1. Towards defining and accounting for ecosystem services

2. James Boyd Spencer Banzhaf Professor – Dept of Economics at Georgia State University Ph.D. Duke University Environmental Economics Senior Fellow/Director – Resources for the Future Ph.D. University of Pennsylvania Ecosystem Services, Ecological Benefit Assessment

3. Ecosystem Services are the benefits of nature to households Woodland Trust 2014

4. Problem Statement: “The development and acceptance of welfare accounting and environmental assessment are hobbled by lack of standardized ecosystem units.” ? ? ?

5. Green GDP vs. ESI (Ecological Services Index) GDP is the market value of all officially recognized final goods and services produced within a country in a year. “Green GDP” = GDP + non- market ecosystem values ESI is the market and non- market ecosystem service values

6. Public policy demand for standardized units of ecosystem measurement Club Good Common Pool Private Good Non-excludable Public Good Rival Non-rival Excludable

7. Final Ecosystem Services: components of nature, directly enjoyed, consumed, or used to yield human well-being (Definable Unit) Ecosystem Service Quantity Value or Price ** Key assumption: social policy goal is to maximize human well being

8. A = A(M,N) A = commodity M = marketed good N = Non-market Ecological input

9. Production Theory Perspectives The value can be derived from the input’s productivity times the value of the final commodity: PN = (∂A/∂N)PA Non-market input’s value can be derived from the value of the market input and the substitutability of the market and non-market inputs: PN = (∂A/∂N)/(∂A/∂M)*PM

10. 3 definitions of the measure of non- market service are referenced: dN (the change in non-market input) (dA/dN)dN (change in the final commodity) pNdN (the shadow value of the change)

11. Inventory of services

12. Critiques TFP on the market goods side- is there an equivalent on the non-market goods side? Services vs. goods; pg 620 capital stock as a proxy? Based on human well-being rather than the intrinsic values of ecosystem integrity Does this fully motivate society to protect the necessary components of the ecosystem?

14. Measurement should be focused on the flow of final current services as well as capital depreciation

15. q = quantity p = price