ECOSYSTEM SERVICES, CONCEPT OF

Gretchen Daily* and Shamik Dasgupta† *Stanford University and †University College London

I. Overview I. OVERVIEW II. History III. Biophysical Characterization Human societies derive many benefits from natural eco- IV. The Ecosystem Services Framework systems. These include the production of a diversity of V. Safeguarding ecosystem goods, or extractive benefits, such as seafood, VI. Conclusions timber, biomass fuels, and precursors to many indus- trial and pharmaceutical products. The harvest and trade of these goods represent an important and familiar part of the economy. Ecosystem services also include GLOSSARY non-extractive benefits—fundamental life-support pro- cesses including pollination, water purification, renewal ecosystem services The wide array of conditions and of fertility, and climate regulation. Ecosystem ser- processes through which ecosystems, and their bio- vices include life-fulfilling functions, encompassing aes- diversity, confer benefits on humanity; these include thetic beauty and the cultural, intellectual, and spiritual the production of goods, life-support functions, life- values derived from nature. Finally, preservation of the fulfilling conditions, and preservation of options. option to use these (or new) services in the future is marginal value Economic value of the next incremen- also an important service in itself. tal unit of something. In this context, marginal values One way to appreciate the nature and value of ecosys- are those associated with managing the next small tem services is to imagine trying to set up a happy unit of an ecosystem in a particular way (e.g., pre- existence on the moon. Assume for the sake of argument serving, rather than clearing, the next unit of forest). that the moon miraculously already had some of the basic conditions for supporting human life, such as an atmosphere and climate similar to those on . After packing one’s prized possessions, the big question ECOSYSTEM SERVICES ARE ESSENTIAL TO HUMAN would be, Which of Earth’s millions of species would EXISTENCE, and yet their supply is seriously threat- be required to sustain the lunar colony? ened by the intensification of human impacts on the Tackling the problem systematically, one could first environment. This article provides an overview of issues choose from among all the species exploited directly for concerning the identification, biophysical and eco- food, drink, spice, fiber and timber, pharmaceuticals, nomic characterization, and safeguarding of ecosys- industrial products (such as waxes, lac, rubber, and tem services. oils), and so on. Even being selective, this list could

Encyclopedia of , Volume 2 Copyright  2001 by Academic Press. All rights of reproduction in any form reserved. 353 354 ECOSYSTEM SERVICES, CONCEPT OF amount to hundreds, or even several thousand, species. TABLE I The space-ship would be filling up before even begin- A Classification of Ecosystem Services with Illustrative Examples ning to add the species crucial to supporting those at the top of one’s list. Which are these unsung heroes? Production of Goods No one knows which—nor even approximately how Food Terrestrial animal and plant products many—species are required to sustain human life. This Forage means that rather than listing species directly, you Seafood would have to list instead the life-support functions Spices required by your lunar colony; then you could guess Pharmaceuticals at the types and numbers of species required to perform Medicinal products each. At a bare minimum, other companions on the Precursors to synthetic pharmaceuticals spaceship would have to include species capable of Durable materials Natural fiber supplying a whole suite of ecosystem services that Timber Earthlings take for granted. Table I provides a classifi- Energy cation of important ecosystem services. Biomass fuels Armed with this preliminary list of services, one Low-sediment water for hydropower could begin to determine which types and numbers of Industrial products species are required to perform each. This is no simple Waxes, oils, fragrances, dyes, latex, rubber, etc. task. Consider soil fertility. Soil organisms play impor- Precursors to many synthetic products tant and often unique roles in the circulation of matter Genetic resources Which enhance the production of many of these goods in every ecosystem on Earth; they are crucial to the chemical conversion and physical transfer of essential Regeneration Processes nutrients to higher plants, and all larger organisms, Cycling and filtration processes including humans, depend on them. The abundance of Detoxification and decomposition of wastes Generation and renewal of soil fertility soil organisms is tremendous: under a square yard of Purification of air pasture in Denmark, for instance, the soil was found Purification of water to be inhabited by roughly 50,000 small earthworms Translocation processes and their relatives, 50,000 insects and mites, and nearly Dispersal of seeds necessary for revegetation 12 million roundworms. And that is not all. A single Pollination of crops and natural vegetation gram (a pinch) of soil has yielded an estimated 30,000 Stabilizing Processes protozoa, 50,000 algae, 400,000 fungi, and billions of Coastal and river channel stability Compensation of one species for another under varying individual bacteria (Overgaard-Nielsen, 1955). Which conditions to bring to the moon? Most of these species have never Control of the majority of potential pest species been subjected to even cursory inspection. Yet the so- Moderation of weather extremes (such as of temperature and bering fact of the matter is, as Ed Wilson put it: they