What are Ecosystem Services? The Need for Standardized Environmental Accounting Units

Resources for the Future, Discussion Paper No. RFF DP 06-02

29 Pages Posted: 29 Mar 2006

See all articles by James Boyd

James Boyd

Resources for the Future

H. Spencer Banzhaf

North Carolina State University - Department of Agricultural & Resource Economics; PERC - Property and Environment Research Center; National Bureau of Economic Research (NBER)

Date Written: January 2006

Abstract

This paper advocates consistently defined units of account to measure the contributions of nature to human welfare. We argue that such units have to date not been defined by environmental accounting advocates and that the term "ecosystem services" is too ad hoc to be of practical use in welfare accounting. We propose a definition, rooted in economic principles, of ecosystem service units. A goal of these units is comparability with the definition of conventional goods and services found in GDP and the other national accounts. We illustrate our definition of ecological units of account with concrete examples. We also argue that these same units of account provide an architecture for environmental performance measurement by governments, conservancies, and environmental markets.

Keywords: Environmental accounting, ecosystem services, index theory, nonmarket valuation

JEL Classification: Q51, Q57, Q58, D6

Suggested Citation

Boyd, James William and Banzhaf, H. Spencer, What are Ecosystem Services? The Need for Standardized Environmental Accounting Units (January 2006). Resources for the Future, Discussion Paper No. RFF DP 06-02, Available at SSRN: https://ssrn.com/abstract=892425 or http://dx.doi.org/10.2139/ssrn.892425

James William Boyd (Contact Author)

Resources for the Future ( email )

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H. Spencer Banzhaf

North Carolina State University - Department of Agricultural & Resource Economics ( email )

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PERC - Property and Environment Research Center

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