A Typology for the Classification, Description and Valuation of Ecosystem Functions, Goods and...

Ecological Economics 41 (2002) 393–408

SPECIAL ISSUE: The Dynamics and Value of Ecosystem Services: IntegratingEconomic and Ecological Perspectives

A typology for the classification, description and valuationof ecosystem functions, goods and services

Rudolf S. de Groot a,*, Matthew A. Wilson b,1, Roelof M.J. Boumans b,1

a International Center for Integrati�e Studies (ICIS), Maastricht Uni�ersity and En�ironmental Systems Analysis Group,Wageningen Uni�ersity, PO Box 616, NL-6200 MD Maastricht, The Netherlands

b Center for En�ironmental Studies, Institute for Ecological Economics, Uni�ersity of Maryland, USA

Abstract

An increasing amount of information is being collected on the ecological and socio-economic value of goods andservices provided by natural and semi-natural ecosystems. However, much of this information appears scatteredthroughout a disciplinary academic literature, unpublished government agency reports, and across the World WideWeb. In addition, data on ecosystem goods and services often appears at incompatible scales of analysis and isclassified differently by different authors. In order to make comparative ecological economic analysis possible, astandardized framework for the comprehensive assessment of ecosystem functions, goods and services is needed. Inresponse to this challenge, this paper presents a conceptual framework and typology for describing, classifying andvaluing ecosystem functions, goods and services in a clear and consistent manner. In the following analysis, aclassification is given for the fullest possible range of 23 ecosystem functions that provide a much larger number ofgoods and services. In the second part of the paper, a checklist and matrix is provided, linking these ecosystemfunctions to the main ecological, socio–cultural and economic valuation methods. © 2002 Elsevier Science B.V. Allrights reserved.

Keywords: Classification of ecosystem functions; Typology of goods and services; Ecological and socio-economic valuation

This article is also available online at:www.elsevier.com/locate/ecolecon

1. Introduction

In the past few decades, the field of ecologicaleconomics has witnessed a spectacular rise of

concern with the valuation of ecosystem func-tions, goods and services. Early references to theconcept of ecosystem functions, services and theireconomic value date back to the mid-1960s andearly 1970s (e.g. King, 1966; Helliwell, 1969;Hueting, 1970; Odum and Odum, 1972). Morerecently, there has been an almost exponentialgrowth in publications on the benefits of naturalecosystems to human society (see for example,Pearce, 1993; Turner, 1993; De Groot, 1992, 1994;Bingham et al., 1995; Daily 1997; Costanza et al.,

* Corresponding author. Tel.: +31-43-388-2691; fax: +31-43-388-4916

E-mail address: [email protected] (R.S. de Groot).1 As of 09/01/2002, Dr. Wilson and Dr. Boumans can be

reached at the Gund Institute for Ecological Economics, Uni-versity of Vermont, School of Natural Resources, George D.Aiken Center, Burlington VT 05405-0088, USA.

0921-8009/02/$ - see front matter © 2002 Elsevier Science B.V. All rights reserved.

PII: S0 921 -8009 (02 )00089 -7

mailto:[email protected]

R.S. de Groot et al. / Ecological Economics 41 (2002) 393–408394

Fig. 1. Framework for integrated assessment and valuation of ecosystem functions, goods and services.

1997; Pimentel and Wilson, 1997; Limburg andFolke, 1999; Wilson and Carpenter, 1999; Daily etal., 2000). Despite the increase in publications onecosystem goods and services, a systematic typol-ogy and comprehensive framework for integratedassessment and valuation of ecosystem functionsremains elusive. This paper, therefore, aims toprovide such an integrated framework, of whichthe main elements are presented in Fig. 1.

As Fig. 1 shows, the first step towards a com-prehensive assessment of ecosystem goods andservices involves the translation of ecologicalcomplexity (structures and processes) into a morelimited number of ecosystem functions. Thesefunctions, in turn, provide the goods and servicesthat are valued by humans. In the ecologicalliterature, the term ‘ecosystem function’ has beensubject to various, and sometimes contradictory,interpretations. Sometimes the concept is used todescribe the internal functioning of the ecosystem(e.g. maintenance of energy fluxes, nutrient(re)cycling, food-web interactions), and sometimes

it relates to the benefits derived by humans fromthe properties and processes of ecosystems (e.g.food production and waste treatment).

