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Accounting for the increasing benefits from scarce ecosystems

Author

Listed:
  • Drupp, M. A.
  • Hänsel, M. C.
  • Fenichel, E. P.
  • Freeman, M.
  • Gollier, C.
  • Groom, Ben
  • Heal, G. M.
  • Howard, P. H.
  • Millner, A.
  • Moore, F. C.
  • Nesje, F.
  • Quaas, M. F.
  • Smulders, S.
  • Sterner, T.
  • Traeger, C.
  • Venmans, Frank

Abstract

Governments are catching up with economic theory and practice by increasingly integrating ecosystem service values into national planning processes, including benefitcost analyses of public policies. Such analyses require information not only about today’s benefits from ecosystem services but also on how benefits change over time. We address a key limitation of existing policy guidance, which assumes that benefits from ecosystem services remain unchanged. We provide a practical rule that is grounded in economic theory and evidence-based as a guideline for how benefits change over time: They rise as societies get richer and even more so when ecosystem services are declining. Our proposal will correct a substantial downward bias in currently used estimates of future ecosystem service values. This will help governments to reflect the importance of ecosystems more accurately in benefit-cost analyses and policy decisions they inform.

Suggested Citation

  • Drupp, M. A. & Hänsel, M. C. & Fenichel, E. P. & Freeman, M. & Gollier, C. & Groom, Ben & Heal, G. M. & Howard, P. H. & Millner, A. & Moore, F. C. & Nesje, F. & Quaas, M. F. & Smulders, S. & Sterner, , 2024. "Accounting for the increasing benefits from scarce ecosystems," LSE Research Online Documents on Economics 122469, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:122469
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    File URL: http://eprints.lse.ac.uk/122469/
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    References listed on IDEAS

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    1. Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
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    Cited by:

    1. Elia Moretti & Michael Benzaquen, 2024. "Mitigating Farmland Biodiversity Loss: A Bio-Economic Model of Land Consolidation and Pesticide Use," Papers 2407.19749, arXiv.org, revised Oct 2024.
    2. Parkatti, Vesa-Pekka & Suominen, Antti & Tahvonen, Olli & Malo, Pekka, 2024. "Assessing economic benefits and costs of carbon sinks in boreal rotation forestry," Forest Policy and Economics, Elsevier, vol. 166(C).
    3. Knoke, Thomas & Elsasser, Peter & Kindu, Mengistie, 2024. "Considering the land-cover elasticity of ecosystem service value coefficients improves assessments of large land-use changes," Ecosystem Services, Elsevier, vol. 68(C).

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    More about this item

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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