Valuing ecosystem services

EXECUTIVE SUMMARY.................................................................................. 1 1 INTRODUCTION............................................................................... 17 Statement of the Problem..................................................................... 22 Study Origin and Scope ....................................................................... 26 Perspective of the Report..................................................................... 27 Summary and Conclusions ..................................................................29 References ...........................................................................................30 2 THE MEANING OF VALUE AND USE OF ECONOMIC VALUATION IN THE ENVIRONMENTAL POLICY DECISION-MAKING PROCESS................................................33 Introduction .........................................................................................33 Role of Economic Valuation................................................................ 35 The Economic Approach to Valuation ................................................ 44 Summary: Conclusions and Recommendations.................................. 54 References ...........................................................................................56 3 AQUATIC AND RELATED TERRESTRIAL ECOSYSTEMS ........ 59 Introduction .........................................................................................59 Extent and Status of Aquatic and Related Terrestrial Ecosystems in the United States................................................................................. 62 Cataloging Ecosystem Structure and Function and Mapping Ecosystem Goods and Services ...................................................................... 75 Issues Affecting Identification of Goods and Services ........................ 83 Summary: Conclusions and Recommendations.................................. 88 References ...........................................................................................90 4 METHODS OF NONMARKET VALUATION................................. 95 Introduction .........................................................................................95 Economic Approach to Valuation........................................................ 95 Classification of Valuation Approaches ............................................ 100 Applicability of Methods to Valuing Ecosystem Services ................ 129 Issues .................................................................................................137 Summary: Conclusions and Recommendations................................ 141 References .........................................................................................143 5 TRANSLATING ECOSYSTEM FUNCTIONS TO THE VALUE OF ECOSYSTEM SERVICES: CASE STUDIES........................... 153 xii Contents Introduction .......................................................................................153 Mapping Ecosystem Functions to the Value of Ecosystem Services: Case Studies................................................................................ 155 Implications and Lessons Learned..................................................... 190 Summary: Conclusions and Recommendations................................ 196 References .........................................................................................197 6 JUDGMENT, UNCERTAINTY, AND VALUATION..................... 209 Introduction .......................................................................................209 Professional Judgments .....................................................................209 Uncertainty ........................................................................................ 216 Decision-Making and Decision Criteria Under Uncertainty.............. 221 Illustrations of the Treatment of Uncertainty..................................... 227 Summary: Conclusions and Recommendations................................ 232 References .........................................................................................236 7 ECOSYSTEM VALUATION: SYNTHESIS AND FUTURE DIRECTIONS............................ 239 General Premises ...............................................................................240 Synthesis of Major Conclusions ........................................................ 242 Guidelines/Checklist for Valuation of Ecosystem Services............... 253 Overarching Recommendations.........................................................256 APPENDIXES A Summary of Related NRC Reports.................................................... 261 B Household Production Function Models............................................ 266 C Production Function Models.............................................................. 270 D Committee and Staff Biographical Information.................................