigation, to water customers may offer opportunities.

However the valuation of ecosystem services does provide a tool for ensuring that the benefits from the natural environment are taken into account in decision making and built into government incentives. Through understanding the economic value of protecting habitats such as ancient grassland or bog, or creating new habit through for instance woodland creation, these can be considered alongside competing land uses.

What about the rest of the natural world?

So does this mean for those parts of the natural environment which have no clear ecosystem service there is no value? Here we need to make the distinction between a value for specific goods and services and the value which people more generally place on the natural environment.Many people support the conservation of tigers, although they are unlikely to ever see a tiger in the wild, and gain no direct benefit from their conservation. By asking people what they would notionally be willing to pay to see tigers conserved, economist are able to calculate the value people place on tiger conservation. This willingness to pay (WTP) can then become a measure in decision making by giving it a monetary value which can be compared to other costs and benefits.

Is everything just money?

None of this is unproblematic. Many people will baulk at the very idea that a monetary value should be placed on the natural environment. Surely the natural environment has an intrinsic value outside any monetary value we may ascribe? But the idea of ‘value’ is itself a human constructed notion, and if everything might have intrinsic value this makes it difficult if you’re trying to decide between competing options. What it does perhaps do is set a tone for debate that recognises that not all things can be measured in strictly monetary terms and that there may be some value beyond immediate use.

Decisions about habitat protection in the face of development, consideration of how we mitigate impacts from one activity by setting it against another, development of incentives for provision of ecosystem services by farmers and landowners, and design of agri-environment schemes and so on, all require that we have some understanding of value – a way in which to compare apparently different and diverse options.

Environmental valuation does not provide an unqualified answer. The values which arise are not objective and absolute, they are a recognition of a value and one tool, but not the only tool, in decision making where the environment is affected or where land use change is likely. Participation, representation, active communities and individuals, government and non-governmental organisations, businesses and landowners, debate and negotiation – all these are also part of the way in which we reach decisions about environmental issues.

Mike Townsend, Communications and Evidence Adviser


About Kaye Brennan

Trying vegan, staying warm. Occasional bursts of words.
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15 Responses to Ecosystem services and valuing the environment

  1. Marcus Clarke says:

    Hi All,
    Great and erudite comments all but missing the biggest part of this whole debate.

    The poorest people on earth are the ones on the front line of the destruction of our environment. Their realities do not include valuing trees or tigers in terms of their aesthetics, their place in the ecosystem, the services they provide. Their reality revolves around surviving, feeding their family and looking after their most basic needs. They do not have the luxury of contemplating the intrinsic values of things when their livelihoods or lives are at risk. So it is a stark choice, chop down a tree for fuel or for cash or to grow crops, shoot an elephant that is raiding crops or is threatening people lives.

    We ask the worlds poorest communities to shoulder the greatest burden in the noble effort to save or planets ecosystem and biodiverstiy from the 3rd great extinction. They need to be compensated for living adjacent to wildlife whilst at the same time provided for in terms of health and education. What makes the situation worse is often that our consumption is the driver for their economic opportunity. in the meantime we are unable to live in the way we expect them to.

    We have destroyed our great forests and our wildlife already (and much of theirs also) and what little we have left we cannot live with either. Take two US examples, the bison and the wolf. Predator and prey. We managed (I use the we even though i am English) to reduce a population of American bison once estimated to be 40 million to 547 at their lowest ebb. Now they have a commercial value as meat for humans their numbers have got back to 500,000 mostly on private ranches.

    The timber wolf is in critical danger in the US whilst strides have been made to reintroduce some and protect others a large section of US society would exterminate all. The debate is currently raging and the seeming refusal to list them as an endangered species is leaving them at the mercy of hunters, Hundreds have already been killed in the US this season.

    How can we then ask people in Africa, Asia and South America who have literally nothing to live alongside dangerous animals or forests that can be turned into cash when we are unable or unwilling to? No country is blameless in this.

    Our reality is that we live in a world driven by economics and economics is responsible for the destruction of the environment. We measure success in society and nations by economic data and economic growth which is largely driven by consumption. So the attempt to value the environment and the services it provides is a response to market forces. It is quietly combative by providing an alternative to consumption, unfortunately its success will require a much better and less verbose academic framework. REDD and the European Carbon Trading scheme are both flawed because they are open to abuse or not robust enough.

