An economist looks at ecosystem services

Abstract

This chapter lists ecosystem services and discusses what techniques can be applied in order to assess their economic value. The last five decades witnessed enormous progress in developing valuation techniques applied to non-market goods (i.e. the goods that do not have market prices). These can be broadly divided into direct and indirect techniques. The former aim at capturing them directly e.g. by asking people “how much they are willing to pay”. The latter derive values from observing prices not for the good of interest, but rather for a complementary good whose characteristics shed some light on peopleʼs relevant preferences. These techniques were successfully tested in many regions of the world, including Poland. The best known exercise of this sort is the one published by Nature in 1997, where an attempt was made to estimate the global economic value of annual ecosystem services. Numerous subsequent studies have allowed for much more accurate assessments. Consequently, researchers addressing valuation problems have an extensive accumulated research experience to rely on.