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Ecosystem Goods and Services
Gloria Espinoza and Tatiana From
gloria.espinoza@hotmail.de and tatianafrom@googlemail.com
In the relatively young science about the ecosystem services there still exist
uncertainties about the subject of talk. Basically, there are three commonly used
definitions.
One of the definitions has been proposed by Daily (1997): “Ecosystem services refer
to a wide range of conditions and processes through which natural ecosystems, and
the species that are part of them, help sustain and fulfil human life. These services
maintain biodiversity and the production of ecosystem goods, such as seafood, wild
game, forage, timber, biomass fuels, natural fibres, and many pharmaceuticals,
industrial products, and their precursors. The harvest and trade of these goods
represent important and familiar parts of the human economy” [11].
Definition of Robert Costanza was presented in the year 1997: “the benefits human
populations derive, directly or indirectly, from ecosystem functions”. It still needs new
interpretation, as he noticed during the Salzau Workshop on Ecosystem Goods and
Services (“Solution for problems or problem that needs solution?”) which took place
from the 13 till15 of May 2008. [2]
During many presentations, the need of a new definition which could take into
account changes in the interpretation was clearly observed.
So, according to De Groot (1992 and 2002) ecosystem functions are “Capacity of
ecosystem components and processes to provide goods and services that satisfy
human needs (directly and indirectly)”. [8]
Definition of the Intergovernmental Panel on Climate Change: "Ecosystem services
are ecological processes or functions that have value to individuals or society". [10]
However, Millennium Ecosystem Assessment is one of the most popular and
internationally used definitions of ecosystem goods and services: “benefits that
people derive from ecosystems” [1].
These include provisioning, regulating, and cultural services that directly affect
people and the supporting services needed to maintain other services.
Classification
Classifications of ecosystem goods and services neither represent a single system,
but still most of them are based on the Millennium Assessment approach.
The Millennium Ecosystem Assessment distinguishes four classes of ecosystem
services [1]:
Provisioning services, the products obtained from ecosystems, including, for
example, genetic resources, food and fibre, and fresh water.
Regulating services, the benefits obtained from the regulation of ecosystem
processes, including, for example, the regulation of climate, water, and some human
diseases.
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Supporting services, which are necessary for the production of all other ecosystem
services. Some examples include biomass production, production of atmospheric
oxygen, soil formation and retention, nutrient cycling, water cycling, and provisioning
of habitat.
Cultural services, the non-material benefits people obtain from ecosystems through
spiritual enrichment, cognitive development, reflection, recreation, and aesthetic
experience as well as knowledge systems, social relations, and aesthetic values.
During the Salzau Workshop, R. Costanza presented another way of classifying
ecosystem goods and services, according to spatial and temporal characteristics
(worked out in 2007):
1. Global-Non Proximal (does not depend on proximity)
Climate Regulation
Carbon sequestration (NEP)
Carbon storage
Cultural/Existence value
2. Local Proximal (depends on proximity)
Disturbance Regulation/ Storm protection
Waste Treatment
Pollination
Biological Control
Habitat/Refugio
3. Directional Flow-Related: flow from point of production to point of use
Water regulation/flood protection
Water supply
Sediment regulation/Erosion control
Nutrient regulation
4. In situ (point of use)
Soil formation
Food production/Non-timber forest products
Raw materials
5. User movement related: flow of people to unique natural features
Genetic resources
Recreation potential
Cultural/Aesthetic
Another important way of classification is a more market related one, as it considers
the character of ecosystem goods and services according to the concepts of
rivalness and excludability.
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Excludable
Non-excludable
Rival
Market goods and services Open access resources
(most
provisioning (some
provisioning
services)
services)
Non-rival
Club
goods
(some Public goods and services
recreation services)
(most
regulatory
and
cultural services)
Table 1 Classification of the ecosystem goods and services according to the concepts of
rivalness and excudability. [2]
Main approaches and concepts to define ecosystems goods and
services
In order to deal in the market concept with ecosystem goods and services there
exists a typical scheme according to which user can evaluate services’ implication in
the policy and conservation of biodiversity (which is under special attention in the
framework of the “Environmental Sustainability” Goal of the Millennium Development
Goals worked out by the United Nations Organization). RUBICODE (Rationalising
Biodiversity Conservation in Dynamic Ecosystems) presented the following
conceptual framework during the Salzau Workshop. [12]
Figure 1 Identification of ecosystem services according to RUBICODE (Rationalising
Biodiversity Conservation in Dynamic Ecosystems)
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In general, those Millennium Development Goals are [3]:
Goal 1: Eradicate extreme poverty and hunger.
Goal 2: Achieve universal primary education.
Goal 3: Promote gender equality and empower women.
Goal 4: Reduce child mortality.
Goal 5: Improve maternal health.
Goal 6: Combat HIV/AIDS, malaria, and other disease.
Goal 7: Ensure environmental sustainability.
Goal 8: Develop a global partnership for development.
According to the will of the global society those aims should be distinguished by the
joint efforts of all countries. And as stated in the results of the Millennium Ecosystem
Assessment, changes in the ecosystem services influence directly human well-being,
especially endangered is situation because of the character of the those changes:
which are stated as non-linear., and therefore difficult to predict.
According to the findings of the Millennium Ecosystem Assessment, over the past 50
years, humans have changed ecosystems more rapidly and extensively than in any
comparable period of time in human history to meet rapidly growing demands for
food, fresh water, timber, fiber and fuel.
This has resulted in a substantial and largely irreversible loss in the diversity of life on
Earth.
Changes in the ecosystem services and human well-being
The changes that have been made to ecosystems, as stated in the Millennium
Ecosystem Assessment, have contributed to substantial net gains in human wellbeing and economic development, but these gains have been achieved at growing
costs in the form of:

degradation of many ecosystem services;

increased risks of nonlinear changes;

exacerbation of poverty for some groups of people.
These problems, unless addressed, will substantially diminish the benefits that future
generations obtain from ecosystems.
Here the society faces the problem of sustainable way of thinking, and this refers to
the ecosystem services, as well [6]. Without long-term planning of projects and
multilateral work of scientists and policy-makers there will be no effort attained.
Still, there are other issues to deal with in the field of ecosystem goods and services.
To those belongs the problem of multifunctionality, which is of special interest in
terms of evaluating and creating market for ecosystem goods and services.
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Problems of multifunctionality in terms of ecosystem services
The term multifunctionality refers to the fact that an activity can have multiple outputs
and therefore may contribute to several objectives at once.
Especially in ecosystem services scientists face this problem, as ecosystem functions
are so manifold that there are still discussions whether all ecosystem functions are
presented in the known classifications.
Ecosystem services are mostly public goods, but valuation is only possible for those
which are included in the utility function of individuals or the production function of
companies, treating them as private goods.
So, the question is how to implement ecosystem services in economic accounting?
This issue was also widely discussed during the Salzau Workshop.
One of the possible solutions is the Green National Accounting (Green GDP
Accounting for short). It refers to an accounting system deducting natural resources
depletion costs and environmental degradation costs, so as to assess the quality of
economic development in real sense.
The Green Gross Domestic Product (Green GDP) is an index of economic growth
with the environmental consequences of that growth factored in. [9]
Economic aspects of ecosystem services and biodiversity
In spite of the crucial ecological, cultural and economic importance of ecosystem
services, biodiversity of ecosystems is still declining worldwide. One major reason for
the continued loss and degradation of ecosystems is that the value (importance) of
ecosystems to human welfare is still underestimated in most economic development
decisions because the benefits of their services are not, or only partly, captured in
conventional market economics.
Furthermore, the costs of externalities of economic development (e.g. pollution,
deforestation) are usually not accounted for and inappropriate tax and subsidy
systems stimulate over-exploitation of resources and other ecosystem services.
There is also a lack of data for the process of decision making: most decisions in
which trade-offs in ecosystem services are involved are based on incomplete
information, leading to non-sustainable developments. Often the economic and social
costs of non-sustainable ecosystem use are only realized when values are lost that
can often only be restored at high costs.
Because 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.
This neglect may ultimately compromise the sustainability of humans in the
biosphere. The economies of the Earth would not exist without the services of
ecological life-support systems, so in one sense their total value to the economy is
infinite.
However, it can be instructive to estimate the ‘incremental’ or ‘marginal’ value of
ecosystem services (the estimated rate of change of value compared with changes in
ecosystem services from their current levels). There have been many studies in the
past few decades aimed at estimating the value of a wide variety of ecosystem
services.
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During the Salzau Workshop many presenters referred to such projects.
Still, if thinking in a long-term way, it is worthy to mention that there is still and will
probably stay in the future a certain amount of problems to deal with: those are
uncertainties in estimating and valuing ecosystem services. To eradicate the problem
or at least to try to, many presenters during the workshop talked about the
importance of:

additional efforts in studying and valuing ecosystem services;

incorporating of more realistic representations of ecosystem dynamics and
interdependence;

changes in ecosystems (which are supposed to become more non-linear
leading to the “scarcity” of ecosystem services in the future).
Ecosystem values, markets and GNP
As noted, the value of many types of natural capital and ecosystem services may not
be easily traceable through well functioning markets, or may not show up in markets
at all.
There is also no necessary relationship between the valuations of natural capital
service flows, even on the margin, and aggregate spending, or GNP, in the economy.
This is true even if all capital service flows had an impact on well functioning markets.
[7] A large part of the contributions to human welfare by ecosystem services are of a
purely public goods nature.
They accrue directly to humans without passing through the money economy at all. In
many cases people are not even aware of them. Examples include clean air and
water, soil formation, climate regulation, waste treatment, aesthetic values and good
health.
Problem of payment for ecosystem services
The problem of payment for ecosystem services is raised because of the ecosystem
services’ market character: ecosystem services are mostly non-tradable public goods
and there is no market existing therefore [4]. But under the circumstances of
valuating ecosystem services and creating the market for some of them, there can be
certain payment schemes applied. Those examples refer to the changes in the
decision-making processes, as applying such schemes can not only minimize the
impacts on the ecosystems by humans in the present, but also influence the future
state of the ecosystem services.

Sequestration and storage (e.g. electricity company paying farmers in the
tropics for planting and maintaining additional trees);

Biodiversity protection (e.g. conservation donors paying local people for
setting aside areas to create a biological corridor) [5];

Watershed protection (e.g. downstream water users paying upstream farmers
for adopting land uses that limit soil erosion or flooding risks);