In this paper, we explicitly define ecosystemfunctions as ‘the capacity of natural processes andcomponents to provide goods and services thatsatisfy human needs, directly or indirectly’ (DeGroot, 1992). Using this definition, ecosystemfunctions are best conceived as a subset of ecolog-ical processes and ecosystem structures (see Fig.1). Each function is the result of the naturalprocesses of the total ecological sub-system ofwhich it is a part. Natural processes, in turn, arethe result of complex interactions between biotic(living organisms) and abiotic (chemical and phys-ical) components of ecosystems through the uni-versal driving forces of matter and energy.

Although a wide range of ecosystem functionsand their associated goods and services have beenreferred to in literature, our experience suggeststhat it is convenient to group ecosystem functionsinto four primary categories (De Groot et al.,2000).

R.S. de Groot et al. / Ecological Economics 41 (2002) 393–408 395

1. Regulation functions : this group of functionsrelates to the capacity of natural and semi-nat-ural ecosystems to regulate essential ecologicalprocesses and life support systems throughbio-geochemical cycles and other biosphericprocesses. In addition to maintaining ecosys-tem (and biosphere) health, these regulationfunctions provide many services that have di-rect and indirect benefits to humans (such asclean air, water and soil, and biological con-trol services).

2. Habitat functions : natural ecosystems providerefuge and reproduction habitat to wild plantsand animals and thereby contribute to the (insitu) conservation of biological and geneticdiversity and evolutionary processes.

3. Production functions : Photosynthesis and nu-trient uptake by autotrophs converts energy,carbon dioxide, water and nutrients into awide variety of carbohydrate structures whichare then used by secondary producers to createan even larger variety of living biomass. Thisbroad diversity in carbohydrate structuresprovides many ecosystem goods for humanconsumption, ranging from food and rawmaterials to energy resources and geneticmaterial.

4. Information functions : Because most of humanevolution took place within the context ofundomesticated habitat, natural ecosystemsprovide an essential ‘reference function’ andcontribute to the maintenance of humanhealth by providing opportunities for reflec-tion, spiritual enrichment, cognitive develop-ment, recreation and aesthetic experience.

Although the rank-order of the function cate-gories is somewhat arbitrary, there is an underly-ing logic in their ordering. The first twofunction-groups (regulation and habitat) are es-sential to the maintenance of natural processesand components, and are, therefore, conditionalto the maintenance of the availability of the othertwo function-groups. Since human life is quiteimpossible in the absence of any one of thesefunction groups, however, the proposed hierarchyshould not be interpreted too strictly.

Once the functions of an ecosystem are known,the nature and magnitude of value to human

society can be analyzed and assessed through thegoods and services provided by the functionalaspects of the ecosystem. The ecosystem function-concept thus provides the empirical basis for theclassification of (potentially) useful aspects of nat-ural ecosystems to humans: observed ecosystemfunctions are reconceptualized as ‘ecosystemgoods or services’ when human values are im-plied. The primary insight here is that the conceptof ecosystem goods and services is inherently an-thropocentric: it is the presence of human beingsas valuing agents that enables the translation ofbasic ecological structures and processes intovalue-laden entities. As Fig. 1 shows, in our pro-posed framework, the form of this translation isnot restricted to economic terms of ‘consumption’but may also be ecological and/or socio-cultural(see further).

2. Classification of ecosystem functions, goodsand services

Table 1 below provides an overview of the mainfunctions, goods and services that can be at-tributed to natural ecosystems and their associ-ated ecological structures and processes. The firstcolumn indicates a list of 23 functions and thesecond column lists the ecological structures andprocesses underlying these functions. The thirdcolumn provides a more detailed list with exam-ples of specific goods and services derived fromthese functions (not exhaustive).

In Table 1, only those goods and services areincluded that can be used on a sustainable basis2,in order to maintain the ecosystem functions andassociated ecosystem processes and structures.

