The Economic Value of Soil Carbon - Soil Carbon: Science, Management and Policy for Multiple Benefits - page 181

institutions, culture and so on (Pascual
et al ., 2010). Thus, it is important to be re-
minded that estimates of the economic
value of soil carbon would reflect the cur-
rent choice pattern of individuals, given
multiple conditioning factors that deter-
mine and are determined by the distribu-
tion of income and wealth in society, the state
of soil carbon, production technologies and
expectations about the future. A change in
any of these variables affects the estimated
economic value of soil carbon.
The stock-flow framework can be use-
ful to value natural assets such as soil car-
bon. The stock-flow model embedded in
the ecosystem services framework lends
itself directly to valuation and cost-benefit
analysis (Wegner and Pascual, 2011). Here,
we will employ this framework of analysis.
However, it is also important to note the
risks of such framework, as over-reliance
on the ecological stock-flow framework
obscures the depth and richness of natural
sciences, and specifically ecological know-
ledge, as well as social sciences and eco-
nomics in particular (Norgaard, 2010).

in most societies people are already familiar
with money as a unit of account and because
expressing relative preferences through TEV
in monetary units can be useful to policy
makers. There is a taxonomy and classifica-
tion of the components of TEV for soil carbon
and valuation tools that can be used to esti-
mate such components (see Chapter 18, this
volume). TEV is the aggregated value of soil
carbon in a given state ( Table 15.1 ) .

The total output value
of soil carbon

The components of the output value within
the TEV framework can be mapped using the
ecosystem services framework. Robinson
et al . (2013) note that this framework is
used more in the agricultural context than
in soil science per se, probably because of
the emphasis on final services like the pro-
duction of food and fibre.
The main value of soil carbon stems
from its intermediate role as a supporting
service that underpins regulating services
such as promoting resistance to the erosion
of soils and regulating flooding by increas-
ing infiltration, reducing runoff and slowing
water movement from upland to lowland
areas and reducing releases of agrochem-
icals, pathogens and contaminants to the
environment by aiding their retention and
decomposition (Victoria et al ., 2012).

The Total Economic Value of
Soil Carbon

Soil carbon shares the characteristics of a
private good when managed by an individ-
ual agent, as it delivers benefits that can be
appropriated privately, and of a public good
when that is appropriated by society at
large; for example, in terms of its role in sta-
bilizing climate. It is important to consider
this when demonstrating the value of soil
carbon through the standard total economic
value (TEV) framework. TEV is defined as
the sum of the values of all benefit flows
that soil carbon generates, both now and in
the future - appropriately discounted (Pas-
cual et al ., 2010). It encompasses all compo-
nents of preference satisfaction (or utility)
derived from soil carbon using a common
unit of account such as money or any other
unit of measurement that allows compari-
sons of the benefits of the various goods and
services derived from soil carbon. Normally,
TEV is translated in monetary terms, since

The insurance value of soil carbon

Information about the total mean output
value can be enhanced by understanding
the system's capacity to maintain the pro-
duction of values in the face of variability
and disturbance. This implies that besides
an 'output' (yield) value, there also exists an
'insurance' value determined by risk prefer-
ences and the level of uncertainty (Turner
et al ., 2003).
The insurance value of soil carbon can
be related to the soil's self-organizing capacity
and resilience, sensu Holling (1973), which
is related to the soil's capacity to absorb