The Economic Value of Soil Carbon - Soil Carbon: Science, Management and Policy for Multiple Benefits - page 182

Table 15.1. Output value (use and non-use values) components of TEV of soil carbon and associated
significance.

Output value
components of
soil carbon Value subtype Meaning Significance and examples

Use values Direct use value Results from direct human use of soil

carbon

Medium - production of peat
for energy production

Indirect use value Derived from the regulation services

provided by soil carbon

High - sequestration of
carbon, regulation of
agricultural production

Option value Relates to the importance that people

give to the future availability of soil
carbon for personal benefit

Medium to high when
information on indirect use
values is available (e.g.
climate regulation, etc.)

Non-use
values

Bequest value Value attached by individuals to the

fact that in the future the individual
will also have access to the benefits
from soil carbon (intergenerational
equity concerns)

High under sustainability
policies

Altruist value Value attached by individuals to the

fact that other people of the present
generation have access to the
benefits provided by soil carbon
(intragenerational equity concerns)

Medium to high in non-
individualistic societies

Existence value Value related to the satisfaction that

individuals derive merely from the
knowledge that soil carbon is
protected

N/A

shocks and reorganize so as to maintain its
essential structure and functions, in a given
ecological state. Securing soil resilience
thus is associated with maintaining a min-
imum amount of soil carbon that allows
'healthy' functioning of the soil. This min-
imum level of soil carbon can be approached
through the concept of 'critical natural cap-
ital' (Brand, 2009). Thus, we contend that
TEV of soil carbon is the sum of the total
output value (its components being identi-
ied in Table 15.1 ) and the insurance value
under risk and uncertainty. The insurance
value exists in as much that people are risk
averse and are willing to pay to secure a
stable stream of the TEV in the face of vari-
ability and disturbance.
The literature on the natural insurance
value of natural assets defines natural insur-
ance in different ways. For example, Perrings
(1995, p. 70) points out that the insurance value
of an asset concerns its role in the amelioration

of fundamental uncertainty associated with
catastrophic events that cannot be reducible
to the realm of actuarial risk, which is appro-
priate when we can allocate probabilities
to the different states of nature. Similarly,
Baumgärtner and Strunz (2014, p. 22) inter-
pret the value of natural insurance 'as the
value of one very specific function of resili-
ence: to reduce an ecosystem user's income
risk from using ecosystem services under un-
certainty'. Following these ideas of the value
of resilience-based natural insurance, we
posit that the value of natural insurance (NIV)
of soil carbon is composed of two related but
differentiated value components: (i) the value
of soil carbon for self-protection under un-
certainty (the value of lowering the risk or
probability of being hit by a disturbance, for
example flooding or drought, causing a de-
crease in the total output value; and (ii) the
value of self-insurance (SI) (lowering the size
of the loss due to such an event occurring).