Landscape beauty (e.g. a tourism operator paying a local community not to
hunt in a forest being used for wildlife viewing).
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Future of ecosystem services
Problems in decision-making process
The ecosystem services concept has been taken-up by the business world, probably
because of its utilitarian content and its potential for economic valuation.
Two recent UNEP (United Nations Environmental Program) Finance Initiative
meetings outlined key challenges and barriers for financial institutions in the
biodiversity and ecosystem services arena. These include:
1. Need to develop best practice case studies at the country and sector level to
better inform financial institutions on risks and opportunities.
2. Difficulty in reconciling and communicating short-term private gains vs. long-
term social (and private) impacts.
3. Need for disaggregating "ecosystem services" into more specific, "bite-sized"
components or issues (e.g., fresh water, carbon, flood control); otherwise, the
issue remains too big for an institution such as a bank to tackle effectively.
4. Absence of relevant and effective regulatory frameworks and price signals.
5. Absence of consensus on ecosystem services valuation.
6. Need for developing capacity of consultants that work with banks on these
issues.
Nevertheless, recommendations on accounting for ecosystem services (but also
biodiversity and/or the environment in general) are increasingly taken into
consideration in the business world.
Cooperation and coordination: present state and future tendencies
Questions asked by scientists and politicians are not always the same, but still have
common issues to deal with. Those include: the extent up to which ecosystems are
able to provide goods and services in a sustainable way and how can in such case
effects of ecosystem degradation and biodiversity loss be measured.
Another important issue of future coordination between related sciences and
decision-makers is the importance (value) of ecosystem services, referring not only to
economical side but also taking into account ecological and cultural values and
perceptions.
For politicians the following question is of high importance: how can
users/beneficiaries of ecosystem services be identified and how can they be involved
in structural financial streams to maintain ecosystems and their services? As resulted
after the Salzau Workshop, there is still a big field of discussion for all parties left.
And the most important issue in terms of coordination in common is how
communication can exist between the knowledge on ecosystem services and values
to decision makers and the general public and thus building local and political
support.
Ecosystem services in the international agenda
In the past years, attention for ecosystem services and their values have increased
rapidly. Several international conferences (e.g. the World Parks Congress (Durban,
7
Sept. 2003) the IUCN World Conservation Congress (Bangkok, Nov. 2004)) and
Conventions (for example CBD or Ramsar) placed “Ecosystem Services and
Benefits” high on the agenda.
The release of the Millennium Ecosystem Assessment (2005) was an important
milestone, highlighting the dependence of human well-being on ecosystems, and
stressed the need to better describe, quantify and value (ecologically, culturally and
economically) the importance and benefits of the goods and services provided by
ecosystems and biodiversity.
Such Workshops, as Salzau, play a significant role in stressing the attention of
different parties to the existing problems and showing the need for more cooperation
in the field by all interested parties.
Scientists work to help understand the interconnection and interdependence of the
many plant and animal communities within ecosystems. Although substantial
understanding of many ecosystem services and the scientific principles underlying
them already exists, there is still much to learn.
The tradeoffs among different services with in an ecosystem, the role of biodiversity
in maintaining services, and the effects of long term and short-term perturbations are
just some of the questions that need to be further explored. The answers to them will
provide information critical to the development of management strategies that will
protect ecosystems and help maintain the provisions of the services upon which
humans do depend.
The choices made today in how to use land and water resources will have enormous
consequences on the future stability of earth's ecosystems and the services they
provide.
Future of ecosystem services’ discussion
Under the circumstances of non-linear by changing environment the role of
ecosystem services both in the scientific world and in the decision-making process
will continue growing. As this branch of science is young and has problems in
understanding and dealing with different issues there should be enough attention
paid to coordination between different parties and cooperation of science with
economy and policy.
Only in the case of multi-side interest can further projects be conducted in this field
and only in that case there can exist a talk about implementation of theoretical
concepts in the real market economy and of the world.
References
1. www.millenniumassessment.org
2. Findings of the Salzau Workshop on 13-15 of May 2008.
3. Walter V. Raid “Ecosystems and human well-being: synthesis. A report of the Millennium
Ecosystem Assessment”. Washington, DC, Island Press, 2005.
4. Hans Wiesmeth “Umweltökonomie. Theorie und Praxis im Gleichgewicht” (p. 64). Heidelberg,
Springer Press, 2003.
5. Otto T. Solbrig “Importance of conservating biological diversity” in the “Global environmental
change” (p. 100). Edited by Robert W. Corell and Patricia A. Anderson. NATO ASI series.
Heidelberg, Springer Press, 1991.
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6. Hans-Joachim Schellnhuber, Volker Wenzel “Earth system analysis. Integrating science for
sustainability” (p. 30). Heidelberg, Springer Press, 1998.
7. Thomas Prugh with Robert Costanza “Natural capital and human economic survival” (p. 91).
Lewis Publishers, Boca Raton, Florida 1991.
8. http://www.ecosystemservicesproject.org/
9. http://www.fs.fed.us/ecosystemservices/
10. http://www.ipcc.ch/
11. http://www.esa.org/
12. www.rubicode.net
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