Given these restrictions, important non-renew-able natural mineral resources like gold, iron,diamonds, and oil are excluded from this list.Furthermore, energy sources that cannot be at-

2 Ecological sustainability can be defined as ‘the naturallimits set by the carrying capacity of the natural environment(physically, chemically and biologically), so that human usedoes not irreversibly impair the integrity and proper function-ing of its natural processes and components’ (de Groot et al.,2000).


Table 1Functions, goods and services of natural and semi-natural ecosystems

Functions Ecosystem processes and components Goods and services (examples)

Maintenance of essential ecological processes andRegulation Functionslife support systemsRole of ecosystems in bio-geochemical cyclesGas regulation1 1.1 UVb-protection by O3 (preventing disease).(e.g. CO2/O2 balance, ozone layer, etc.) 1.2 Maintenance of (good) air quality.

1.3 Influence on climate (see also function 2.)2 Influence of land cover and biol. mediatedClimate regulation Maintenance of a favorable climate (temp.,

precipitation, etc) for, for example, humanprocesses (e.g. DMS-production) on climatehabitation, health, cultivation

3 Disturbance Influence of ecosystem structure on dampening 3.1 Storm protection (e.g. by coral reefs).prevention 3.2 Flood prevention (e.g. by wetlands andenv. disturbances

forests)Role of land cover in regulating runoff & riverWater regulation4 4.1 Drainage and natural irrigation.

4.2 Medium for transportdischargeFiltering, retention and storage of fresh waterWater supply Provision of water for consumptive use5(e.g. in aquifers) (e.g.drinking, irrigation and industrial use)

Soil retention6 6.1 Maintenance of arable land.Role of vegetation root matrix and soil biota in6.2 Prevention of damage fromsoil retentionerosion/siltation

Weathering of rock, accumulation of organicSoil formation7 7.1 Maintenance of productivity on arableland.matter7.2 Maintenance of natural productive soils

Role of biota in storage and re-cycling ofNutrient regulation8 Maintenance of healthy soils and productiveecosystemsnutrients (eg. N,P&S)

9 Role of vegetation & biota in removal orWaste treatment 9.1 Pollution control/detoxification.9.2 Filtering of dust particles.breakdown of xenic nutrients and compounds9.3 Abatement of noise pollution

Role of biota in movement of floral gametesPollination 10.1 Pollination of wild plant species.1010.2 Pollination of crops

Biological control11 Population control through trophic-dynamic 11.1 Control of pests and diseases.11.2 Reduction of herbivory (crop damage)relations

Habitat Functions Pro�iding habitat (suitable li�ing space) for wild Maintenance of biological & genetic diversity(and thus the basis for most other functions)plant and animal species

12 Suitable living space for wild plants and animalsRefugium function Maintenance of commercially harvested speciesNursery function13 Suitable reproduction habitat 13.1 Hunting, gathering of fish, game, fruits,

etc.Production Functions Pro�ision of natural resources13.2 Small-scale subsistence farming &aquaculture

Food Conversion of solar energy into edible plants and14 14.1 Building & Manufacturing (e.g. lumber,skins).animals14.2 Fuel and energy (e.g. fuel wood, organicmatter).14.3 Fodder and fertilizer (e.g. krill, leaves,litter).

Conversion of solar energy into biomass forRaw materials15 15.1 Improve crop resistance to pathogens &human construction and other uses pests.

15.2 Other applications (e.g. health care)Genetic material and evolution in wild plants16 16.1 Drugs and pharmaceuticals.Genetic resourcesand animals 16.2 Chemical models & tools.

16.3 Test- and essay organisms17 Variety in (bio)chemical substances in, and other Resources for fashion, handicraft, jewelry, pets,Medicinal resources

worship, decoration & souvenirs (e.g. furs,medicinal uses of, natural biotafeathers, ivory, orchids, butterflies, aquarium18 Ornamental Variety of biota in natural ecosystems with

(potential) ornamental useresources fish, shells, etc.)Pro�iding opportunities for cogniti�e de�elopmentInformation Functions


Table 1 (Continued)

Ecosystem processes and components Goods and services (examples)Functions

Aesthetic information19 Attractive landscape features Enjoyment of scenery (scenic roads, housing,etc.)

Variety in landscapes with (potential) recreational Travel to natural ecosystems for eco-tourism,Recreation20uses outdoor sports, etc.

