Wednesday, October 12, 2011

Valuing Ecosystem Services, Assessing Choices

William Nuttle, Organizer for CERF 2011 Synthesis Sessions

Ecosystem services are the benefits that people receive from the environment. For many ecologists, ecosystem services also might be the long-awaited key to sustainability. How can we best incorporate the goal of a healthy, sustainable environment into decision-making? The solution popularized by the Millennium Ecosystem Assessment involves calculating the economic value of benefits currently provided by the ecosystem.

This solution would revolutionize the current approach to environmental management. Established 40 years ago, in response to alarm over the growing environmental consequences of an expanding human population and industrial development, the current approach attempts to limit impacts. Various regulations on human activities construct protective firewalls to limit impacts on key environmental resources. Two generations have passed, and people now chafe against these restrictions, apparently either unaware or discounting the benefits they are intended to provide.

The new management approach requires decision-makers and stakeholders to make a full accounting of these benefits and weigh the costs of reduced ecosystem services against the anticipated benefits of proposed development. A new book edited by three alumni of the Millennium Ecosystem Assessment is the most recent step in advancing this program. Natural Capital: Theory and Practice of Mapping Ecosystem Services advances the idea of ecosystem services further along the gradient from concept into application. To do this, the editors assemble a useful guide that combines instruction in methods of analysis with case studies to illustrate their application.

On topics of interest to the CERF membership, the application of ecosystem services to coastal management is not as well developed as for some terrestrial ecosystems. Most elements of coastal and marine ecosystems lie hidden below the water, and key attributes related to ecosystem services are more variable in time and space than in on land. Then, there is the fact that many threats to coastal ecosystems have their source in the connected watershed, requiring an approach to management that integrates terrestrial and aquatic domains. Discussion of regional planning in Puget Sound illustrates how ecosystem services can be used to support decision-making, but one wonders if this is only because the state legislature took the first revolutionary step of mandating use of an ecosystem-level approach to management.

Still, this is the direction in which coastal management is moving. Besides this book, there a number of resources emerging on the web to support this change in management approach. The Marine Ecosystem Services Partnership (MESP), which advertises itself as a virtual center for information and communication on human uses of marine ecosystems, provides an online database of ecosystem service valuations that is global in scope. The Hart Research Institute, at Texas A&M University, provides an online database of ecosystem services focused on the Gulf of Mexico.

At some point it all comes down to money, and this is both the strength and weakness of this revolution in coastal management. It is a strength because, just as water is the universal solvent, money is pretty close to being the universal metric in planning. Kareiva et al. (2010) make the claim that "Scientific models move us from abstract, conceptual arguments about the importance of ecosystem services to specific quantification of the level, value and spatial distribution of ecosystem service benefits." By “value,” this means monetary value, most often.

Its weakness derives from the inherent fickleness of human nature. Methods of estimating the value of ecosystem services described in this book, and elsewhere, treat value as if it is an intrinsic property of components of the ecosystem, as if we were counting up the calories or grams of fat contributed to a dish by each of its ingredients. However, as anyone knows who has ever tried to understand the logic of house prices, ultimately value is defined by the price that a buyer is willing to pay.

Critics of ecosystem valuation raise the issue of biases and inequities that lie hidden in the various valuation methods and in the “objective” weighing of benefits and costs. For example, Wegner and Pascual (2011) offer a wide-ranging critique of cost-benefit analysis based on the valuation of ecosystem services. Problems arise where ever the actual behavior of people deviates from the economic ideal of the rational actor. People are susceptible to having their independent judgement hijacked by group-think tendencies; many are ignorant of how ecosystems work; and wealth affects a person's willingness to pay for certain ecosystem services relative to others. Value is not intrinsic to the ecosystem; it is also contingent on the circumstances of the buyers of ecosystem services, i.e. stakeholders.

The conclusion reached by both sides, the authors in Kareiva et al. (2011) on one and Wegner and Pascual (2011) on the other, is that the valuation of ecosystem services is useful as a guide to decision-making, but it is not the whole story. Scientific models and benefit-cost analysis do not substitute for the messy process of engaging stakeholders, forging a shared vision of the ecosystem, and articulating the possibilities for the future. Let's not get too distracted by the methodological question of how to assign a value to ecosystem services. Rather, let's concentrate on the real task of helping people assess the choices available to them.

This post relates to Topic 2: Human dimensions and Topic 6: Management challenges to be discussed during the Synthesis Sessions at CERF 2011.

Kareiva, P., H. Tallis, T.H. Ricketts, G.C. Daily, and S. Polasky, 2011. Natural Capital: Theory and Practice of Mapping Ecosystem Services. Oxford University Press, Oxford.

Wegner, G. and U. Pascual, 2011. Cost-benefit analysis in the context of ecosystem services for human well-being: a multidisciplinary critique. Global Environmental Change 21:492-504.

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