Estimating the value of depleting the Earth’s natural capital

Services provided by ecosystems that are worth up to USD 20.2 trillion per year have been lost since 1997. These estimates are conservative, say Robert Costanza and colleagues

 

 

Ecosystems provide a range of services that are of fundamental importance to human wellbeing, health, livelihoods and, indeed, survival. In 1997, the value of these services was estimated to be around USD 33 trillion per year, a figure substantially larger than global gross domestic product at the time.

Using the same methods as in 1997 but with new data, Dr Robert Costanza of the Australian National University and colleagues have estimated that the value of nature’s services to humanity in 2011 was USD 125 trillion per year with land use change, but would have been as much as USD 145 trillion per year if land use had not changed

From these two figures they were able to estimate that the value of the loss of ecosystem services owing to land-use changes from 1997 to 2011 was USD 20 trillion per year.

Woodchip pile, Ha Tinh province, Viet Nam

Woodchip pile, Ha Tinh province, Viet Nam. Photo: World Agroforestry Centre/Robert Finlayson

According to Dr Costanza, these kinds of figures are useful for highlighting the sheer size and value of the services provided by nature. However, he makes the point that valuing nature’s services in monetary units is not the same as commodifying or privatizing them.

‘Many ecosystem services are best considered as public goods or common pool resources’, he said. ‘Conventional markets are often not the best sort of institution to manage them. However, these services must be, and are being, valued. And we need new, common-asset institutions to better take these values into account’.

In this new study, Dr Costanza and team argue in Global Environmental Change that a better understanding of the role of ecosystem services emphasizes our natural assets as critical components of inclusive wealth, wellbeing and sustainability.

‘Sustaining and enhancing human wellbeing requires a balance of all of our assets: individuals, societies, the built economy and ecosystems’, they write. ‘This reframing of the way we look at “nature” is essential to solving the problem of how to build a sustainable and desirable future for humanity”.

map, ecosystem services, global, 2011, annual, cost, flow, value

Map of global annual ecosystem services based on 2011 land areas and unit values

A corresponding development of the concept of valuation of nature has been that of rewards, or payments, for providing ecosystem services.

A ten-year-long series of linked projects supported by the International Fund for Agricultural Development that operated under the rubric Rewarding Upland Poor for Environmental Services (RUPES) has its latest manifestation in a project taking place in Indonesia, the Philippines and Viet Nam.

Climate-smart, Tree-based, Co-investment in Mitigation and Adaptation in Asia (aka Smart Tree-Invest) is building business cases with poor farmers who manage their upland farms sustainably. The cases will be presented to potential co-investors, such as government agencies, hydropower companies and carbon buyers, who have an interest in maintaining the services provided by the ecosystems managed by the farmers.

‘Climate-smart, tree-based agriculture has the ability to maintain the environment’s capacity to provide services and intensify production, which can be seen, for example, as a value-adding process for degraded agricultural landscapes’, said Dr Beria Leimona, the project’s director and a global leader of research into ecosystem services.

‘Climate-smart systems typically see a diverse range of tree species grown within agricultural landscapes, which provide an important harbour of plant and animal biodiversity, connect forest fragments, and help maintain healthy watersheds by buffering variations in rainfall. These are valuable things for governments, private companies and local communities who all benefit from the services provided by well-functioning ecosystems’.

Dr Meine van Noordwijk, Chief Science Advisor at the World Agroforestry Centre and global leader of the CGIAR Research Program on Forests, Trees and Agroforestry’s component on Landscape Management of Forested Areas for Environmental Services, Biodiversity Conservation and Livelihoods added that, ‘The first-generation of “green” accounting methods applied in the case of Indonesia suggest that only 10% of the economic growth is based on resource depletion and a further 10% on resource degradation. With those numbers the politicians will ignore the issue.

‘A new study currently undertaken on Indonesia’s forests by The Economics of Ecosystems and Biodiversity is likely to show much bigger negative effects not only at the national scale but especially at the bottom of the wealth pyramid. Yet, the logical follow-on to such valuation studies is not a simple “payment” system. “Co-investment” implies the exchange of types of capital other than the purely financial kind, such as social and human capital. They seek a balance in which both nature and humans co-benefit’.

 

Read the journal articles

Costanza R, de Groot R, Sutton P, van der Ploeg S, Anderson SJ, Kubiszewski I, Farber S, Kerry R, Turner K. 2014. Changes in the global value of ecosystem services. Global Environmental Change 26(2014):152–158.

Costanza R, dArge R, de Groot R, Farber S, Grasso M, Hannon B, Limburg K, Naeem S, Oneill RV, Paruelo J, RaskinRG, Sutton P, van den Belt M. 1997. The value of the world’s ecosystem services and natural capital. Nature 387:253–260.

 

 

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This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry’s component on Landscape Management of Forested Areas for Environmental Services, Biodiversity Conservation and Livelihoods.

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Rob Finlayson

Rob Finlayson

Robert Finlayson is the Southeast Asia program's regional communications specialist. As well as writing stories for the Centre's website, he devises and supervises strategies for projects and the countries in the Southeast Asia region, including scripting and producing videos, supervising editors and translators and also assisting with resource mobilization.

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