    In terms of the valuation of wildlife which has been mentioned it can work, although it is under intense pressure now with the explosion on poaching this year.

    Conservationists have been using economics for many years as a tool to persuade locals to protect wildlife. Ecotourism is the favorite because it provides jobs and income for local people. Alongside this wildlife friendly model is the GMA another less well known part of the conservationists tool kit. Game Management Areas (GMA) are buffer zones around National Parks and protected areas where hunting and consumptive use of animals and plants is allowed. It is licensed and revenue from hunting permits boosts local incomes and provides and economic incentive to allow wildlife to live next door.

    This bloodthirsty side of managing wildlife is the reason WWF have been unable to condemn the shooting of an elephant by its former Patron the King of Spain. Even NGO’s have to accept that economics are the major hurdle faced by conservation, and revenues from hunting continue to maintain huge areas of African wilderness. I am not advocating hunting, which has major problems both ecologically and morally, but it does categorically protect land and species from conversion to agriculture.

    Many African countries provide the proof that monetizing wildlife works. Game reserves across africa that do not have the big five, elephant, lion, leopard, buffalo, hippo and rhino, cannot charge as much money. This sense of ownership provides and incentive to manage highly efficient anti poaching patrols and as strong commitment to their main attractions. In South Africa it has gone a step further as all game farms in SA are fenced and where mostly devoid of wildlife before becoming game reserves they literally buy and sell their animals on an annual basis. Their animals appear on the balance sheet as assets to be valued and looked after.

    Ultimately, valuing wildlife in my view, and ecosystem services is an efficient way of incentivising local communities to spare their wildlife. It may be distasteful to those who have a great and romantic sense of the intrinsic value of our planets amazing diversity but that has little practical value in the real world. Every ecosystem and biome on the planet is under intense pressure and risk of collapse, every possible tool is needed.

    My view is that we need an efficient and robust carbon market that pays people directly for protecting and hopefully regrowing large swathes of our rainforests, but with the European carbon adventure showing signs of failure in the near term we desperately need the USA to finally come to the climate change table. Without their commitment to Kyoto, Rio and all the other failed attempts at a climate agreement we have not got very far. If the USA signs up for a genuine and robust carbon trading scheme we could achieve a lot in the next twenty years.

    Finally, i think that we all need to accept that if we want to change the path that we are on then the wealthiest nations need to stand up and commit politically to paying for our ecosystem services. This is no small task. For all the Land Trusts great efforts they will never replace the 32 million acres of rainforest lost every year in the last decade alone. It will take a much larger effort. 80% of the worlds forest are already gone. Action is needed soon for our oceans, forests, climate and species diversity. I suggest a 1% of Global GDP set aside to pay the bill.

    I wish us all luck!!

  2. Julie Taylor says:

    Sounds like the beginning of a very unfortunate wedge labelled “Price of Everything” at the thick end and “Value of Nothing” at the thin end.

    I recall learning that the indigenous Americans did not believe land could be owned – every inch without price. But human history, particularly in the Common Era, is littered with the conflicts between those who would have a price on everything.

    • kupanda says:

      I come back to the importance of understanding value mediated by active participation and as part of a wider discussion. I value my children, but wouldn’t put a price on them. As sara suggests above, the price that might be put on ancient woodland lost to HS2 will not refelct the value I place on it, which transcends purely monetary considerations.


  3. sara p-h says:

    If you put a value on something, it means it can be bought and sold, that’s my worry. And how can you decide what value something is? I’d say ancient woodland is irreplaceable and therefore priceless, but I doubt that’s how the ancient trees in the path of the proposed HS2 are priced.

    Then I wonder if the cute and cuddly have a higher price than those that are ugly. Is a Tiger more worthy than a bacterium, say? Especially when you consider the excellent job many bacteria do at breaking things down so we’re not piled high with dead bodies. And what about nasty pathogens? Do they not have a price, too? And do they not deserve a place on the pricelist? Just playing Devil’s Advocate with that last point, but it ought to be considered if we are to begin putting price tags on things.

