New Formula for Ecosystem ’Services’

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Photo: UHH/R.Hansen Moritz Drupp
Photo: UHH/R.Hansen Moritz Drupp

Governments the world over are looking for novel approaches to evaluating ecosystem benefits and value. This is to illustrate the impacts of environmental destruction for political decision-making. Originally acting at the behest of the government of the United Kingdom, an international research team, headed by Prof. Moritz Drupp from Universität Hamburg, just suggested a new calculation approach. This will be presented in the journal Science.

Across the world, animal and plant species and their habitats are wiped out at breathtaking speed. And so are the -services- they provide, including the filtering of air and water, the pollination of crops, the recreational value for humans, or the existence value of organisms. To better illustrate these ecosystem services in costbenefit analyses, countries have given partial monetary value to ecosystem services. Back in 2010, during the Tenth Conference of the Parties to the Convention on Biological Diversity in Japan, the international community decided that biodiversity benefits must factor in planning processes.

-But the existing valuation methods for ecosystem services are insufficient,- says Moritz Drupp, a professor of sustainability economics at Universität Hamburg. So far, calculations have only considered the current monetary value of ecosystem benefits. But nature’s value actually increases with time. -Our study provides governments with a formula to assess and include the future value of scarce ecosystem services in their decisions,- says Drupp.

Two factors are key to value adjustments. Not only will the income and hence wealth of the world’s population grow, by approximately 2 percent- growth in wealth will also make people more willing to invest into nature conservation. -On the other hand, ecosystem services will become more valuable the scarcer they get,- according to Drupp. -That a scarce resource will get more expensive is a fundamental economic principle-and it also applies here. Given the current development, we must unfortunately prepare ourselves for further biodiversity loss.-

If these factors are taken into account, current cost-benefit analyses must assign ecosystem services a far higher value-according to the new formula alone, it should be over 130 percent higher, just considering income increases expected over the next 100 years. Value adjustments for dwindling ecosystems will be even higher.

Political decisions can have positive or negative biodiversity impacts. It is crucial that governments are able to assess the consequences of their decisions. The new method is aimed at helping them. Economics expert Drupp devised it in collaboration with researchers from Germany, the UK, France, Denmark, the Netherlands, Norway, Sweden, and the USA. The team also advises His Majesty’s Treasury, UK, the White House, USA, and the German Environment Agency (UBA).

Moritz Drupp does research in the Cluster of Excellence Climate, Climatic Change, and Society (CLICCS) at Universität Hamburg. The cluster investigates the natural science principles and social dimensions of climate change and examines which future developments ("climate futures") are not only possible but also plausible.

Find the publication -Accounting for the increasing benefits from scarce ecosystemson- on the Science webpage.