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Towards defining and accounting for ecosystem services. Spencer Banzhaf. James Boyd. Senior Fellow/Director – Resources for the Future Ph.D. University of Pennsylvania Ecosystem Services, Ecological Benefit Assessment. Professor – Dept of Economics at Georgia State University - PowerPoint PPT Presentation
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Towards defining and accounting for ecosystem services
James Boyd Spencer Banzhaf
Professor – Dept of Economics at Georgia State University
Ph.D. Duke University
Environmental Economics
Senior Fellow/Director – Resources for the Future
Ph.D. University of Pennsylvania
Ecosystem Services, Ecological Benefit Assessment
Ecosystem Services are the benefits of nature to households
Woodland Trust 2014
Problem Statement: “The development and acceptance of welfare accounting and environmental assessment are hobbled by lack of standardized ecosystem units.”
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Green GDP vs. ESI (Ecological Services Index)
GDP is the market value of all officially recognized final goods and services produced within a country in a year.
“Green GDP” = GDP + non-market ecosystem values
ESI is the market and non-market ecosystem service values
Public policy demand for standardized units of ecosystem measurement
Club Good
Common PoolPrivate Good
Non-excludable
Public Good
Rival
Non-rival
Excludable
Final Ecosystem Services: components of nature, directly enjoyed, consumed, or used to yield human well-being
(Definable Unit)Ecosystem Service
Quantity Value or Price
** Key assumption: social policy goal is to maximize human well being
A = A(M,N)A = commodityM = marketed goodN = Non-market Ecological input
Production Theory Perspectives
The value can be derived from the input’s productivity times the value of the final commodity:
PN = (∂A/∂N)PA
Non-market input’s value can be derived from the value of the market input and the substitutability of the market and non-market inputs:
PN = (∂A/∂N)/(∂A/∂M)*PM
3 definitions of the measure of non-market service are referenced:
• dN (the change in non-market input)• (dA/dN)dN (change in the final commodity)• pNdN (the shadow value of the change)
Inventory of services
Critiques
• TFP on the market goods side- is there an equivalent on the non-market goods side?
• Services vs. goods; pg 620 capital stock as a proxy?
• Based on human well-being rather than the intrinsic values of ecosystem integrity
• Does this fully motivate society to protect the necessary components of the ecosystem?
Measurement should be focused on the flow of final current services as well as capital depreciation
• q = quantity• p = price
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