Cultural and artistic21 Variety in natural features with cultural and Use of nature as motive in books, film, painting,information folklore, national symbols, architect., advertising,artistic value

etc.Variety in natural features with spiritual and22 Spiritual and historic Use of nature for religious or historic purposeshistoric value (i.e. heritage value of natural ecosystems andinformation

features)Variety in nature with scientific and educationalScience and education23 Use of natural systems for school excursions,

etc. Use of nature for scientific researchvalue

Adapted from Costanza et al. (1997), De Groot (1992), De Groot et al. (2000).

tributed to a certain ecosystem type are excluded,e.g. wind and solar-energy. On the other hand,some non-ecosystem specific functions that can beused without (permanently) affecting the otherfunctions, such as the use of natural waterways fortransportation, is included. Also some mineralresources that are renewable within a time-frame of100–1000 years, like sand on beaches provided bydead coral and shells, are included. In (economic)valuation of these goods and services due accountshould be taken of these natural regeneration rates.

Since the use of one function may influence theavailability of other functions, and their associatedgoods and services, the capacity of ecosystems toprovide goods and services in a sustainable mannershould be determined under complex systems con-ditions (see Limburg et al., 2002). The ecosystemprocesses and components described in the secondcolumn of Table 1 should, therefore, be used indynamic modeling to make these interdependen-cies, and the implications for their valuation, moreexplicit (see Boumans et al., 2002).

It should be realized that ecosystem processesand services do not always show a one-to-onecorrespondence: sometimes a single ecosystem ser-vice is the product of two or more processes,whereas in other cases a single process contributesto more than one service. For example, the function‘gas regulation’ is based on biogeochemical pro-cesses (like carbon and oxygen cycling) whichmaintain a certain air quality but also influence thegreenhouse effect and thereby climate regulating

processes. Furthermore, analysis of ecosystemfunctions and services involves different scales,notably the physical scale of the ecosystem functionitself, and the scale at which humans value thegoods and services provided. It is not a necessarycondition that the two correspond. When valuingecosystem functions, these inter-linkages and scaleissues should be made clear, and on the next fewpages each of the 23 functions are described in moredetail.

2.1. Regulation functions and related ecosystemser�ices

Natural ecosystems play an essential role in theregulation and maintenance of ecological pro-cesses and life support systems on earth. Themaintenance of the earth’s biosphere as human-ity’s only life support system in an otherwisehostile cosmic environment depends on a verydelicate balance between many ecological pro-cesses. Some of the most important processesinclude the transformation of energy, mainly fromsolar radiation, into biomass (primary productiv-ity); storage and transfer of minerals and energyin food chains (secondary productivity); biogeo-chemical cycles (e.g. the cycling of nitrogen andother nutrients through the biosphere); mineral-ization of organic matter in soils and sediments;and regulation of the physical climate system. Allthese processes, in turn, are regulated by theinterplay of abiotic factors (i.e. climate) withliving organisms through evolution and control


mechanisms. In order for humans to continue tobenefit from these functions, we need to ensurethe continued existence and integrity of thesenatural ecosystems and processes. Because of theindirect benefits of regulation functions, they areoften not recognized until they are lost or dis-turbed, but they are nevertheless essential to hu-man existence on earth.

2.1.1. Gas regulationLife on earth exists within a narrow band of

chemical balance in the atmosphere and oceans,and any alterations in that balance can havepositive or negative impacts on natural as well associal and economic processes. The chemical com-position of the atmosphere (and oceans) is main-tained by bio-geochemical processes which, inturn, are influenced by many biotic and a-bioticcomponents of natural ecosystems. Important ex-amples are the influence of natural biota on pro-cesses that regulate the CO2/O2 balance, maintainthe ozone-layer (O3), and regulate SOx levels. Themain services provided by the gas regulation func-tion are the maintenance of clean, breathable air,and the prevention of diseases (e.g. skin cancer),i.e. the general maintenance of a habitable planet.

An important issue when trying to determinethe service value from this ecosystem function isthe scale at which the analysis is carried out. Forexample, the influence of 1 hectare of ocean, orforest, as a carbon-sink is difficult to measure.However, the cumulative effect of losing 50% ofthe earth forest-cover, or 60% of the coastal wet-lands, and the reduction of algae-productivity inlarge parts of the oceans due to pollution, on thegas regulation function is considerable.