wind) don’t need us, but we need them. Partial stabilization of climate Regulation of hydrological cycles (mitigation of floods and In the early 1990s, the first 2 ‘‘mission’’ droughts) carried out this thought experiment to the greatest de- Life-Fulfilling Functions gree possible on Earth. Eight people were enclosed in Aesthetic beauty a 3.15-acre closed ecosystem, featuring agricultural land Cultural, intellectual, and spiritual inspiration plus a wide array of natural habitats (desert, savanna, Existence value tropical forest, wetland, and even a miniature ocean). Scientific discovery The aim was to demonstrate a (mostly) closed system Serenity that could supply people with their material needs for Preservation of Options two years. Yet in spite of an investment of over $200 Maintenance of the ecological components and systems needed million in the design, construction, and operation of for future supply of these goods and services and others this model Earth (including $1 million in annual energy awaiting discovery inputs), it proved impossible to do so and the experi- ment was shut down early in failure. Numerous un- pleasant and unexpected problems arose, including a fall in atmospheric oxygen concentration to 14% (the level normally found at an elevation of 17,500 feet); ECOSYSTEM SERVICES, CONCEPT OF 355 high spikes in carbon dioxide concentrations; nitrous these cycles without causing global disruption. Yet be- oxide concentrations high enough to impair brain func- cause most of these benefits are not traded in markets, tion; rapid species extinctions (including 19 of 25 verte- they carry no price tags that could alert society to brate species and all pollinators, thereby dooming most changes in their supply or to deterioration of the under- of the plant species to eventual extinction as well); lying ecological systems that generate them. Escalating overgrowth of aggressive vines and algal mats; and, impacts of human activities on forests, wetlands, and to top it all off, population explosions of crazy ants, other natural ecosystems imperil the delivery of ecosys- cockroaches, and katydids. Even heroic personal efforts tem services. The primary threats are land use changes on the part of the Biospherians did not suffice to make that cause losses in biodiversity as well as disruption the system viable and sustainable for humans nor many of carbon, nitrogen, and other biogeochemical cycles; nonhuman species, illustrating the tremendous expense human-caused invasions of exotic species; releases of and difficulty of replicating many basic ecosystem ser- toxic substances; possible rapid climate change; and vices (Cohen and Tilman, 1996). depletion of stratospheric ozone. Because threats to Ecosystem services are generated by a complex of these systems are increasing, there is a critical need natural cycles, driven by solar energy, that constitute for identification and monitoring of ecosystem services the workings of the biosphere—the thin layer near both locally and globally, and for the incorporation of Earth’s surface that contains all known life. The cycles their value into decision-making processes. operate on very different scales. Biogeochemical cycles, Based on available scientific evidence, it is certain such as the movement of the element carbon through that: the living and physical environment, are truly global and reach from the top of the atmosphere to deep into • Ecosystem services are essential to civilization. and ocean-bottom sediments. Life cycles of bacte- • Ecosystem services operate on such a grand scale ria, in contrast, may be completed in an area much and in such intricate and little-explored ways that smaller than the period at the end of this sentence. The most could not be replaced by technology. cycles also operate at very different rates. The biogeo- • Human activities are already impairing the flow of chemical cycling of carbon, for instance, occurs at a ecosystem services on a large scale. rate that is orders of magnitude faster than that of • If current trends continue, humanity will dramati- phosphorus, just as the life cycles of microorganisms cally alter virtually all of Earth’s remaining natural may be many orders of magnitude faster than those ecosystems within a few decades. of trees. All of these cycles are ancient, the product of billions of years of evolution, and have existed in forms very In addressing these points in more detail, we shall similar to those seen today for at least hundreds of first consider briefly the history of concern for ecosys- millions of years. They are absolutely pervasive, but tem services. Then we shall explore the functioning of a unnoticed by most human beings going about their small set of services in biophysical terms; the economic daily lives. Who, for example, gives a thought to the characterization of ecosystem services is discussed else- part of the carbon cycle that connects him or her to where in the Encyclopedia. Finally, we will examine the plants in the garden outside, to plankton in the the utility of the Ecosystem Services Framework, in Indian Ocean, or to Julius Caesar? Noticed or not, hu- the abstract and then in operation, reviewing recent man beings depend utterly on the continuation of natu- developments in the safeguarding of ecosystem services. ral cycles for their very existence. If the life cycles of predators that naturally control most potential pests of crops were interrupted, it is unlikely that pesticides II. HISTORY could satisfactorily take their place. If the life cycles of pollinators of plants of economic importance ceased, Interestingly, the nature and value of Earth’s life-sup- society would face serious social and economic