Presentation on theme: "Ecosystem Services for Economic Analysis : Conceptual Issues"— Presentation transcript:
1 Ecosystem Services for Economic Analysis : Conceptual Issues Dr Pushpam KumarInstitute for Sustainable Water, Integrated Management and Ecosystems Research ( SWIMMER),University of Liverpool, UK
2 What are Ecosystem Services? Answer depends on the purpose!If the purpose is mass awareness and education, MA’s classification and purpose are most relevant .If the purpose is valuation, accounting, executing PES Scheme etc, then a different approach would be needed
3 Regulating Ecosystem Services Provisioning Cultural Goods produced or provided by ecosystemsRegulatingBenefits obtained from regulation of ecosystem processesCulturalNon-material benefits from ecosystemsThe assessment focuses on the linkages between ecosystems and human well-being and, in particular, on “ecosystemservices.” An ecosystem is a dynamic complex of plant, animal, and microorganism communities and the nonlivingenvironment interacting as a functional unit. The MA deals with the full range of ecosystems—from those relativelyundisturbed, such as natural forests, to landscapes with mixed patterns of human use, to ecosystems intensively managedand modified by humans, such as agricultural land and urban areas. Ecosystem services are the benefits peopleobtain from ecosystems. These include provisioning services such as food, water, timber, and fiber; regulating services thataffect climate, floods, disease, wastes, and water quality; cultural services that provide recreational, aesthetic, and spiritualbenefits; and supporting services such as soil formation, photosynthesis, and nutrient cycling. Thehuman species, while buffered against environmental changes by culture and technology, is fundamentally dependenton the flow of ecosystem services.Original version of this slide was prepared by Karen Bennett, WRI.Photo credits (left to right, top to bottom): Purdue University, WomenAid.org, LSUP, NASA, unknown, CEH Wallingford, unknown, W. Reid, Staffan Widstrand
4 Established Fact-Ecosystem Services are like any other Capital Assets! fodder productiontourist attractionpollinationcarbon sequestrationflood protectionwater purificationslope stabilityBeautyrecreationBiodiversityfibre productionfood productionstabilising micro-climateshelter for life stockgame reserve
5 Economics of Ecosystem Services Conceptual Lenses of EconomicsBenefits people obtain from ecosystemsStock Vs FlowMetrics of ES- Stocks (ecological) and flow (ecosystem services)ES are flow on DD and SS side and imbalance would affect the stock!
6 Contd.. Ecosystem Services Lenses of Economics Timber, water, fodder The equivalent economic value of a stock that underlies a flow can be estimated from the present and assumed time course of ecosystem services flows by applying appropriate discount rate (natural capital)
7 Contd Ecosystem Services Lenses of Economics Charachteristics ES can have consumptive vs productiveES can have private good or public good features
8 Many BENEFITS of ES are public goods (Rivalness and Excludability, Spatial and Temporal Dynamics Joint Production, Complexity, Resilience and Interdependence of the Benefit )Private Benefit CaptureDifficultEasyEconomic ValuationDifficult or impossibleEasySpiritual & religiousInsurance Value?Aesthetic?Freshwater?Genetic Resources?Recreation & tourism?Fiber?Food?Economic Value ($)
9 Contd. Ecosystem Services Lenses of Economics vector of services produced by a vector of inputsintermediate / final goodsexternalities over space and time (soil erosion and flooding)
10 Water Recharge Function in a wetland as ‘Outputs’ I=O+ESMEvapotranspiration(E)Inputs(I)Wetland Area (e.g. Floodplain)Outputs(O)Soil Moisture(SM)The semantics of ‘intermediate / final’ good differs for ecologist and economist !
12 Resilience and Thresholds of Ecosystems: Possible Approach of Valuation The biggest perturbation, the ecosystem can absorb without being in another state is RESILIENCEthe system Resilience in several contexts may be treated as CAPITAL stockEstimate the accounting price (Maler, 2008)Accounting price here is changes in the expected change in net present value of expected future ecosystem services resulting from a marginal change in the resilience
13 Ecosystem Services require Indicators Indicators about the physical extent, condition and productivity of resources (e.g. size of fish stocks, soil organic matter levels, etc)rate of resource degradation (e.g. rate of forest land conversion)level of vulnerability to natural disastersVariables should not be automatically used asIndicators!!
14 Valuation of Ecosystem Services Agreements already onJoint effort (ecology and economics)Need to know initial condition of EcosystemsNeed to know the flow of ES (ecological production function) etc. etc.ButValuation must have a Purpose (resolving trade off, sectoral accounting, CBA, etc.)