2.1.2. Climate regulationLocal weather and climate are determined by

the complex interaction of regional and globalcirculation patterns with local topography, vege-tation, albedo, as well as the configuration of, forexample, lakes, rivers, and bays. Due to the green-house-properties of some atmospheric gases, gasregulation (see above) also plays an importantrole in this function, but reflectance properties ofecosystems are also important in determiningweather conditions and climate at various scales.

The services provided by this function relate tothe maintenance of a favorable climate, both atlocal and global scales, which in turn are impor-tant for, among others, human health, crop pro-ductivity, recreation and even cultural activitiesand identity.

2.1.3. Disturbance pre�entionThis function relates to the ability of ecosys-

tems to ameliorate ‘natural’ hazards and disrup-tive natural events. For example, vegetativestructure can alter potentially catastrophic effectsof storms, floods and droughts through its storagecapacity and surface resistance; coral reefs bufferwaves and protect adjacent coastlines from stormdamage. The services provided by this functionrelate to providing safety of human life and hu-man constructions.

2.1.4. Water regulationWater regulation deals with the influence of

natural systems on the regulation of hydrologicalflows at the earth surface. This ecosystem functionis distinct from disturbance regulation insofar asit refers to the maintenance of ‘normal’ conditionsin a watershed and not the prevention of extremehazardous events. Ecosystem services derivedfrom the water regulation function are, for exam-ple, maintenance of natural irrigation anddrainage, buffering of extremes in discharge ofrivers, regulation of channel flow, and provisionof a medium for transportation. A regular distri-bution of water along the surface is, therefore,quite essential, since too little as well as too muchrunoff can present serious problems.

2.1.5. Water supplyThis ecosystem function refers to the filtering,

retention and storage of water in, mainly, streams,lakes and aquifers. The filtering-function is mainlyperformed by the vegetation cover and (soil)biota. The retention and storage capacity dependson topography and sub-surface characteristics ofthe involved ecosystem. The water supply func-tion also depends on the role of ecosystems inhydrologic cycles (see function No. 4), but focusesprimarily on the storage capacity rather than theflow of water through the system. Ecosystem ser-


vices associated with water supply relate to theconsumptive use of water (by households, agricul-ture, industry).

2.1.6. Soil retentionThe soil retention function mainly depends on

the structural aspects of ecosystems, especiallyvegetation cover and root system. Tree roots sta-bilize the soil and foliage intercepts rainfall thuspreventing compaction and erosion of bare soil.Plants growing along shorelines and (submerged)vegetation in near-coastal areas contributegreatly to controlling erosion and facilitatingsedimentation.

The services provided by this function are veryimportant to maintain agricultural productivityand prevent damage due to soil erosion (bothfrom land slides and dust bowls).

2.1.7. Soil formationSoil is formed through the disintegration of

rock and gradually becomes fertile through theaccretion of animal and plant organic matter andthe release of minerals. Soil-formation usually is avery slow process; natural soils are generated at arate of only a few centimeters per century andafter erosion, soil formation (or regeneration)from bedrock takes 100–400 years per cm topsoil(Pimentel and Wilson, 1997).

Ecosystem services derived from soil formationrelate to the maintenance of crop productivity oncultivated lands and the integrity and functioningof natural ecosystems.

2.1.8. Nutrient cyclingLife on earth depends on the continuous

(re)cycling of about 30–40 of the 90 chemicalelements that occur in nature. In addition tocarbon (C), oxygen (O), and hydrogen (H) (whichhave been discussed in the gas-, climate- andwater-regulation services) the most important nu-trients are nitrogen (N), sulfur (S) and phospho-rous (P). Other so-called macro-nutrients arecalcium, magnesium, potassium, sodium and chlo-rine. Furthermore, a large number of so-calledtrace elements are needed to maintain life, includ-ing, for example, iron and zinc. The availability ofthese elements is often a limiting factor to the

growth and occurrence of life forms and constant(re)cycling of these nutrients is, therefore,essential.

