Conservation and Economics: Why should we love Ecosystem Services?

I have always been passionate about nature and its wonders. I am therefore extremely concerned about the destruction that we humans are causing, as it does not only compromise our future, but the one of all the other species with whom we share this -one and only- planet. I just cannot stand the idea that our selfishness and blindness is a death sentence for many of the marvels of this world.

I studied Economics as undergrad because I understood that economic incentives are one of the primary causes of nature depletion. However, while I was studying, it seemed difficult for me to find a concrete link between economics and conservation. This was until I discovered the concept of ecosystem services (ES), which gives an opportunity to merge the two fields and get answers that can be useful for both. In other words, win-wins everywhere! (This is however not exempt of polemics as I will explain).

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Food. An example of a Povisionning ecosystem services. Photo source: unsplash.com.

To give a general idea, ecosystem services can be understood as all the goods and services that nature provides, and that enhance humans’ wellbeing. These can be goods from which we get a direct benefit (for example the fruits we eat or the timber we use for heating), or services that give us indirect benefits (like the pollination that transform flowers into fruits; or nutrient regulation, which is essential for woods to grow). It can also be something less concrete, for example the inspiration we get when we look at a beautiful landscape, or the good times we experience when we spend our holidays at the beach. To make this idea clearer, the Millennium Ecosystem Assessment (2005) divided the ecosystem services in five categories, relating each one to the different components of human wellbeing. The five categories are: Provision, Regulation, Support and Cultural ES.

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The Millenium Ecosystem Assessment’s framework on ecosystems services and human wellbeing. Source: Millenium Ecosystem Assessment: Ecosystems and Human Wellbeing 2005.

Why is this approach interesting, and why has it a strong relation with economics? First of all, it is interesting because it directly relates nature with our lives as human beings. It makes visible that we need nature for our everyday lives, for everything we eat, and do, and enjoy. We need to preserve nature not because we are sentimental “tree huggers”, but because without it we would not have any kind of production, nor protection, nor wellbeing, (nor life, in a more general sense). Therefore, it gives nature conservation a political an economical urgency that other approaches do not. Second of all, economics is integrated in this approach not only in the conceptual formulation, but also because one of the ways in which this approach is used is by valuating ecosystem services. This means that we assign a monetary value to those goods and services that nature provides. This is used to make them visible in market transactions and also to have stronger arguments to discuss decision making in the same language that decision makers like to use: money.  This is, as you may already have noticed, directly related to economics, and perhaps also a little bit (or very) disturbing.

blog-foto-abejaPollination. An example of a Regulating ecosystem services. Photo source:  unsplash.com.

But it is very useful. Normally, we take many of these ecosystem services for granted, and therefore we do not take them into account in our day to day decisions. For example, when someone clears a forest to plant crops, most likely his decision making will be based solely on the market value of the timber he can extract, the market value of the crops he will be able to produce, and the market value of the land, while the value of the services the forest was providing -soil retention, water purification, CO2 retention, etcetera, etcetera- will not be considered because they are invisible to the markets. This leads him to take the ‘wrong’ decision in terms of the social benefits of land use. Maybe if he had known those values, he would have reconsidered his decision of clearing the forest. Or if the government had taken those values into consideration, it would have conserved the forest as a reserve, instead of giving the rights of use to private landowners. This is the role of the valuation of ecosystem services: to make visible to decision-makers some of the values that ecosystems provide and that are not normally considered in the transactions leading to suboptimal social outcomes. The idea is not at all – as some people think- to put a price on ecosystems to be able to ‘sell them’.

[If you want to know more about ES valuation you can go to TEEB initiative or watch the TED talk by Pavan Sukhdev at the end of this post].

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Nutrient cycling. An example of a Supporting ecosystem service. Photo by Anton Atanasov.

This is, from my perspective, a win-win situation. Conservationists are winning because they have a tool that permits them to discuss with politicians, entrepreneurs and decision-makers in their own language, appealing to those people’s interests while they conserve nature (which is perhaps more realistic that appealing to their ´feelings´ or to their sense of social justice[1].). Economists, entrepreneurs, politicians and decision makers are also winning because they can understand what the problems are, act accordingly, and make good decisions that will also benefit them in the long-term. This has been used in many countries, for example to show politicians the contribution of protected areas to the national economy,to increase (or at least not decrease) their budgets. A study made in Chile calculated that the national system of protected areas contributed to the national economy with more than US$ 2.550.000.000 per year which is equivalent to aprox. US$ 1400 per hectare of protected area per year. (The national budget for protected areas in the country was at that time equivalent to US$ 0,5 per hectare per year). After the study was released, and with consideration to the results presented, Chilean government decided to restructure the protected areas network, and make larger investments to maintain it.

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Turism. An example of a Cultural ecosystem service. Photo source: pixabay.com.

Even if the approach is anthropocentric, utilitarian and perfectible, it is useful and has a potential high impact. It allows scientists, environmentalists and conservationists to speak the same language as politicians, entrepreneurs and other decision-makers, and make them understand the importance and urgency of nature protection. I am convinced that the ability to merge different disciplines and to think across intellectual boundaries is what will help us find new and innovative solutions to these kind of urgent problems. We might not be totally convinced by the ideological framework of this approach, but nature conservation is a race against time, and this approach can lead to real, concrete actions towards conservation.

[1] I think this point gets really relevant when we consider last week’s results on American elections. Ecosystem services valuation can give a clue on how to address environmental issues and give incentives towards conservation when the decision-makers are not willing to consider these problems in their political agendas.

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