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You are here: Home Discuss Session 5 – 10.11.2010 The environmental services that flow from natural capital (Speaker: Steve Carpenter) Topic 1: Flows of Ecosystem Services. Can we characterize/quantify the links from the biophysical world to provision of ecosystem services and can we characterize/quantify how ecosystem services contribute to human wellbeing?

Topic 1: Flows of Ecosystem Services. Can we characterize/quantify the links from the biophysical world to provision of ecosystem services and can we characterize/quantify how ecosystem services contribute to human wellbeing?

Up to Session 5 – 10.11.2010 The environmental services that flow from natural capital (Speaker: Steve Carpenter)

Topic 1:

Posted by support at October 01. 2010

Re: Topic 1:

Posted by tschenk at October 14. 2010

I personally think that there are many problems with quantifying ecosystem services and subsequently placing their management in the realm of economics. Economic theory is prefaced on a variety of assumptions - including perfect information, perfect competition, rational choice and substitutability - that, if they ever do hold in the 'real world', are quite tenuous in the context of ecosystem services.

Focusing on substitutability, the assumption is that each consumer has a 'marginal rate of substitution', which is the rate at which they will take one good or service in exchange for another while deriving the same level of utility. In the context of ecosystem services, one of the corollary assumptions is that natural resources (e.g. fresh water) will have a higher price if we account for the ecosystem services the resource (watershed in this case) provides as this is essentially increasing demand by adding another 'competitor' into the mix, motivating users to substitute and reduce or eliminate their water usage, or find an alternative to the ecosystem service itself. In the end, if an ecosystem service is really important it will be maintained when the price of 'substituting it away' becomes too high, or an alternative to the ecosystem service itself will be found.

There are a variety of challenges associated with this monetization of ecosystem services, including how to price them appropriately and insert them into markets. One of the most significant, however, is the important question of whether or not all ecosystem services are truly substitutable. Water treatment plants, desalinization, HVAC systems and a variety of other technologies arguably serve this role as we compromise the ecosystems that have traditionally provided essential goods and services like clean water and air. But are they perfect substitutes? Some assert that they are - that human progress is nothing but impressive in its ability to maintain a certain quality of life for most of the world's large population. Others counter that these technologies are nothing but bandaids delaying an inevitable collapse. The jury is arguably out, but one thing that frightens me is the possibility that we are burning through the (often non-renewable) alternatives that sit behind these technological substitutes at ever increasing rates. Desalinization is, for example, only a viable substitution as long as we have plentiful energy to power the plants. The wheel of technological evolution has arguably more-or-less kept up with our need to substitute thus far, but can it indefinitely? The risk for our species is that we will have a vastly inadequate natural capital and ecosystem services base to fall back on if that wheel stops.

I have focused on the issue of substitutability, and whether or not we can and should depend upon the alternatives that naturally enter the equation when we talk about ecosystem services and natural capital as interchangeable goods and services. There are, of course, other important issues around such things as inter and intra-generational equity. If we put these goods and services in a market, does that mean that those with the fewest resources have less say? How do we discount the future and what are the implications of assuming that it will take care of itself (i.e. that wheel will keep spinning)?

Despite how pessimistic I sound, I actually do think that attempts to quantify ecosystem services and natural capital are quite valuable. As the chapter asserts, they at least help us to explicitly identify these services and start to understand how different users value them. I guess I would just assert that we should be humble and provisional in any attempts to explicitly quantify their value, treating this data as one piece of the puzzle in parallel with other pieces like scientific and local knowledge on services and thus arguments around the need to protect them regardless of the cost.

 

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