Economic viewpoints on ecosystem services
Year: 2013
Type: report
Abstract: to help determine the different values of ecosystems. Ecosystem services are usually divided into four categories: provisioning services, regulating services, cultural services and habitat services (previously denoted as supporting services). This overview highlights economic theories about ecosystem services, distinguishing between pre-classical economics, classical economics, neoclassical economics and modern economics. In addition, specific attention is given to two special branches of economics: (i) natural resource and environmental economics and (ii) ecological economics. Natural resource and environmental economics basically deals with a welfare economics analysis of natural resource and environmental issues, such as pollution control, natural (i.e. renewable and non-renewable) resource exploitation, and global environmental problems such as climate change. The more recent discipline of ecological economics was launched as a new paradigm with closer ties to the natural sciences. Whereas environmental economics focuses on value dimensions (i.e., utility and welfare in theory, and costs and benefits in practice), ecological economics – as a heterodox, non-coherent school of economics – is inclined to add ecological criteria to these dimensions, to cover aspects such as productivity, stability and resilience of ecosystems. Since a proper pricing system for many ecosystem services simply does not exist, various non-market valuation techniques have been developed to elicit the value of these services. Monetary valuation of ecosystem services remains problematic however, for one thing because of the hidden value of the ecosystem structure that supports the different ecosystem services (the ‘glue value’). Finally, the issue of policy analysis and design is addressed. The rationale for regulation with regard to nature and ecosystem services is that adverse risks, such as overexploitation, are not adequately priced in markets. Welfare economics tools for evaluating policies and projects include cost-benefit analysis and cost-effectiveness analysis. From an ecological economics standpoint, multicriteria analysis, the precautionary principle and the method of safe minimum standards are topical issues. The latter two policy tools suggest that we should err on the side of caution in the face of ecological uncertainty. The advancement of knowledge in this field requires further interdisciplinary cooperation between the natural and social sciences. Key words: ecosystem services, history of economic thought, welfare theory, market failures, policy failures, economic valuation, cost-benefit analysis, cost-effectiveness analysis, multicriteria analysis, precautionary principle, safe minimum standards
Authors: H.J. Silvis, C.M. van der Heide
Language: English
Subfield: Global and Planetary Change
Field: Environmental Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W2186377992