The services of ecological systems and the natural capital stocks that produce them are critical to the functioning of the Earth's life-support system. They contribute to human welfare, both directly and indirectly, and therefore represent part of the total economic value of the planet. We have estimated the current economic value of 17 ecosystem services for 16 biomes, based on published studies and a few original calculations. For the entire biosphere, the value (most of which is outside the market) is estimated to be in the range of US$16-54 trillion (10^(12)) per year, with an average of US$33 trillion per year. Because of the nature of the uncertainties, this must be considered a minimum estimate. Global gross national product total is around US$18 trillion per year.

https://www.esd.ornl.gov/benefits_conference/nature_paper.pdf

The value of the world's ecosystem services and natural capital

Humans are altering the composition of biological communities through a variety of activities that increase rates of species invasions and species extinctions, at all scales, from local to global. These changes in components of the Earth's biodiversity cause concern for ethical and aesthetic reasons, but they also have a strong potential to alter ecosystem properties and the goods and services they provide to humanity. Ecological experiments, observations, and theoretical developments show that ecosystem properties depend greatly on biodiversity in terms of the functional characteristics of organisms present in the ecosystem and the distribution and abundance of those organisms over space and time. Species effects act in concert with the effects of climate, resource availability, and disturbance regimes in influencing ecosystem properties. Human activities can modify all of the above factors; here we focus on modification of these biotic controls. The scientific community has come to a broad consensus on many aspects of the re- lationship between biodiversity and ecosystem functioning, including many points relevant to management of ecosystems. Further progress will require integration of knowledge about biotic and abiotic controls on ecosystem properties, how ecological communities are struc- tured, and the forces driving species extinctions and invasions. To strengthen links to policy and management, we also need to integrate our ecological knowledge with understanding of the social and economic constraints of potential management practices. Understanding this complexity, while taking strong steps to minimize current losses of species, is necessary for responsible management of Earth's ecosystems and the diverse biota they contain.

/pdf/effects-of-biodiversity-on-ecosystem-functioning-a-consensus-13j8vabcus.pdf

Effects of biodiversity on ecosystem functioning: a consensus of current knowledge

Freshwater biodiversity is the over-riding conservation priority during the International Decade for Action - 'Water for Life' - 2005 to 2015. Fresh water makes up only 0.01% of the World's water and approximately 0.8% of the Earth's surface, yet this tiny fraction of global water supports at least 100000 species out of approximately 1.8 million - almost 6% of all described species. Inland waters and freshwater biodiversity constitute a valuable natural resource, in economic, cultural, aesthetic, scientific and educational terms. Their conservation and management are critical to the interests of all humans, nations and governments. Yet this precious heritage is in crisis. Fresh waters are experiencing declines in biodiversity far greater than those in the most affected terrestrial ecosystems, and if trends in human demands for water remain unaltered and species losses continue at current rates, the opportunity to conserve much of the remaining biodiversity in fresh water will vanish before the 'Water for Life' decade ends in 2015. Why is this so, and what is being done about it? This article explores the special features of freshwater habitats and the biodiversity they support that makes them especially vulnerable to human activities. We document threats to global freshwater biodiversity under five headings: overexploitation; water pollution; flow modification; destruction or degradation of habitat; and invasion by exotic species. Their combined and interacting influences have resulted in population declines and range reduction of freshwater biodiversity worldwide. Conservation of biodiversity is complicated by the landscape position of rivers and wetlands as 'receivers' of land-use effluents, and the problems posed by endemism and thus non-substitutability. In addition, in many parts of the world, fresh water is subject to severe competition among multiple human stakeholders. Protection of freshwater biodiversity is perhaps the ultimate conservation challenge because it is influenced by the upstream drainage network, the surrounding land, the riparian zone, and - in the case of migrating aquatic fauna - downstream reaches. Such prerequisites are hardly ever met. Immediate action is needed where opportunities exist to set aside intact lake and river ecosystems within large protected areas. For most of the global land surface, trade-offs between conservation of freshwater biodiversity and human use of ecosystem goods and services are necessary. We advocate continuing attempts to check species loss but, in many situations, urge adoption of a compromise position of management for biodiversity conservation, ecosystem functioning and resilience, and human livelihoods in order to provide a viable long-term basis for freshwater conservation. Recognition of this need will require adoption of a new paradigm for biodiversity protection and freshwater ecosystem management - one that has been appropriately termed 'reconciliation ecology'.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/96AA265E3D88C95FB802E7A73CCB4332/S1464793105006950a.pdf/div-class-title-freshwater-biodiversity-importance-threats-status-and-conservation-challenges-div.pdf

