Authors

Prof. Edward B. Barbier

Reference

Barbier, E. (2012). Ecosystem services and wealth accounting. In UNU-IHDP and UNEP. Inclusive Wealth Report 2012. Measuring progress toward sustainability. Cambridge: Cambridge University Press

Key Messages from Chapter

Ecosystems should be treated as an important asset in an economy and, in principle, ecosystem services should be valued in a similar manner as any other form of wealth. Quantifying these services is very challenging.

The purpose of this chapter is to review progress in economics and ecology in assessing ecosystem services and their values, and to discuss the resulting implications for including such services in a wealth accounting framework.

Understanding the relationship between ecosystems, their structure and functions, and the ecological services they generate is essential to determining how the structure and functions of an ecosystem provide valuable goods and services to humans.

Since the purpose of new investment is to increase the quantity and quality of the economy’s total capital stock, or wealth, adjusting gross domestic product (GDP) for depreciation in this stock would measure more accurately whether net additions to capital are occurring.

If net domestic product (NDP) is to serve as a true measure of the changes in an economy’s wealth, it must include any appreciation or depreciation to human and natural capital as well.

The approach developed here requires, first, recognizing ecosystems as a component of natural capital, or ecological capital; and second, measuring these important assets in terms of the land area, or ecological landscape, which defines their boundaries.