Ecosystem Services Valuation

Ecosystem Services Valuation is the current classification for the economic accounting of natural assets. Ecosystem Services are defined as the benefits people receive from a functioning ecosystem. This tool was developed in recognition that many of the value that people receive from ecosystems is typically unknown and often not considered in decisions that can impact both the ecosystem and the benefits arising from its existence. This results from the public goods nature typical of these benefits in that they are non-excludable and non-rival. Non-excludable means that it is difficult or impossible to keep people from enjoying the benefits from an ecosystem service. For example, storm surge mitigation from a coastal wetland will be realized by everybody in the vicinity and cannot be allocated only to specific households. Non-rival is the condition where one person’s consumption does not not diminish the ability of another person to enjoy that benefit. Therefore, the benefits from public goods cannot be easily captured and traded as typical with most goods bought and sold in a market.

The Economic Valuation of Ecosystem Services is an attempt to estimate values in monetary terms in order to develop information on how various states of a given ecosystem will affect the beneficial flow of ecosystem services. More importantly, this information can be developed in comparison to alternative investment and management decisions. Additional analysis can be undertaken to assess issues of distribution of benefits – by different social groups, different geographic areas, and different generations.