Many structural and functional aspects of natu-ral ecosystems facilitate nutrient cycling at localand global scales. For example, soil organismsdecompose organic matter thereby releasing nutri-ents to both local plant growth, but also to theatmosphere; algae in coastal waters perform thissame function. Also, migration (of birds, fish andmammals) plays an important role in the distribu-tion of nutrients between ecosystems.

Ecosystem services derived from nutrient cy-cling are mainly related to the maintenance of‘healthy’ and productive soils. Furthermore, nu-trient cycling plays an important role in the gas-,climate- and water-regulation functions (seeabove).

2.1.9. Waste treatmentTo a limited extent, natural systems are able to

store and recycle certain amounts of organic andinorganic human waste through dilution, assimila-tion and chemical re-composition. Forests, forexample, filter dust particles from the air, andwetlands and other aquatic ecosystems can treatrelatively large amounts of organic wastes fromhuman activities acting as ‘free’ water purificationplants.

2.1.10. PollinationPollination is essential to most plants for repro-

duction, including commercial crops. This ecosys-tem function is provided by many wildpollinator-species (including insects, birds andbats). Without this function, many plant specieswould go extinct and cultivation of most moderncrops would be impossible. The service providedby this function can be derived from the depen-dence of cultivation on natural pollination. With-out wild pollinator species, current levels ofagricultural productivity could only be main-tained at a very high cost through artificial polli-nation (Daily, 1997).

2.1.11. Biological controlAs a result of millions of years of evolutionary

processes, the biotic communities of natural


ecosystems have developed many interactions andfeedback mechanisms that led to more or lessstable life-communities and prevent the outbreakof pests and diseases. According to Ehrlich (1985),natural ecosystems control more than 95% of allthe potential pests of crops and carriers of diseaseto human beings.

2.2. Habitat functions and related ecosystemser�ices

Natural ecosystems provide living space for allwild plant and animal species on earth. Since it isthese species, and their role in the local and globalecosystem that provide most of the functions de-scribed in this paper, the maintenance of healthyhabitats is a necessary pre-condition for the provi-sion of all ecosystem goods and services, directlyor indirectly. The habitat, or refugium function,can be split in two distinct sub-functions, eachproviding different services:

2.2.1. Refugium functionBy providing living space to wild plants and

animals, both for resident and transient (migra-tory species), natural ecosystems are essential tothe maintenance of the biological and geneticdiversity on earth. Natural ecosystems can thus beseen as a ‘storehouse’ of genetic information. Inthis ‘genetic library’ the information of environ-mental adaptations acquired over 3.5 billion yearsof evolution is stored in the genetic material ofmillions of species and sub-species. To maintainthe viability of this genetic library (through evolu-tionary processes), maintenance of natural ecosys-tems as habitats for wild plants and animals isessential.

2.2.2. Nursery functionMany ecosystems, especially coastal wetlands,

provide breeding and nursery areas to specieswhich, as adults, are harvested elsewhere foreither subsistence or commercial pur-poses.Unfortunately, the nursery services of manyecosystems are often unknown or ignored and inmany instances nursery areas are, and have been,transformed to other more direct ‘economic’ useswith disastrous ecological and socio-economic

consequences (e.g. draining of mangrove lagoons)(Gilbert and Janssen, 1997).

2.3. Production functions and related ecosystemgoods and ser�ices

Natural and semi-natural ecosystems providemany resources, ranging from oxygen, water,food, medicinal and genetic resources to sourcesof energy and materials for clothing and building.However, a fundamental distinction should bemade between the use of biotic resources (i.e.products from living plants and animals) andabiotic resources (mainly sub-surface minerals).One important difference between biotic and abi-otic resources is their renewability. Generallyspeaking, biotic resources are renewable, whilemost abiotic resources are not (although it may bepossible to recycle them). In this paper, produc-tion functions are limited to renewable naturalresources.

