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
|Publisher||WOT Natuur & Milieu, Wageningen UR|
- ecosystem services
- economic theory
- natural resource economics
- environmental economics
- welfare economics
- cost benefit analysis