conse- port systems have been illuminated primarily through quences. If the carbon cycle were badly disrupted, rapid their disruption and loss. Thus, for instance, deforesta- climatic change could threaten the existence of civiliza- tion has demonstrated the critical role of forests in the tion. In general, human beings lack both the knowledge hydrological cycle—in particular, in mitigating floods, and the ability to substitute for the functions performed droughts, the erosive forces of wind and rain, and silting by these and other cycles. of dams and irrigation canals. Release of toxic sub- For millennia, humanity has drawn benefits from stances, whether accidental or deliberate, has revealed 356 ECOSYSTEM SERVICES, CONCEPT OF the nature and value of physical and chemical processes, by the fervors of summer, and seared by the rigors of governed in part by a diversity of microorganisms, that winter. Bleak winds sweep unresisted over its surface, disperse and break down hazardous materials. Thinning drift away the snow that sheltered it from the frost, and of the stratospheric ozone layer sharpened awareness dry up its scanty moisture’’ (p. 186). Finally, he even of the value of its service in screening out harmful wrote of decomposition services: ‘‘The carnivorous, and ultraviolet radiation. often the herbivorous insects render an important ser- A cognizance of ecosystem services, expressed in vice to man by consuming dead and decaying animal terms of their loss, dates back at least to Plato around and vegetable matter, the decomposition of which 400 B.C. and probably much earlier: would otherwise fill the air with effluvia noxious to health’’ (p. 95). What now remains of the formerly rich land is Following World War II, other eloquent writers on like the skeleton of a sick man with all the fat the environment emerged, including Fairfield Osborn and soft earth having wasted away and only the (Our Plundered Planet, 1948), William Vogt (Road to bare framework remaining. Formerly, many of Survival, 1948), and Aldo Leopold (A Sand County Al- the mountains were arable. The plains that were manac and Sketches from Here and There, 1949). Each full of rich soil are now marshes. Hills that were discusses ecosystem services without using the term once covered with forests and produced abundant explicitly. In (1968), Paul Ehrlich pasture now produce only food for bees. Once describes anthropogenic disruption of ecosystems and the land was enriched by yearly rains, which were the societal consequences of doing so, addressing the not lost, as they are now, by flowing from the need to maintain important aspects of ecosystem func- bare land into the sea. The soil was deep, it ab- tioning. Along these lines, the Study of Critical Environ- sorbed and kept the water . . . , and the water mental Problems (1970) presents a list of key ‘‘environ- that soaked into the hills fed springs and running mental services’’ that would decline with a decline in streams everywhere. Now the abandoned shrines ‘‘ecosystem function,’’ including many in Table I. This at spots where formerly there were springs attest list was expanded upon by Holdren and Ehrlich (1974). that our description of the land is true. By the early 1980s, efforts were initiated to investigate —PLATO two questions: the extent to which ecosystem function (and the delivery of services) depends on biodiversity, (Quoted in Daily, G. C. 1997. Nature’s Services,p.6.) and the extent to which technological substitutes could replace ecosystem services. The first question is ad- Mooney and Ehrlich (1997) trace modern concern dressed elsewhere in this Encyclopedia, and the second for ecosystem services to George Perkins Marsh, a law- question was tackled by Ehrlich and Mooney (1983). yer, politician, and scholar. Indeed, his 1864 book Man Work on these topics proliferated and, in 1997, a collec- and Nature describes a wide array of services, again, tive effort was made to synthesize the wealth of scientific often expressed in terms of their loss. Remarking on information that had accumulated on the functioning the terrain of the former Roman Empire, he notes that of ecosystem services, with a preliminary exploration it ‘‘is either deserted by civilized man and surrendered of their economic value, and of key issues meriting to hopeless desolation, or at least greatly reduced in further work (Daily, 1997). both productiveness and population’’ (p. 9). He goes on to describe the reduction of hydrological services: ‘‘Vast forests have disappeared from mountain spurs III. BIOPHYSICAL CHARACTERIZATION and ridges, the vegetable earth . . . [is] washed away; meadows, once fertilized by irrigation, are waste and Food production is arguably humanity’s most essential unproductive, because . . . the springs that fed them activity. It is also the most important proximate cause dried up; rivers famous in history and song have shrunk of biodiversity loss worldwide, involving major direct to humble brooklets’’ (p. 9). Marsh also made connec- and indirect impacts, including: (i) conversion of natu- tions between deforestation and climate: ‘‘With the dis- ral habitat to agricultural use, (ii) facilitation of biotic appearance of the forest, all is changed. At one season, invasion through habitat alteration and trade, and (iii) the earth parts with its warmth by radiation to an open application of chemical fertilizers and pesticides. Global sky—receives, at another, an immoderate heat from demand for food is expected to double over the period the unobstructed rays of the sun. Hence the climate 1990–2030. In Asia and Africa, food needs are projected becomes excessive, and the soil is alternately parched to increase by a factor of 2.3 and 5, respectively, with ECOSYSTEM SERVICES, CONCEPT OF 357 a sevenfold increase or more in some countries. It is bonate shell, increasing productivity would remove car- difficult to forecast how these needs will be met. What- bon dioxide from the oceans (and the atmosphere), ever course is taken, it is reasonable to expect that further cooling the planet. Warming trends may also growing human pressures will continue to alter ecosys- be enhanced by life, such as through the stimulation tems, probably very dramatically. of decomposition rates of dead organic matter, which

