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
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: Suggested Citation