Putting a Price on Ecosystem Services

There has been a lot of recent media coverage of the wide range of environmental factors that affect human health, including the urgent need to bring air pollution down to within legal limits and the effect of exposure to urban environments on mental health. The common thread to these stories is the way in which we use ecosystem services i.e. services provided by the natural environment, many of which we take for granted without noticing the benefits that we enjoy from them.

It is easy to see the environment’s ‘output’ when, for example we look at the production of food, clean water or the enjoyment we receive from being out of doors. Many services from which we benefit are, however, much more subtle and indirect, such as pollination of crops, prevention of soil erosion and flood prevention.

Ecosystem services can be categorised into broad categories:

  • Provisioning e.g. the production of food and water
  • Regulating e.g. control of climate and disease
  • Supporting e.g. crop pollination
  • Cultural e.g. recreational and health benefits

Can we really put a price on services obtained from the environment?

It can be dangerous to even attempt to put a monetary value on ecosystem services. In many cases it is simply impossible to quantify the benefit we derive from our natural landscape. Many environmentalists therefore reject the economic valuation of nature because they consider that it risks ecosystems being valued at their most basic level, in essence, what can be extracted and marketed.  This leads to unsustainable land use and short term management, and poses an interesting dilemma to the application of economic theory to the value of ecosystem services.  Basic economic principles show that under-pricing a resource (the environment) leads to over exploitation of finite resources, hastens loss and pushes up cost.

The value of ‘knowns’ and ‘unknowns’

It’s easy enough to monitor economic costs when the resource is known and its management understood.  It becomes more complex when the resource isn’t obvious or recognised.

The ecosystem service provided by vultures in India was unknown until it was lost.  With the introduction of veterinary diclofenac, an anti-inflammatory treatment for livestock, in the 1990’s, vulture numbers crashed. It was later found that if a vulture fed on a carcass of an animal which had been recently treated with diclofenac, it would die of kidney failure. Despite diclofenac now being banned in India and surrounding countries, the nine species of vultures found in the region are in danger of extinction. While this is a disaster from a conservation viewpoint, it has also led to significant unintended consequences. The removal of vultures from the food chain has increased the numbers of other scavengers, including feral dogs. Feral dogs don’t pick carcasses clean the way a vulture would, which leads to ground water contamination, and the increase in dog numbers has increased the incidence of rabies. India now has a rabies epidemic, with the highest rate of human rabies in the world, resulting in about 35,000 deaths per year. It is estimated that the decline of vultures costs India some £18 billion per year, almost all of which can be attributed to the loss of the biodiversity services that the vultures were performing before their population crash.

The front garden – managing flood risk, air quality & mental health

There are many such examples, some much closer to home – even in our own gardens. The trend for paving over front garden space to allow for car parking continues to grow and, in London alone, there have been nearly 120,000 applications to drop the curb outside houses in the last five years, indicating a change in use from garden to car parking space (Royal Horticultural Society (RHS), Gardening Matters – Front Gardens). This figure does not take into account where the curb has been illegally dropped or a ramp installed.

Gardens soak up rain, while paving, tarmac and concrete are less porous and can increase rainwater run off by as much as 50%. The ecological flood management service provided by front gardens is being lost by incremental conversion of green to hard surfaces, at the same time as flooding is increasingly a major problem in both built up areas and the open countryside.

Trees and domestic gardens also help to regulate urban temperature, and promote positive mental and physical health (see Landmark blog “Branching out – the future for street trees”). Hard surfaces such as tarmac and stone will absorb heat during the day then release it at night, which contributes to the ‘heat island effect’ on localised weather conditions, and prompts us to turn up air conditioning, adding to poor air quality and CO2 emissions. Heat-related stress accounts for about 1,100 premature deaths a year in the UK (Doick, K. & Hutchings, T. (2013) ‘Air temperature regulation by urban trees and green infrastructure’).

Would any of these effects be taken into account by a home owner who needs additional parking space? Unlikely, given that the ecosystem services provided by front gardens are discrete benefits, hard to see on a small scale and, taken alone, appear unlikely to be overly damaging.

The cumulative effect

If we lose ecosystem benefits in a small localised way it is bad enough.  If we lose them on a larger scale the cumulative effect becomes much more severe, at a city scale potentially contributing to significant environmental and economic costs.

Small localised plots contribute to the larger picture of how the ecosystem joins up across the landscape. Habitat fragmentation is a major issue to many UK species, and a cause of decline in others.  Ecosystem benefits follow the same pattern. Individually they provide important benefits.  As a larger network, they deliver essential ones.


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