At the same time, food production is highly depen- may release CO2 to the atmosphere. The relative influ- dent on ecosystem services. In what ways? Let us con- ence of stabilizing and destabilizing feedbacks remains sider four types of services that are key to agriculture: uncertain; what is clear is that climate and natural eco- climate stability, services supplied by soil, pollination, systems are tightly coupled, and maintaining the stabil- and pest control. In each case, an overview of the func- ity of that coupled system is an important ecosystem tioning of the service will be given, along with a general service. assessment of its importance. Ecosystems also help moderate regional and local weather. For instance, transpiration of plants in the morning contributes moisture to the atmosphere that A. Climate Stability then falls in thunderstorms in the afternoon, damping Earth’s climate has fluctuated tremendously since hu- both moisture loss and surface temperature rise. In manity came into being, but it has been relatively stable the Amazon, for example, 50% of the mean annual since the invention of agriculture around 10,000 years precipitation is recycled via evapotranspiration by the ago. At the peak of the last ice age 20,000 years ago, forest itself. Amazon deforestation could so dramati- for example, much of Europe and North America were cally reduce precipitation that the forest might be un- covered by mile-thick ice sheets. Even relatively re- able to reestablish itself following large-scale destruc- cently, from 1550 to 1850, Europe was significantly tion. Temperature extremes are also moderated by cooler during a period known as the Little Ice Age. forests, which provide shade and surface cooling and Many of these changes in climate are thought to be also act as insulators, blocking searing winds and trap- caused by alterations in Earth’s orbital rotation or in ping warmth by acting as a local greenhouse agent. the energy output of the sun, or by sudden perturba- tions (such as violent volcanic eruptions and asteroid impacts) or more gradual tectonic events (such as the B. Services Supplied by Soil development of the Himalayas). Remarkably, climate The ecosystem services supplied by soil are so tightly has been buffered enough through all of these changes interrelated as to make any discrete classification arbi- to sustain life for at least 3.5 billion years—although trary. We shall briefly touch on six services here: (i) climate change is thought to have induced the past buffering and moderation of the hydrological cycle; (ii) mass extinctions. Human activities now threaten to in- physical support of plants; (iii) retention and delivery duce rapid climatic change, with wide-reaching conse- of nutrients to plants; (iv) disposal of wastes and dead quences for society. organic matter; (v) renewal of soil fertility; and (vi) Climate plays a major role in the evolution and distri- regulation of major element cycles. bution of life over the planet. Most scientists would An enormous amount of water, about 119,000 km3, also agree that life itself is a principal factor in the falls annually on Earth’s land surface—enough to cover regulation of global climate, helping to dampen the the land to an average depth of 1 meter. Much of this effects of episodic perturbations through negative feed- water is soaked up by soils and is gradually meted out back mechanisms that offset climate oscillations with to plant roots and into aquifers and surface streams. changes in greenhouse gas concentrations. For instance, Without soil, rainfall would rush off the land in flash natural ecosystems may have helped to stabilize climate floods. Plant foliage, roots, and residues shield the soil by removing CO2 from the atmosphere as the sun grew from the full, destructive force of raindrops, holding it brighter over millions of years. Life may also exert a in place. Rain on denuded landscapes compacts the destabilizing (positive) feedback with climate change, surface and turns soil rapidly to mud (especially if it has particularly during interglacial–ice age transitions. One been loosened by tillage), which clogs surface cavities such mechanism is the fertilization of phytoplankton in the soil, reduces infiltration, increases runoff, and that is thought to occur when climatic cooling leads to further enhances clogging in a positive feedback. De- sea level reductions, which expose continental shelves tached soil particles are splashed downslope and carried and enhance nutrient runoff to the oceans. Since the off by running water. bulk of many phytoplankton species is a calcium car- Soil also shelters seeds and provides physical support 358 ECOSYSTEM SERVICES, CONCEPT OF as they sprout and mature into adult plants. The ener- soils dwarfs that in vegetation, for example, by factors getic costs to plants of packaging and storing seeds and of Ȃ1.8 and Ȃ18, respectively. The importance to soci- of anchoring plant roots would be enormous without ety of maintaining an approximate steady state in the soil. Human-engineered hydroponic systems grow stocks and fluxes of