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Sumy State University, Sumy, Ukraine
Humankind benefits from a multitude of resources and processes that are supplied by natural ecosystems. Collectively, these benefits are known as ecosystem services and include products like clean drinking water and processes such as the decomposition of wastes. While scientists and environmentalists have discussed ecosystem services for decades, these services were popularized and their definitions formalized by the United Nations 2004 Millennium Ecosystem Assessment (MA), a four-year study involving more than 1,300 scientists worldwide. This grouped ecosystem services into four broad categories: provisioning, such as the production of food and water; regulating, such as the control of climate and disease; supporting, such as nutrient cycles and crop pollination; and cultural, such as spiritual and recreational benefits.
As human populations grow, so do the resource demands imposed on ecosystems and the impacts of our global footprint. Natural resources are not invulnerable and infinitely available. The environmental impacts of anthropogenic actions, which are processes or materials derived from human activities, are becoming more apparent – air and water quality are increasingly compromised, oceans are being overfished, pests and diseases are extending beyond their historical boundaries, and deforestation is exacerbating flooding downstream. It has been reported that approximately 40-50% of Earth’s ice-free land surface has been heavily transformed or degraded by anthropogenic activities, 66% of marine fisheries are either overexploited or at their limit, atmospheric CO2 has increased more than 30% since the advent of industrialization, and nearly 25% of Earth’s bird species have gone extinct in the last two thousand years . Society is increasingly becoming aware that ecosystem services are not only limited, but also that they are threatened by human activities. The need to better consider long-term ecosystem health and its role in enabling human habitation and economic activity is urgent. To help inform decision-makers, many ecosystem services are being assigned economic values, often based on the cost of replacement with anthropogenic alternatives. The ongoing challenge of prescribing economic value to nature, for example through biodiversity banking, is prompting transdisciplinary shifts in how we recognize and manage the environment, social responsibility, business opportunities, and our future as a species.
There is extensive disagreement regarding the environmental and economic values of ecosystem services. Some people may be unaware of the environment in general and humanity's interrelatedness with the natural environment, which may cause misconceptions. Although environmental awareness is rapidly improving in our contemporary world, ecosystem capital and its flow are still poorly understood, threats continue to impose, and we suffer from the so-called ‘tragedy of the commons’. Many efforts to inform decision-makers of current versus future costs and benefits now involve organizing and translating scientific knowledge to economics, which articulate the consequences of our choices in comparable units of impact on human well-being. An especially challenging aspect of this process is that interpreting ecological information collected from one spatial-temporal scale does not necessarily mean it can be applied at another; understanding the dynamics of ecological processes relative to ecosystem services is essential in aiding economic decisions. Weighting factors such as a service’s irreplaceability or bundled services can also allocate economic value such that goal attainment becomes more efficient.
The economic valuation of ecosystem services also involves social communication and information, areas that remain particularly challenging and are the focus of many researchers. In general, the idea is that although individuals make decisions for any variety of reasons, trends reveal the aggregative preferences of a society, from which the economic value of services can be inferred and assigned. The six major methods for valuing ecosystem services in monetary terms are:
^ Services allow society to avoid costs that would have been incurred in the absence of those services (e.g. waste treatment by wetland habitats avoids health costs)
Replacement cost. Services could be replaced with man-made systems (e.g. restoration of the Catskill Watershed cost less than the construction of a water purification plant)
^ Services provide for the enhancement of incomes (e.g. improved water quality increases the commercial take of a fishery and improves the income of fishers)
Travel cost. Service demand may require travel, whose costs can reflect the implied value of the service (e.g. value of ecotourism experience is at least what a visitor is willing to pay to get there)
Hedonic pricing. Service demand may be reflected in the prices people will pay for associated goods (e.g. coastal housing prices exceed that of inland homes)
Contingent valuation. Service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives (e.g. visitors willing to pay for increased access to national parks)
1. Millennium Ecosystem Assessment (MEA). 2005. Ecosystems and Human Well-Being: Synthesis. Island Press, Washington. 155pp.
2. Vitousek, P.M., J. Lubchenco, H.A. Mooney, J. Melillo. 1997. Human domination of Earth’s ecosystems. Science 277: 494-499.
3. DeFries, R.S., J.A. Foley, and G.P. Asner. 2004. Land-use choices: balancing human needs and ecosystem function. Frontiers in Ecology and the Environment 2: 249-257.
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