  4. All the other species live and die and never once do they feel sorry for themselves. Only people feel sorry for themselves. People are the only species that complain. Until recently people see the natural landscape only as a resource. The natural world does not “view” itself this way. So in New England, US, I serve the species’ forest. It is their forest, grassland, desert, ocean, river, mountain. When we came along these places were already occupied by all the other native species of plants, animals, fungi and soil microbes. These occupants can best run these places. People need to set aside species forests whenever possible.

  5. Annon says:

    While I see merit in valuing ecosystem services as suitable response to the “in current competitive climate dictated by economics, which all humans understand and can relate to” context, I wonder if the debate will ever turn to the validity of our perceived right as humans to put ourselves as the central (dare I say single, as indicated by our behavior) recipients of what has taken millions of years to evolve?

    While it may sound silly, taking a cross species “democratic” approach may be an interesting and insightful philosophical debate? E.g. If I were to ask a bee its opinion on the value of different land use options, would it come to the same conclusions as a human? Who is right and who’s right should prevail to vote? Let the termites in to the vote and lets see who wins? Would the bees and the termites form a coalition? Not that they would need to to get a majority vote. I wonder how they would describe the human party? What would we be likened to using current day human political speak? What would we be the equivalent of ?

    I personally think the time has come to have the debate as to whether we are animal (if so a class of parasite would be the most appropriate description by definition) or is there any possibility that we can give some meaning to the word being “human” used so flippantly to distinguish ourselves from all other living things without due consideration of what this may mean?

    If we are to cling on to being “human”, as distinct thinking conscious beings, what does it mean? Does it imply understanding our place in the context of all other species and habitats and taking responsible for our exploitative destructive power in a manner the recognized the rights of all other species to exists, after millions of years of evolution or not?

  6. jacquie Cox says:

    The trouble with intrinsic value is that it is subject to change at a moments notice. I may love the idea of paying a fiver to Friends of the Earth (or any other conservancy) to protect tigers when I have a few pounds to spare, but during hard economic times, feeding my children is a much more important priority. Intrinsic value is also subjective and based on our perceptions at any one point in time.

    Since many people support environmental organisations because they feel like they should ‘do their bit’, rather than because they have a passion for it, there is no true measure of the value of our environment, the air we breathe, the water we drink, even based on willingness to pay (WTP). The environmental ‘industry’ takes a knock in reputation when the more militant organisations are in the news, changing perceptions, and suddenly the WTP is reduced. Most people don’t know or understand how the environment is of service to them, and would probably place a greater value on it if they did. Equally, people are more likely to place a higher or any value on something that they may imminently lose. The recent outcry at the governments intention to sell off the public forests is a case in point.

    In many instances, government policy will mimic the subjective value we place on an issue. Take the carbon emissions targets that the last Labour government agreed to. It took a huge effort by Greenpeace and others to round up enough supporters to pressure the government into accepting higher targets than they might otherwise. The Airplot campaign against the third runway at Heathrow is another good example of policy following value, though that may soon be overturned.

    The problem with placing a value on any natural resource is being played out at Oaken Wood at the moment. The value to a large quarrying company of the ragstone beneath Oaken Wood, far outweighs the intrinsic value and eco-services provided by the wood – especially in the mind of a minister whose government is doling out austerity to the masses. The zero intrinsic value of the ‘ancientness’ of the Oaken Wood site to the quarrying company and its lawyers, is plain to see in their arguments for the extension of the quarry. Bottom line trumps intrinsic value every day of the week. Which pretty much makes Finn’s point.

    Rod, I am not sure that ‘experts-in-the-field’ deliberately used ‘biodiversity’ or ‘ecosystem services’ to exclude everyone else, but it may well have turned out that way. I have a degree in environmental science, but even before that I did not find those terms a problem. It’s what we do in explaining to a wider audience what they mean and how it impacts them, that is most important. The whole Sciences field is making a huge effort in recent years to make science more user friendly. Communicating science to a larger audience than just dry old academics, has become a prominent topic within Professional Bodies, and among scientists and government alike. As has been the case for decades, it remains the job of people passionate about the environment, to garner support for environmental causes and to raise awareness across the board.

