openLandscapes - The Basic Concept of Ecosystem Goods and Services

University of Kiel

University of Kiel, Ecology Centre, Msc Environmental Science, a seminar paper
Status: completed (2009)

The Basic Concept of Ecosystem Goods and Services

Bente Vollstedt and Ruth Graterol
bente_vollstedt@hotmail.com and ruth_grat@yahoo.com

Abstract

Ecosystem goods and services are benefits people obtain from ecosystems. The services are classified into four different categories (regulating, supporting, provisioning and cultural services). Overall the study about ecosystem services is relatively young and the term is now found in many scientific studies. Ecosystem goods and services are interlinked with human well-being. Changes in ecosystem services caused by different drivers, which can be indirect or direct, are causing changes in human well-being. Actually, ecosystem valuation helps to assess trade-offs between different management regimes and social actions that impact on ecosystems and the goods and services they provide. Hence, the magnitude of the changes of ecosystem condition and human well-being could be expressed more explicitly. However, decisions on ecosystem management should not be made only on the bases of the services they provide. Thus, it is fundamental to understand the concepts of ecosystem value and the valuation approaches. Due to the different and complex connections further research on ecosystem services is necessary.

1. Definitions of Ecosystem Services and Goods

While there are different definitions for ecosystem services and goods, three of the most commonly used definitions are outlined as follows:

Daily in 1997 provided the following definition: “ecosystem services are the conditions and processes through which natural ecosystems, and the species that make them up, sustain and fulfill human life. They maintain biodiversity and the production of ecosystem goods, such as seafood, forage, timber, biomass fuel, natural fiber, and many pharmaceuticals, industrial products and their precursors.”

Another commonly utilized definition is that “ecosystem goods (such as food) and services (such as waste assimilation) represent the benefits human populations derived, directly or indirectly from ecosystem functions” (Costanza et al., 1997).

The Millennium Ecosystem Assessment published its definition in 2003 and defines ecosystem goods and services as the “benefits people obtain from ecosystems. These include provisioning, regulating, and cultural services that directly affect people and the supporting services needed to maintain other services.” In the definition provided by the Millennium Ecosystem Assessment, ecosystem services are classified into provisioning, regulating, cultural and supporting services [more info.: Provisioning services, regulating services, cultural services and ecosystem integrity].

Provisioning services, these are the products obtained from ecosystem services. They include products such as food and fiber, fuel, genetic resources, biochemicals, ornamental resources and fresh water.
Regulating services, these are the benefits obtained from the regulating of ecosystem processes. These services include: air quality maintenance, climate regulation, water regulation, erosion control, water purification and waste treatment, regulation of human diseases, biological control and pollination.
Cultural services are the non-material benefits people obtain from ecosystems through spiritual enrichment, cognitive development, recreation, aesthetic experience and reflection. They include for example: cultural diversity, spiritual and religious values, knowledge systems, social relations, recreation, ecotourism and inspiration.
Supporting services are necessary for the production of all other ecosystem services. Included in the supporting services are soil formation, photosynthesis, nutrient and water cycling (MA, 2003).

2. Historical Overview of the Study of Ecosystem Services

The idea of ecosystem services is a relatively young concept and can be found in scientific articles, conference proceedings and research projects etc. With the depletion of the natural resources the concept of ecosystem services has gained popularity. Interestingly, the concept has enjoyed a long history although the term ‘ecosystem services’ was not explicitly used.

For example Plato (c 400 BC) was one of the first who recognized ecosystem services and a connection between them. He realized that the deforestation of Attica led to soil erosion and drying of springs. In 1864 George Perkin Marsh published his book “Man and Nature” which included modern ideas of ecosystem services. Marsh suggested that the Earth`s natural resources were not unlimited by pointing to changes in the soil fertility in the Mediterranean. Marsh`s study was nearly unnoticed and almost a century later three authors Osborn (1948), Vogt (1948) and Leopold (1949) published books about the recognition of human dependence on the environment and Vogt pioneered the concept of natural capital. In 1956 Sears recognized the recycling service of ecosystems (Mooney and Ehrlich, 1997).

