Agriculture Reference
In-Depth Information
3
Economic Value of Ecosystem
Services from Agriculture
Scott M. Swinton, M. Christina Jolejole-Foreman,
Frank Lupi, Shan Ma, Wei Zhang, and Huilan Chen
If ecosystem services describe the benefits that people get from nature, then those
services must have value. What are they worth? Can we use values to choose desir-
able farming systems?
The idea of “value” in the sense of worth can be understood in two very
different ways (Heal 2000).
Intrinsic value
refers to inherent worth.
Economic
value
refers to relative scarcity. The diamond-water paradox elucidates the dif-
ference between the two (Heal 2000). Clean water, which is essential for human
life, has great intrinsic value, yet its price is often very low. Diamonds have
negligible intrinsic value yet they fetch very high prices. Prices express eco-
nomic values based on supply and demand.
The amount of a good or service
that producers will supply depends on the cost of producing it and the price
offered for its purchase. The amount that consumers demand depends on how
well they like it and its price of sale
. Economic methods for estimating the val-
ues of nonmarketed ecosystem services seek to capture these underlying market
relationships.
Although the food, fiber, and bioenergy products from agroecosystems tend to be
the only agricultural ecosystem services whose economic values are directly mea-
sured by market prices, research from the Kellogg Biological Station Long-Term
Ecological Research (KBS LTER) project is beginning to provide estimates of the
economic value of the nonmarketed ecosystem services from agriculture. In this
chapter, we first introduce the principles for economic valuation of nonmarketed
services, then offer a typology of valuation methods, and then review four KBS
LTER-related studies we have conducted that estimate the value of nonmarketed
ecosystem services.
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