Recent advances in the valuation of ecosystem services and biodiversity

Recent interest in the economics of biodiversity and wider ecosystem services has been given empirical expression through a focus upon economic valuation. This emphasis has been prompted by a growing recognition that the benefits and opportunity costs associated with such services are frequently given cursory consideration in policy analyses or even completely ignored. The valuation of biodiversity and ecosystem services is therefore increasingly seen as a crucial element of robust decision making and this has been reflected in a growing body of related research. We provide a critical review of some of this research, considering the valuation methods applied to date and focussing upon their limitations in respect to certain categories of ecosystem services (particularly cultural services) and the applicability of the extant literature to new settings. Substantial questions also remain at the interface of natural science and economics and we consider the potential contribution of the conceptualization of ecosystems as assets as a response to this challenge. As part of this review we also highlight the role which large scale ‘ecosystem assessments’ have played as an impetus to extending the valuation evidence base and the way in which frameworks and assessments of how ecosystems contribute to human wellbeing might be translated into policy thinking and decision analyses. Copyright 2012, Oxford University Press.