For the establishment of the study ecosystem services the environmental movement played an important role. The movement began in 1962 with the publication of Rachel Carlson’s “Silent Spring”. The environmental science textbook by Ehrlich and Ehrlich 1970 indicated that the major threat to man’s existence is the destruction by man`s own activities. A report of the ‘Study of Critical Environmental Problems (SCEP)’ introduced at first the term “environmental services” in 1970. This study also mentioned a decline in ecosystem function which would cause a change in the environmental services. Services like climate regulation, fisheries, flood control, cycling of matter and pest control were cited (Mooney and Ehrlich, 1997; Vandewalle et al., 2009). In the following years different terms were used but “ecosystem services” became the standard in the scientific literature and was established (Ehrlich and Ehrlich, 1981).

Motivated by the fact that ecosystem services were given little weight in decision- making, in 1992 de Groot introduced his book “Functions of Nature”. In this work he stated that environmental functions are defined as “the capacity of natural processes and components to provide goods and services that satisfy human needs directly and indirectly”. Thus, functions are the link between natural process and components and human needs and activities. His mean goal was to design a comprehensive and universally applicable evaluation method, which translates environmental characteristics into functions provided by natural and semi-natural ecosystems. He took into account ecological and socio-economic factors. Driven by the same motivation as de Groot, Costanza et al. (1997) attempts to estimate the annual value of ecosystem services worldwide. He suggested that ecosystem functions refer to the properties or processes of ecosystems. Therefore, ecosystem goods and services represent the benefits humans derive, directly or indirectly, from ecosystem functions. He explained the concept of natural capital and affirmed that without it human welfare can not exist, since the natural capital provides the material for the provision of ecosystem services. His study aroused the question of how changes in the quantity and quality of various types of natural capital and ecosystem services may have an impact on human welfare. Meanly, the valuation techniques he used were based on the “willingness-to-pay” of people for ecosystem services. [more info.: From Functions of Nature to Ecosystem Services-Discussing Concepts and Research Projects].

Actually, all these studies corroborate that our actions on ecosystems can highly influence the integrity of the ecosystem services. However as mentioned previously, there is still much research required to understand fully the science of ecosystem services particularly as there exists a complex relationship between the different services.

3. Ecosystem Services and Human well-being

The Millennium Ecosystem Assessment said in 2005 that the human use of all ecosystems is growing and about 60% of the ecosystem services in the assessment are not used sustainable and are degraded. There is a close connection between the ecosystem services and human well-being, changes in ecosystem services can cause an impact upon the following components of human well-being: security, basic material for a good life, health, good social relations and freedom of choice and action. All these components provide the conditions for physical, social, psychological, and spiritual fulfillment. As seen in figure 1, security consists of personal safety, secure resource access and security from disaster. Adequate livelihoods, access to goods, shelter, income, assets and enough food at all times belong to basic material for a good life. Health is defined by strength, feeling well, access to clean air and water. Good social relations include social cohesion, mutual respect, the ability to help others, good gender and family relations.

These five dimensions can have a positive or negative impact on each others; this is the same as with the ecosystem services. A change in one component changes the other components as well.

Figure 1. Strength of linkages between different ecosystem services and components of human well-being. Also indications of the extent to which it is possible for socioeconomic factors to mediate the linkage are included (MA, 2005).

In figure 1, the linkages between ecosystem services and human well-being are illustrated. The equitable and sustainable well-being relies on these links with ecosystem services. The biodiversity is the fundament for many ecosystem services and has a buffering and stabilizing function. Biodiversity provides sources of ecosystem services and also if the times are bad it is a fallback option for example for food supply. As already mentioned the supporting services provide the base for all other services, thus the connection between the supporting service and human well-being is indirect. However it is not only the ecosystem services influencing the human well-being but also economic, social, technological and cultural factors have an influence on human well-being (MA, 2003; MA, 2005).

In the following discussion a few examples are given demonstrating the connection of ecosystem services and human well being. Figure 1 shows a change in provisioning and regulating services has a strong impact on the basic material for a good life. On the other hand changes in cultural services have relatively weak impacts on the components of the material for a good life. Changes in regulating services like disease regulation, climate regulation and flood regulation have very strong influences on security. The security is also influenced by a shift of provisioning services because a loss of these services can mean a loss of access to these resources. Freedom of choice and action can not exist without the presence of other elements of well-being. It is indirectly influenced by a change in all categories of ecosystem services and the other components of human well-being. A change of freedom of choice and action is mainly caused by socio-economic circumstances. People from wealthy countries with efficient governments and a strong civil society can retain their freedom of choice and action notwithstanding if there is a change in the ecosystem and with it in the service. However it is not possible for poorer countries where a change in the ecosystem can result in a loss in livelihood for their people (MA, 2005).