    • kupanda says:

      I think the issue of language is an interesting one. I agree with Rod that language can be alienating – either intentional or ‘accidentally’. Epistemic communities (you see, now I’m doing it!) have an inbuilt tendency to develop a partiuclar lexicon. In some cases the words denote specific things for which there is no easy substitute, but often they just exclude.

      Communicating environamental issues is particulary tricky, because it is a mix of scientific ‘facts’, theories and projections based on modelling, cultural and social associations with landscapes and ways of life, conflicting world views and values and pressures for competing use.


  7. Pingback: Ecosystem services and valuing the environment | The Glory of the Garden |

  8. Roderick Leslie says:

    Its quite hard for people to get their heads round all this – in fact I personally feel ecosystem services is carrying on where biodiversity left off – both rather pompous words which aim to exclude ‘ordinary’ people – ie non-experts in the particular field – and perhaps its no surprise it results in less support from those same ordinary people.

    Here’s an interesting one – we all accept that the rain that falls of a farmers field is free – in fact we stop him preventing it running off or using it without permission – and often payment eg for crop irrigation – but the minute a water company collects it, suddenly it has value and they can make us pay – and, being near monopolies, make lots and lots of money. But this has massive consequences because we DO pay farmers to produce food, so they produce as much as possible. In the process, using our money, they pollute the water we won’t pay them for with fertiliser and pesticides, and drain the land as effectively as possible, speeding runoff downstream where it looks as if flooding is soon likely to cost people more than the entire subsidy to farming every year. And we spend £800m on flood prevention and £800m cleaning our drinking water every year.

    A real ecosystems services valuation would have us paying those farmers to slow the flow, letting water spread over meadowland and, even better, through woodland where the ‘friction’ of the trees slows it down even further. We would pay farmers not to poluute water in the first place – and, if, as seems fair much of that money is switched from paying for intensive production to paying for low-intensity management it won’t cost more – in fact I reckon it could save £1 billion a year in Government money, let alone the cost and heartache to the poor people who keep getting flooded. And there’d be more trees & a winding back of the intensity we manage our countryside with.

    • Jeramie Jones says:

      Regarding utilities charging for free water, I don’t think it is so much the water you’re paying for but rather the infrastructure to deliver it to you. I personally pay about $120 month for water, sewer, and garbage service. Really? $120 to have purified water delivered to my home whenever I want it and have all the garbage and human waste my household creates whisked away so I don’t ever have to think about it. Water is a necessity for life and sanitation is just as critical to the health of my family. $120 is a steal. I pay more for cable.

    • kupanda says:

      Thanks for the reply. You will I’m sure, be aware of Pontbren farmers in mid Wales. It’s an interesting example of where environmental measures at a farm scale and across a number of farms, aimed at meeting on-farm needs, have had wider ecosystem benefits, particularly for water quality and flooding. A reflection also of Elinor Ostrom’s notion of common pool resources, where the scale of delivery remains human and thus able to be mediated by peer approval and censure.


  9. Reblogged this on Plews Potting Shed and commented:
    without trees we would have no air to breathe…

  10. Finn Holding says:

    Monetisation of the environment is a means of parceling it up for exploitation, not protection. Exploitation, even in it’s most sensitive form, will lead to degradation of ecosystems – I can’t think of a single example where an ecosystem has benefited from human intervention, apart from those interventions made to repair damage already done by humans. Ecosystems in a location as crowded and subject to environmental stress as the UK need protection and conservation, not exploitation.

    Governments past and present have demonstrated little or no interest in conservation where financial interests may be jeopardised, so assigning a financial value to natural resources will inevitably lead to the intrinsic value and the less tangible benefits being ignored in the pursuit of money.

    I appreciate that valuation in this way will assist in enabling environmental discussion as part of policy making, but I don’t believe it will ultimately assist in ecological protection. And to fail in protecting the world around us is a very perilous path to follow.

    • kupanda says:

      I agree with much of what you say. This is why I think any valuation needs to be mediated by active participation and community involvement. Thanks for the reply


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