major elements can be most easily plants in the absence of soil and their cost provides a appreciated by considering the consequences of their lower-bound index to the value of this service. The recent disruption. Alterations in the carbon and nitro- physical support trays and stands used in such opera- gen cycles can be costly, long term, and in many cases tions amount to about U.S. $55,000 per hectare. irreversible on a time scale of interest to society. The Third, soil retains and delivers nutrients to plants. former are leading to a buildup of greenhouse gases Tiny soil particles, primarily bits of humus and clays, in the atmosphere; the latter cause acid precipitation, carry a surface electrical charge that is generally negative. eutrophication, and contamination of groundwater and This property holds positively charged nutrients (cat- surface drinking water sources by high nitrate-nitro- ions) near the surface, in proximity to plant roots, gen levels. allowing them to be taken up gradually. Otherwise, they would quickly be leached away. Soil also acts as a buffer in the application of fertilizers, holding the fertilizer ions on soil exchange sites until required by plants. C. Pollination Fourth, soil plays a paramount role in the decompo- Animal pollination is required for the successful repro- sition of dead organic matter and wastes, in the process duction of most flowering plants, including both wild rendering harmless many potential human pathogens. plants and about 70% of the agricultural crop species People generate a tremendous amount of waste, includ- that feed the world. Over 100,000 different animal spe- ing household garbage, industrial waste, crop and for- cies (including bats, bees, beetles, birds, butterflies, and estry residues, and sewage from their own populations flies) are known to provide ‘‘free’’ pollination services, and their billions of domesticated animals. A rough which maintain croplands, backyard gardens, meadows, approximation of the amount of dead organic matter forests, and rangelands. The availability of these pollina- and waste (mostly agricultural residues) processed each tors depends on the existence of a wide variety of habitat year is 130 billion metric tons, about 30% of which is types needed for their feeding, successful breeding, and associated with human activities. Fortunately, there is completion of their life cycles. a diverse array of decomposing organisms—ranging Considering the proportions in which we consume from vultures to tiny bacteria—that earn their living different crops, about one-third of human food comes by extracting energy from the large, complex organic from animal-pollinated plants. Critical grain crops, molecules found in many types of waste. such as rice and wheat, are not animal-pollinated. With- The simple inorganic chemicals that result from nat- out natural pollination services, yields of other impor- ural decomposition are eventually returned to plants tant crops would decline precipitously and many wild as nutrients. Thus the decomposition of wastes and the plant species would become extinct. In the recycling of nutrients, the fifth service, are two aspects alone, billions of dollars of crops would be lost (annu- of the same process. The fertility of soils—that is, their ally) without the services of wild, native pollinators— ability to supply nutrients to plants—is largely the re- those sustained by natural habitats adjacent to farm- sult of the activities of diverse species of bacteria, fungi, lands. Pollination by honeybees, originally imported algae, crustacea, mites, termites, springtails, millipedes, from Europe, is extremely important as well, but they and worms, all of which, as groups, play important are presently in decline, making pollinators from natu- roles. Some bacteria are responsible for ‘‘fixing’’ nitrogen ral ecosystems all the more important. Management of (a key element in proteins), drawing it out of the atmo- the honeybee in the New World is currently threatened sphere and converting it to forms usable by plants and, by the movement of, and hybridization with, the aggres- ultimately, human beings. Certain types of fungi are sive African strain of honeybee that was accidentally essential to supplying nutrients to many kinds of trees. released in Brazil in 1956. Diseases of honeybee colonies Earthworms and ants act as ‘‘mechanical blenders’’ by are also causing a marked decline in the number of breaking up and mixing plant and microbial material managed colonies. Meanwhile, the diversity of pollina- and other matter. tors available to both wild and domesticated plants is Finally, soils are a key factor in regulating Earth’s diminishing: more than 60 genera of pollinators include major element cycles (e.g., of carbon, nitrogen, and species now considered to be threatened, endangered, sulfur). The amount of carbon and nitrogen stored in or extinct. ECOSYSTEM SERVICES, CONCEPT OF 359