4. Drivers of Change in Ecosystems

According to the MA (2003) drivers are natural or human-induced factors which change ecosystem directly or indirectly. A direct driver influences ecosystem processes and can be identified with accuracy. On the other hand the indirect drivers are operating more diffusely by influencing one or more direct drivers. Direct and indirect drivers and their interactions can be identified by observation of the ecosystem. There are five indirect drivers of changes in ecosystems and their services: population change, change in economic activity, sociopolitical factors, cultural services and technological changes. These drivers and their interactions are affecting the level of resource consumption.

The world population doubled in the past forty years and is still increasing, a rising population and increased economic global activity means an increased demand for the services of ecosystems. The rising per capita income means also an increasing demand for ecosystem services furthermore sociopolitical drivers are influencing the decision making in form of participation. These groups have an impact on the institutional arrangements for ecosystem management and over the property rights of ecosystem services. The cultural and religious drivers are characterized through the value, beliefs and norms a group of people share. Cultural difference can have an important influence on use of ecosystems and their services because the culture of people can have an influence on the consumption behavior and the value to the environment. The development of science and technology can also have a profound influence on ecological systems and the human well-being. For example new techniques can degrade ecosystem services (decreasing of marine fish stocks).

The direct drivers of ecosystems are growing in intensity. These drivers are physical, chemical and biological such as habitat change, overexploitation, invasive alien species, pollution and climate change. The diverse ecosystems are affected by different direct drivers particularly the terrestrial ecosystems which have been affected by land cover change and the application of new technologies. New technologies are responsible for an increasing supply of some ecosystem services like agricultural yield. The overexploitation of fish is a direct driver for marine ecosystems. Freshwater ecosystems and their services are influenced by different direct drivers such as the modification of water regimes, invasive alien species and pollution particularly through phosphorus and nitrogen. Also, the coastal ecosystems are influenced by multiple direct drivers, these include: fishing pressure, habitat loss, invasive alien species, nutrient load and pollution through lands, rivers and oceans. Furthermore, the increasing temperature through climate change is influencing the structure and function of all ecosystems as well (MA, 2003; 2005).

5. Concepts of Ecosystem Value

The “value” of ecosystems is viewed and expressed differently by different disciplines, cultural conceptions, philosophical views, and schools of thought (Goulder and Kennedy, 1997). For this reason decision making concerning ecosystems and their services can be challenging. The Millennium Ecosystems assessment identifies two paradigms of value, the utilitarian and the non-utilitarian, this classification helps to distinguish between the different concepts of value.

The utilitarian (anthropocentric) concept of value is based on the principles of human’s preference satisfaction (welfare). The utilitarian approach usually tries to measure all ecosystem services in monetary terms. However, the choice of valuation technique depends on the characteristics of each case and the data availability (MA, 2005a).

On the other hand, the non- utilitarian value paradigm comes from a variety of ethical, cultural, religious, and philosophical worldviews. Nevertheless, in general a non-utilitarian value implies that an ecosystem is valued even though it does not contribute directly to human well-being. Some of the most notable non-utilitarian values are: ecological, socio-cultural and intrinsic values (MA, 2005a).

Ecological Value
The different ecosystems and their species play different roles in the maintenance of essential life support process such as energy conversion, biogeochemical cycling and soil formation. For instance, the value of a particular tree species to control erosion or the value of one species for the survival of another species or an entire ecosystem (Farber et al., 2002). The ecological value of ecosystems is mainly incorporated in the supporting services (MA, 2005a).

Socio-cultural Value
For many people, socio-cultural identity is greatly linked to the ecosystems in which they live and depend on. People value the different ecosystem services based on their mind set or conception of nature and society. Thus, the ethical, religious, cultural, and philosophical aspects of human society shape the way people treat the environment. This type of value is generally captured in the “Cultural” ecosystem services and it transcends utilitarian preference satisfaction (MA, 2005a).

Economic Value
It is based on the utilitarian concept of value. In this paradigm ecosystems have value because of the services they provide to people (material and nonmaterial needs). Many valuation methods have been developed to quantify different services. It considers people’s willingness to pay and to accept for a particular ecosystem service (MA, 2005a).

Intrinsic Value
Essentially, the intrinsic value is attributed to all living beings just because of the fact that they exist, it is not imposed by any external entity. For instance, in the Hindu religion the presence of Brahman in all natural things is the basic of intrinsic value. The intrinsic value attributed to natural ecosystems and the wildlife they contain, is an important factor in the feeling of well-being to many people (MA, 2005a; de Groot et al., 1992).

