Environmental Engineering Reference
In-Depth Information
50
Agricultural land-use
Forested land-use
40
30
20
10
0
C
2
C
3
0
20
40
60
80
100
120
C
1
-10
Percentage area cover of forest (ha)
Figure 11.1
Showing the level of marginal proi ts for dif erent types of
vegetation cover
The following section describes the theory of the production function
approach, and is followed by a worked example of applying this approach
to the valuation of savanna and forest resources.
The production function approach to valuing ecosystems
A production function is a mathematical description of the relationship
between the production of a good (for example, sheep, maize), and the
amount of inputs (for example, environmental or human-made) required for
its production. For example, a production function for clay pots (
P
) might
be determined by the amount of clay (
C
), water (
W
) and people (
L
) avail-
able to make them, where the way in which these factors interact dei nes the
mathematical form of the function. The development of a production func-
tion provides a quantitative description of a relationship between several
factors where previously the specii c relationship was unknown.
Although initially used in economic analysis to describe the production
of goods by i rms, the use of this methodology has subsequently been
expanded to include measures of environmental factors, and can be used
to describe the production of any good where the inputs into its produc-
tion can be quantii ed.
Direct- use values
Ecosystems provide many important functions for humankind, which, as
has already been described, can be grouped according to their direct-use
or indirect-use values.
2
The valuation of an ecosystem is frequently made
