What are ecosystem services? The concept can be explained using a simple example. If you go and buy a wooden chair for 60 Euros, you’re agreeing that it is worth the 60 Euro price set both by the vendor and the market. Ecosystem services deal with nature’s services such as watershed maintenance or carbon sequestration from which the tangible products come, yet are not tangible products. So the question is: What would you be willing to pay for the natural processes that produced the wood required for said chair?
At the Global Landscapes Forum Social Reporting Boot Camp, Frank Hajek, Executive Director of Nature Services Peru, gave a talk on “Emerging Global and Local Financial Architectures for Ecosystem Services Schemes.” Nature Services tries to put an economic value to ecosystem services in order to develop environmental credits, such as carbon credits.
This sounds abstract at first, but a tree that is processed to timber cannot grow in isolation, but depends on the ecosystem it is part of. In this example, timber is the product, while the environmental factors that enabled the tree to grow is the ecosystem service.
Just like the tree in the example, human beings depend on ecosystem services, for such things as water regulation and flood protection provided by wetlands, fresh water from melting snowpacks, and more. Frank explained that this anthropocentric concept of nature can help people understand that humans depend on nature and not vice versa.
If taken into consideration via green accounting mechanisms one can get surprising results. For instance, the overall value of an intact forest may exceed the short-term profit from logging, especially when one sees the forest as a provider of common goods like clean water and carbon storage. Hajek explained that when most people think about the value of ecosystems, “right now products are always favored,” while services are considered secondary, if at all. For Hajek, assigning values to ecosystem services is trying to gain a balance between the two.
But is assigning a monetary value to something is the only way to make it count? On this topic, Oscar Wilde said that a cynic “is a man who knows the price of everything, and the value of nothing.”[1]
The future will show whether the ecosystem services concept leads to a monetary valuation—or price—on nature. Monetizing ecosystem services could also lead to an increased appreciation of things that are now taken for granted—or have value—like air purification, carbon sequestration, or erosion prevention.
This question of price versus value is not easy to address. The answer of whether or not these two values can be merged into one—in which price is dictated both by tangible products and abstract services—will only be discovered with time.