Figure 2. Figure 2: Framework for integrated assessment and valuation of ecosystem goods and services (De Groot R. et al., 2002). Modified by: Vollstedt B. and Graterol R.

Figure 2 represents the relationship between the ecosystem goods and services and the different paradigms of value mentioned above. The model illustrates how the ecological, social-cultural, economic and intrinsic values are aggregated by decision maker to come up with a total value. The decision makers weight each value and consider other aspects (Social objective, political, etc.). Consequently, this would lead to the design of environmental policy or management measures. Finally, these management regimens would end impacting on the way ecosystems provide good and services. It is understood, that great parts of the human-well being depend on the integrity of the supporting services, which provide the necessary condition to supply other ecosystem goods and services.

6. Some motivations for economic valuation suggested by the Millennium Ecosystem Assessment

Some of the reasons people undertake economic valuations of ecosystems are:

To assess the magnitude of the contribution of ecosystems to social and economic human well-being.
To understand how and why people use ecosystems they way they do. Perhaps, ill environmental policy design or wrong incentives (ecosystems services underpriced or not priced at all).
To assess the impact of the changes of different management regimes on ecosystem good and services.
To make the different ecosystems services comparables by providing a common metric.
To help to assess those ecosystem services that are not tradable, so are not captured in the conventional systems of national accounts as part of total income. Hence, it would help to improve the environmental policy actions.

7. Economic valuation of Ecosystems Services

The Millennium Ecosystems Assessment 2005 stated that “ecosystem services valuation is a tool that enhances the ability of decision-makers to evaluate trade-offs between alternatives ecosystem management regimes and courses of social actions that alter the use of ecosystems and the services they provide”. In order to make wise ecosystem management decision, it is necessary to assess the impact of the changes in ecosystem goods and services on human well-being. Economic valuation of ecosystem services is one of the tools used to quantify the magnitude of these changes. Valuation helps to understand how ecosystem management decisions influence ecosystems as well (MA, 2005a).

According to Costanza et al. 1997, “because the ecosystem services are not fully “captured” in commercial markets or adequately quantified in terms comparable with economic services and manufactured capital; they are often given too little weight in policy decisions. Thus, this kind of management regime compromises the sustainability of the biosphere”. Economic valuation helps to include the different non-marketable services in national accounts as part of total income. This would enhance the ability of decision makers to determine appropriate policy options and management measures. It is also important to highlight that economic valuation is only one of the bases or ways on which decisions on ecosystem management should be made. In fact, it is important to consider other aspects such as social-cultural, ecological and intrinsic value of the ecosystems goods and services. Some of the most commonly used evaluation methods are: Travel cost method, contingent valuation, changes in productivity, cost based and hedonic prices. Several factors and conditions determine the choice of measurement method (MA, 2005a).

8. Total Economic Value (TEV)

This framework is founded on the utilitarian value of ecosystems. Actually, economists have classified ecosystem values into several types. There are two main categories use value and non-use value. MA (2005a) states that use value refer to the value of ecosystem services that are used by humans for consumption or production (tangible and intangible). In addition, this value contains three sub categories, direct, indirect value and option value.

On the other hand, non-use value (existence value) refers to the value people allocate to ecosystems or resources just because of the fact they exist even though they never are going to use them directly. For example, a person willing to pay to protect the birds community of the Venezuelan Delta Amacuro even though she or he will never expects or wants to go there.

Figure 3: The total economic value framework (MA, 2005a).

Figure 3 shows the commonly used valuation methods to quantify or estimate the value of different ecosystems services. They are used according to the case, type of service and data availability.

9. Conclusion

Ecosystem goods and services are the benefits people obtain from different ecosystems. Thus, changes in ecosystems would impact on human well-being. Ecosystems services changes are caused by direct and indirect drivers (natural and anthropogenic). Nowadays, the direct drivers of ecosystems are growing in intensity. The reason for this could be the considerable changes in some indirect drivers such as population growth and the increase in global economic activities.

In order to analyze in an explicit way the magnitude of these changes, it is necessary to understand the different concepts of ecosystem value and valuation approaches. Economic valuation helps to quantify the benefits provided by ecosystems and the impact of the changes of ecosystems goods and services on human well-being. However, decisions concerning ecosystem services should not be only based on economic considerations; other factors such as notions of intrinsic value and society’s objectives should be considered. Because of the complex connections between the different aspects of ecosystem services more research is needed.