D. Natural Pest Control Services peting uses and users. These trade-offs are becoming increasingly vexing and difficult to resolve, from both Humanity’s competitors for food, timber, cotton, and ethical and practical perspectives. They involve our other fiber are called pests; these include numerous most important ideals (such as ensuring a prosperous herbivorous insects, rodents, fungi, snails, nematodes, future for our children), our oldest tensions (such as and viruses. These pests destroy an estimated 25% (up between individual and societal interests), and some- to as much as 50%) of crops, before and after harvest. times our bloodiest tendencies. In addition, numerous weeds compete directly with At the local level, allocation of land or water to crops for water, light, and soil nutrients, further lim- competing activities often involves a zero-sum game. iting yields. This is apparent in the widespread loss of water and Chemical pesticides, and the strategies with which land from native habitat to farms, and increasingly to they are applied, can have harmful unintended conse- urban and industrial uses. On what basis should such quences. First, resistance is now found in over 500 allocations be decided? How can individual preferences insect and mite pests, over 100 weeds, and in about for alternative allocations be aggregated fairly? How 150 plant pathogens. This means that achieving a fairly can the costs and benefits of alternative schemes be constant level of pest control requires applying higher distributed fairly? And how can the parties with the and higher doses of pesticides—or continuously devel- most at stake—future generations—be represented at oping new, more powerful chemicals to combat evolv- the bargaining table? At the international level, these ing pest defenses. Second, populations of natural pest questions are writ large. Consider efforts to allocate enemies are decimated by heavy pesticide use. Not hav- among nations permits to produce chlorofluorocar- ing the same evolutionary experience with plant chemi- bons, to harvest certain marine fish stocks, or to use cals that the pests themselves have had, and typically the global carbon dioxide sink. How these questions having much smaller population sizes (being higher on are decided will profoundly influence the willingness food chains), natural predators are often more suscepti- of nations and individual actors to make and comply ble to synthetic poisons than are the pests. Destruction with agreements. of predator populations leads to explosions of their prey The ecosystem services approach provides a concep- and the ‘‘promotion’’ of species previously not classified tual framework for helping to resolve these trade-offs. as pests to pest status. In California in the 1970s, for The framework recognizes natural ecosystems and their instance, 24 of the 25 most important agricultural pests biodiversity as capital assets that, if properly managed, had been ‘‘created’’ by the overuse of pesticides. Third, will yield a stream of life-support goods and services exposure to pesticides and herbicides may pose serious over time. Relative to physical, human, or financial health risks to humans and many other organisms; the capital, renewable (embodied in ecosys- recently discovered declines in human sperm counts tems) is poorly understood, typically undervalued, may be attributable in part to such exposure. scarcely monitored, and—in many important cases— Fortunately, an estimated 99% of potential crop pests undergoing rapid depletion. Up until now, there has are controlled by natural enemies, including many been little incentive to measure or manage natural capi- birds, spiders, parasitic wasps and flies, ladybugs, fungi, tal: it has been treated as essentially inexhaustible. viral diseases, and numerous other types of organisms. Measuring natural capital involves assessing both its These natural biological control agents save farmers stock and its importance to society. Neither is simple and society billions of dollars annually by protecting to do, but the latter is particularly difficult: valuation crops and reducing the need for chemical control. in economic or other (e.g., cultural, spiritual) terms involves resolving fundamental philosophical issues (such as the underlying bases for value), the establish- IV. THE ECOSYSTEM ment of context, and the defining of objectives and SERVICES FRAMEWORK preferences, all of which are inherently subjective. Even after doing so, one is faced with formidable technical All of these services are presently under threat. When difficulties with interpreting information about the human activities approach or exceed the environment’s world and transforming it into a quantitative measure capacity to sustain them, growth in those activities is of value. Just as the full value of a human being cannot rarely brought to an immediate halt. Rather, the people be captured in economic terms (on the basis of his or so engaged suddenly find themselves confronted with her wage-earning power, or the economic value of his a set of trade-offs in the allocation of resources to com- or her constituent materials), there exists no absolute 360 ECOSYSTEM SERVICES, CONCEPT OF value of ecosystem services waiting to be discovered and The city administration first considered replacing revealed to the world by a member of the intellectual the natural system with a filtration plant, but found community. Other entries in the Encyclopedia discuss that it would cost an estimated $6–8 billion in capital these issues and describe alternative empirical valuation plus $300 million in annual operations. These high techniques, their applicability to different types of eco- costs prompted investigation of an alternative solution, system services, and the advantages and limitations of namely, restoring and safeguarding the natural purifi- their use. cation services of the Catskills. This would involve the As a whole, ecosystem services have infinite value purchase of land in and around the watershed to protect because human life could not be sustained without it, as well as subsidizing several changes on privately them. The evaluation of the trade-offs currently facing owned land: the upgrading of sewage treatment plants, society, however, requires that we estimate the marginal the improvement of farming practices, and ‘‘environ- value of ecosystem services (the value yielded by an mentally sound’’ economic