Ecosystems and their constituent species provide an endless stream of products, functions, and services that keep our world running and make our existence possible. To many, even the thought of putting a price tag on services like photosynthesis, purification of water, and pollination of food crops may seem like hubris, as these are truly priceless services without which not only humans, but most of life would perish.A distinguished economist put it best in response to a seminar at the USA Federal Trade Commission, where the speaker downplayed the impact of global warming by saying agriculture and forestry “accounted for only three percent of the US gross national product”. The economist’s response was: “What does this genius think we’re going to eat?” (Naylor and Ehrlich 1997). Nevertheless, in our financially-driven world, we need to quantify the trade - offs involved in land use scenarios that maximize biodiversity conservation and ecosystem services versus scenarios that maximize profit from a single commodity. Without such assessments, special interests representing single objectives dominate the debate and sideline the integration of ecosystem services into the decision-making process (Nelson et al. 2009).
Valuing ecosystem services is not an end in itself, but is the first step towards integrating these services into public decision-making and ensuring the continuity of ecosystems that provide the services (Goulder and Kennedy 1997; National Research Council 2005; Daily et al. 2009). Historically, ecosystem services have been mostly thought of as free public goods, an approach which has too frequently led to the “tragedy of the commons” where vital ecosystem goods like clean water have been degraded and consumed to extinction (Daily 1997). Too often, ecosystem services have been valued, if at all, based on “marginal utility” (Brauman and Daily 2008). When the service (like cleanwater) is abundant, themarginal utility of one additional unit can be as low as zero. However, as the service becomes more scarce, the marginal utility of each additional unit becomes increasingly valuable (Goulder and Kennedy 1997). Using the marginal value for a service when it is abundant drastically underestimates the value of the service as it becomes scarcer. As Benjamin Franklin wryly observed, “When the well’s dry,we know the worth of water.” As the societal importance of ecosystem services becomes increasingly appreciated, there has been a growing realization that successful application of this concept requires a skilful combination of biological, physical, and social sciences, as well as the creation of new programs and institutions.
The scientific community needs to help develop the necessary quantitative tools to calculate the value of ecosystem services and to present them to the decision makers (Daily et al. 2009). A promising example is the InVEST (Integrated Valuation of Ecosystem Services and Tradeoffs) system (Daily et al. 2009; Nelson 2009) developed by the Natural Capital Project (www.naturalcapital.org). However, good tools are valuable only if they are used. A more difficult goal is convincing the private and public sectors to incorporate ecosystem services into their decision - making processes (Daily et al. 2009). Nevertheless, with the socio-economic impacts and human costs of environmental catastrophes, such as Hurricane Katrina, getting bigger and more visible, and with climate change and related carbon sequestration schemes having reached a prominent place in the public consciousness, the value of these services and the necessity of maintaining them has become increasingly mainstream. Recent market-based approaches such as payments for Costa Rican ecosystem services, wetland mitigation banks, and the Chicago Climate Exchange have proven useful in the valuation of ecosystem services (Brauman and Daily 2008). Even though the planet’s ecosystems, the biodiversity they harbor, and the services they collectively provide are truly priceless, market-based and other quantitative approaches for valuing ecosystem services will raise the profile of nature’s services in the public consciousness, integrate these services into decision-making, and help ensure the continuity of ecosystem contributions to the healthy functioning of our planet and its residents.
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