Freshwater biodiversity: importance, threats, status and conservation challenges

In 1974 an article appeared in Science magazine with the dry-sounding title “Judgment Under Uncertainty: Heuristics and Biases” by a pair of psychologists who were not well known outside their discipline of decision theory. In it Amos Tversky and Daniel Kahneman introduced the world to Prospect Theory, which mapped out how humans actually behave when faced with decisions about gains and losses, in contrast to how economists assumed that people behave. Prospect Theory turned Economics on its head by demonstrating through a series of ingenious experiments that people are much more concerned with losses than they are with gains, and that framing a choice from one perspective or the other will result in decisions that are exactly the opposite of each other, even if the outcomes are monetarily the same. Prospect Theory led cognitive psychology in a new direction that began to uncover other human biases in thinking that are probably not learned but are part of our brain’s wiring.

Thinking fast and slow.

http://portal.nceas.ucsb.edu/working_group/ebm-matrix/pdf-reprints/de%20Groot_2002.pdf/attachment_download/file

A typology for the classification, description and valuation of ecosystem functions, goods and services

The purpose of this special issue is to elucidate concepts of value and methods of valuation that will assist in guiding human decisions vis-a `-vis ecosystems. The concept of ecosystem service value can be a useful guide when distinguishing and measuring where trade-offs between society and the rest of nature are possible and where they can be made to enhance human welfare in a sustainable manner. While win-win opportunities for human activities within the environment may exist, they also appear to be increasingly scarce in a ‘full’ global ecological–economic system. This makes valuation all the more essential for guiding future human activity. This paper provides some history, background, and context for many of the issues addressed by the remaining papers in this special issue. Its purpose is to place both economic and ecological meanings of value, and their respective valuation methods, in a comparative context, highlighting strengths, weakness and addressing questions that arise from their integration. © 2002 Elsevier Science B.V. All rights reserved.

SPECIAL ISSUE: The Dynamics and Value of Ecosystem Services: Integrating Economic and Ecological Perspectives Economic and ecological concepts for valuing ecosystem services

This study uses a contingent valuation (CV) survey to establish a sample of outdoor exercisers' willingness to pay (WTP) for ambient air quality improvements in East Baton Rouge parish, Louisiana. Estimated annual median and mean WTP values are $95 and $191, respectively, per person per year for assurance that ozone levels would not become ''unhealthful'' on any day. The survey informed respondents that in the prior year the local community experienced 14 days on which ozone levels exceeded federal standards. The study makes the strong assumptions that respondents believed they were ''buying'' 14 more healthy days and that WTP per day ''bought'' is constant. Given these assumptions, one can scale this WTP response to represent annual medians and means of approximately $7 and $14 per person per day, respectively. An econometric procedure for generalizing the community's annual WTP to avoid the 14 unhealthful days yields estimates ranging from $3.21 and $5.36 per person per healthy day, or between $12.4 and $20.6 million per year. The unit day estimates are comparable to CV and household production function estimates of WTP in the Los Angeles basin, suggesting their usefulness for benefits transfer.

Willingness to Pay for Air Quality: The Case of Outdoor Exercise

The economic cost of residual environmental risk : a case study of Louisiana

This study tests whether various measures of the price of capital and capital stock will influence estimates of electric utility allocative efficiency. Parametric shadow values are estimated for fuel and capital prices, and these values are tested against the hypothesis they are equal to unity. The theoretically correct Jorgenson-type price for capital services results in rejecting the inefficiency hypothesis, while a more simplified version of this price does not reject the efficiency hypothesis. The exact measure of opportunity cost of capital, discounted cash flow or capital asset price, does not influence the efficiency conclusions. Copyright 1989 by Blackwell Publishing Ltd.

Stephen Farber

Papers

SPECIAL ISSUE: The Dynamics and Value of Ecosystem Services: Integrating Economic and Ecological Perspectives Economic and ecological concepts for valuing ecosystem services

Willingness to Pay for Air Quality: The Case of Outdoor Exercise

The economic cost of residual environmental risk : a case study of Louisiana

The Dependence of Parametric Efficiency Tests on Measures of the Price of Capital and Capital Stock for Electric Utilities

Welfare-based ecosystem management: an investigation of trade-offs