development. The total cost additional unit of the service, all else held constant) of this option was estimated at about $1.5 billion. to determine the costs of losing—or the benefits of Thus, New York City faced a choice of investing preserving—a given amount or quality of services. The $6–8 billion in physical capital or $1.5 billion in natural information needed to estimate marginal values is also capital. In spite of some political opposition, the latter difficult to obtain and is presently unavailable for many option clearly appeared to be the more attractive, so aspects of the services. Nonetheless, even imperfect the city floated an Environmental Bond Issue to fund measures of their value, if understood as such, may its implementation. This financial mechanism captures prove superior to ignoring ecosystem services alto- the important economic and public health values of a gether, as is generally done in decision making today. natural asset (the watershed) and distributes them to those assuming responsibilities for the asset and its services. V. SAFEGUARDING The Catskills supply many other valuable services, such as flood control, carbon sequestration (locking up, How can the Ecosystem Services Framework be made in forests and the soils beneath them, carbon dioxide, an operational to ensure the safeguarding of key services? important greenhouse gas), biodiversity conservation, Here success hinges on the institutional framework in and—perhaps above all—beauty, serenity, and spiritual which valuation is done and incorporated into policy. inspiration. Moreover, these services benefit others be- Valuation is not a solution in itself—it is merely one sides water consumers in New York City. It would be way of organizing information in the much larger poli- absurd to try to express the full value tics of decision making. The actual safeguarding of eco- of the Catskills in a dollar figure. In this case, fortu- system services will require the establishment (or nately, there was no reason to try: even a lower-bound strengthening) of institutions that reward such action. estimate of the value of the natural asset was sufficient Institutions must be tailored to local ecological, eco- to induce adoption of a conservation policy. nomic, and cultural circumstances and provide a payoff The challenge is to extend this model to other geo- for conservation in a relatively short and certain time graphic locations and to other services. In other places, frame to be effective (see Heal, in press). water quality is certainly a growing concern: the United The management by New York City of its drinking Nations Environment Programme reports that most dis- water quality offers a model example of how ecosystem eases in the less-developed world are caused by contam- services can be characterized (both biophysically and inated water, and that 50% of people in these countries economically), monitored, and safeguarded. The city’s suffer from one or more water-related diseases. An esti- water originates in the Catskill Mountains, about a hun- mated 10–15% of the U.S. population currently con- dred miles to the north of the city, and was once consid- sumes water from systems that violate EPA contaminant ered so pure and salubrious that it was bottled and sold standards. The EPA forecasts that communities will throughout the Northeast. In recent years, the natural have to spend $140 billion over the next 20 years to purification system of the Catskills has been over- maintain drinking water quality at minimum re- whelmed by sewage and agricultural runoff, resulting in quired standards. a reduction in water quality below minimum drinking To evaluate the potential for extending the New York standards. The United States Environmental Protection City model, Walter Reid posed this question: How much Agency (EPA) required that the city remedy this land could be protected with an economic justification, problem. using water quality as a major goal? A first-order ap- ECOSYSTEM SERVICES, CONCEPT OF 361 proximation suggests that the area would be significant: quality of services and the condition (e.g., relatively 10% of U.S. land area and 14% of global land area under pristine versus heavily modified) or areal extent of current population sizes. Reid further points out that the ecosystem supplying them? Where do critical hydroelectricity generation is another important good thresholds lie? whose supply, like that of drinking water, economically • To what extent do the services depend on biodi- justifies watershed protection in many instances. Costa versity? Rica, for example, derives 99% of its electricity from • To what extent, and over what time scale, are the hydroelectric plants; most of the water generating this services amenable to repair? electricity flows from protected areas. In 1995, Costa • How interdependent are the services? How does Rica established a small tax on water and electricity safeguarding or damaging one influence the func- use, the revenues from which are now recycled into tioning of others? managing the protected areas to limit erosion and sedi- • What indicators could be used to monitor accu- mentation and to maintain high water flows. Numerous rately and efficiently the changes in the supply or ancillary benefits accrue in this scheme, including pro- quality of ecosystem services? tection of valuable flood control, biodiversity conserva- • How effectively, and on how large a scale, can ex- tion, and ecotourism services. isting or foreseeable human technology substitute To extend this model to other places and other ser- for ecosystem services? vices, appropriate educational, financial, and legal insti- • What are the main sources of uncertainty