Quantifying and Valuing Ecosystem Services

It is often asserted that effective environmental protection can be achieved only at the expense of productivity growth. But this misses the point that environmental assets - like other assets – provide benefits which enhance economic performance, offer new opportunities for investment and employment, and improve society’s wellbeing. This note sets out thinking on an ecosystems approach, offering a more sophisticated and more comprehensive understanding of the relationship between economic and environmental performance. This approach – which would replicate for the UK what the Millennium Ecosystem Assessment did at global level – would help us to understand how both current living standards and future economic opportunities depend on the condition of the natural environment. It will also help us to understand how the condition of our ‘environmental assets’ is enhanced or depleted by different types and intensities of use. In turn this gives us a sense of the risks to our ability to continue to consume these benefits into the future. Valuing these different effects can help us to solve practical problems – for policy makers, local communities and for businesses. For example, are we under-protecting some parts of the environment and over-protecting others? Where is green space most and least valuable? How prescriptive should we be in regulating the commercial use of environmental assets, and where it is in businesses own interests to protect and enhance them? It will be a challenge to make an ecosystems approach “operational” in the UK. But we believe that there are large gains to be made by taking decisions based on a better understanding of how the environment can support or constrain economic performance and opportunity. This will require much better alignment of research effort, particularly for natural scientists and economists.