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Ecosystem Services and Valuing Natural Capital

Ecosystem Services and Valuing Natural Capital

Photo: Paul Marrow

What are ecosystem services?

Ecosystem services are the benefits that people receive from the natural environment. The Millennium Ecosystem Assessment (2001-2005) defined four categories of ecosystem services:

  • Provisioning services – such as timber production, food production
  • Regulating services – such as climate control, disease control
  • Supporting services – such as crop pollination, nutrient cycling
  • Cultural  services – such as recreation

An ‘ecosystem approach’

The ‘ecosystem approach’ to policy-making and environmental management has been defined in various ways;

In the Convention on Biological Diversity an ‘ecosystem approach’ is: “a strategy for the integrated management of land, water and living resources that promotes conservation and sustainable use in an equitable way.”

Similarly, the UK Department for the Environment, Food and Rural Affairs 2011 White Paper ‘The Natural Choice: Securing the Value of Nature’ promotes an ‘ecosystems approach’ based on:

  • Re-connecting people with the natural environment
  • Working together across boundaries to improve the environment
  • Reflecting the value of ecosystem services in decision-making
  • Respecting environmental limits, in sustainable development, and taking ecosystem functioning into account
  • Making decisions at an appropriate spatial scale
  • Showing leadership on environmental issues in Europe and worldwide

Natural Capital

Natural capital refers to both the living (e.g. fish stocks, forests) and non-living (e.g. minerals, energy resources) aspects of nature which produce value to people, both directly and indirectly. It is this capital that underpins all other capital in our economy and society.

Natural capital can often be confused with ecosystem services. However, whilst similar concepts, they are fundamentally different. Natural capital refers to the actual stock (living and non-living parts) that provides value whereas ecosystem services refer to the flow of benefits that this stock provides. Essentially, natural capital is about nature’s assets, whilst ecosystem services relate to the goods and services derived from those assets.

The UK National Ecosystem Assessment (2011) estimated that the economic value of ecosystem services, and the organisms and habitats providing them, amounts to billions of pounds in the UK alone.

There is an increasing movement towards ensuring that nature is considered in economic decision making as traditionally this hasn’t been the case. By valuing nature’s assets the natural environment can be given a more equal footing with financial, manufactured, human and social capitals and help to ensure that the true cost of environmental degradation is not ignored.

The development of suitable measures for this will require significant input from ecological science to ensure the many values we derive from nature are fully and fairly represented.

The BES is part of the Natural Capital Initiative, of which more information can be found here.

Find out more about ecosystem services and valuing natural capital on the blog:

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