regarding tutions, tailored to cultural and economic circum- ecosystem services, and how important are they? stances, will be required. Without these, statements How can the uncertainty best be quantified and in- from ecologists and economists that ecosystems are im- corporated into policy? portant and valuable assets will accomplish little. Prom- • How can economic principles and tools best be ising new institutions for safeguarding ecosystem ser- brought to bear on the management of natural vices have emerged in a wide array of cultures and capital? economies (e.g., Australia, Madagascar, the United • Given that many values of ecosystems lie mostly in States, Vietnam); at a variety of scales, from local to the future (and will always lie mostly in the fu- international; and among governments, nongovern- ture), how should future benefits be valued, in eco- mental organizations, and private sectors. The services nomic, cultural, or other terms? safeguarded by these emerging institutions include pol- • What financial, legal, and other social institutions lination; pest control; water supply for drinking, for are needed to safeguard critical ecosystem services? irrigation, and for hydropower generation; maintenance How can their development be catalyzed? of soil fertility; sustainable harvesting of tropical timber; provision of aesthetic beauty; and even decomposition While a great deal is known about the functioning (of orange peels produced by Del Oro, an orange juice of ecosystems and the supply of services in general, company in Costa Rica, which are carefully distributed abstract terms, there is a paucity of information on in a reserve area). particular, local ecosystems and economies. Very little is known about marginal values (the net benefit or cost associated with protecting or destroying the next unit of VI. CONCLUSIONS an ecosystem) or about the nonlinearities in ecosystem responses to human impact. Often this information is An enormous payoff could result from further research not acquired until after it is too late to reverse harm in the characterization (biophysical and economic) of done (e.g., after heavy flooding). And we still have ecosystem services and in the development of institu- relatively little experience with institutional mecha- tions for their safeguarding. A series of basic questions, nisms for safeguarding ecosystem services: these will spanning a wide array of disciplines, beg addressing in vary with the different ecological and economic charac- this area. With emphasis here on biophysical character- teristics of the services (such as whether they are public ization, they include: or private goods, the time period and spatial scale over which benefits are realized, and so on). • Which ecosystems supply what services? What is Further development of case studies addressing the scale of delivery, transport, and consumption of these issues would be most helpful. Such work would the services? define the envelope of opportunities and limitations in • What are the relationships between the quantity or applying this conceptual framework; it would illumi- 362 ECOSYSTEM SERVICES, CONCEPT OF nate how general are the findings from specific locali- Daily, G. C., Alexander, S., Ehrlich, P. R., Goulder, L. H., Lubchenco, ties; and it would serve as a guide to policy develop- J., Matson, P. A., Mooney, H. A., Postel, S., Schneider, S. H., Tilman, D., and Woodwell, G. M. (1997). Ecosystem services: ment. In the New York City case, for instance, officials Benefits supplied to human societies by natural ecosystems. Issues are purchasing land and changing agricultural and mu- in Ecology 2, 1–16. nicipal practices in the hopes of restoring the natural Daily, G. C., Soederqvist, T., Arrow, K., Dasgupta, P., Ehrlich, P., water purification services of the Catskills—all with Folke, C., Jansson, A.-M., Jansson, B.-O., Levin, S., Lubchenco, quite limited scientific information. In this particular J., Ma¨ler, K.-G., Starrett, D., Tilman, D., and Walker, B. (In re- view). The value of nature and the nature of value. case, and generally, success in the policy arena hinges Ehrlich, P. R., and Mooney, H. A. (1983). Extinction, substitution, on whether the scientific underpinnings of policies and ecosystem services. BioScience 33, 248–254. are sound. Heal, G. (In press). Nature and the Marketplace. Island Press, Washing- ton, D.C. Holdren, J. P., and Ehrlich, P. R. (1974). Human population and the See Also the Following Articles global environment. Amer. Sci. 62, 282–292. Jansson, A. M., Hammer, M., Folke, C., and Costanza, R. (eds.). BIODIVERSITY AS A COMMODITY • ECONOMIC VALUE OF (1994). Investing in Natural Capital: The Ecological Economics BIODIVERSITY, OVERVIEW • ECOSYSTEM, CONCEPT OF • Approach to . Island Press, Washington, D.C. ECOSYSTEM FUNCTION, PRINCIPLES OF • HISTORICAL Mooney, H. A., and Ehrlich, P. R. (1997). Ecosystem services: A AWARENESS OF BIODIVERSITY fragmentary history. In Nature’s Services: Societal Dependence on Natural Ecosystems (G. C. Daily, ed.), pp. 11–19. Island Press, Washington, D.C. Bibliography Overgaard-Nielsen, C. (1955). Studies on Enchytraeidae 2: Field stud- ies. Natura Jutlandica 4, 55–58. Chichilnisky, G., and Heal, G. (1998). Economic returns from the Reid, W. A. (In press). A business plan for ecosystem services: Ex- biosphere. Nature 391, 629–630. tending the New York City watershed model to other geographic Cohen, J. E., Tilman, D. (1996). Biosphere 2 and biodiversity: The regions and other ecosystem services. lessons so far. Science 274, 1150–1151. Vitousek, P. M., Mooney, H. A., Lubchenco, J., and Melillo, J. M. Daily, G. C. 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