Over time, humans have learned to manipulatethe biotic productivity of natural ecosystems toprovide certain resources in greater quantitiesthan available under natural conditions. Whendiscussing the contribution of nature to (biotic)production functions, a distinction must, there-fore, be made between products taken directlyfrom nature, like fish, tropical hardwoods, so-called ‘minor’ forest products (e.g. fruits, leaves),and products from cultivated plants and animals.In this paper, biotic production functions arelimited to that part of natural Gross PrimaryProduction that can be harvested on a sustainablebasis and for which people only need to investminimal time, labor and energy to harvest thegoods provided.3

3 One service not included in Table 1 is bio-energy fixationalthough it actually is the most important service provided bynatural ecosystems: without their capacity to convert (mainly)solar energy into biomass there would be no life on earth.Primary Productivity can be used to determine maximumsustainable use levels: as a general rule-of-thumb, not morethan 50% of Gross PP (or 10% of Net PP) should be harvestedby man (Odum, 1971) to maintain the integrity of the support-ing ecosystems.


2.3.1. FoodAlthough today most foods are derived from

cultivated plants and domesticated animals, a sub-stantial part of the global human diet still comesfrom wild plants and animals. Natural ecosystemsare an almost unlimited source of edible plantsand animals, ranging from game and bush meat,fish and fowl, to vegetables, fungi, fruits, and suchexotic items as birds’ nests and sponges. Certainforms of small-scale subsistence farming andaquaculture, with minimal external inputs, canalso be included in this function, as long as it doesnot interfere with the other services provided bythe ecosystem in question. The forest, grasslandor aquatic ecosystem that is partly or temporarilybeing used or converted for food production mustmaintain most, preferably all, other functions orbe able to recover in a reasonable time period.

2.3.2. Raw materialsHere, only renewable biotic resources are taken

into account, such as wood and strong fibers (forbuilding), biochemicals or biodynamic com-pounds (latex, gums, oils, waxes, tannins, dyes,hormones, etc.) for all kinds of industrial pur-poses. Nature also provides many energy re-sources such as fuelwood, organic matter, animalpower and biochemicals (hydrocarbons, ethanol,etc.), and animal-feed (e.g. grass, leaves, krill).Abiotic resources like minerals, fossil fuels, wind-and solar energy are not considered since they areusually non-renewable and/or cannot be at-tributed to specific ecosystems.

2.3.3. Genetic resourcesMany biotic resources which were once col-

lected in the wild are now obtained from culti-vated plants and domesticated animals. Yet, manyimportant crops could not maintain commercialstatus without the genetic support of their wildrelatives. In order to maintain the productivity ofthese cultivars, or to change and improve certainqualities such as taste, resistance to pests anddiseases, and adaptation to certain environmentalconditions, regular inputs of genetic material fromtheir wild relatives and primitive (semi-) domesti-cated ancestors remains essential. These inputsmay vary from simple cross-breeding between

wild and cultivated varieties of important crop-species to complicated manipulations of geneticresources through biotechnological research andgenetic engineering (Oldfield, 1984).

2.3.4. Medicinal resourcesNature contributes to the maintenance of hu-

man health in many ways: by providing chemicalsthat can be used as drugs and pharmaceuticals, orwhich may be used as models to synthesize thesedrugs. Animals are used to test new medicines ormay even serve as medical tools (such as medici-nal leeches (Hirundo medicinalis) which are ap-plied to reduce blood pressure), or as studentspecimens.

2.3.5. Ornamental resourcesThe use of wild plants and animals (and a-bi-

otic resources such as precious minerals andstones) for ornamental purposes is extensive andvaried. Nature provides many kinds of raw mate-rials which are used for fashion and clothing(notably animal skins and feathers), handicrafts(e.g. wood and ebony for carving), and objects ofworship (i.e. products associated with cultural,tribal and religious ceremonies). Wild plants andanimals are also collected and traded as pets orfor decoration (e.g. ornamental plants) in privatehouseholds or to supplement the collections ofzoological and botanical gardens. Many plantsand animals and their products are used andtraded as souvenirs, or as collector’s items (e.g.orchids, butterflies, aquarium fish, birds, feathers,skins, ivory).

2.4. Information functions and related ecosystemgoods and ser�ices

Natural ecosystems provide almost unlimitedopportunities for spiritual enrichment, mental de-velopment and leisure. Because, the longest periodof human evolution took place within the contextof undomesticated habitat, the workings of thehuman brain for gathering information and asense of well-being are very strongly tied to theexperience of natural landscapes and species di-versity (Gallagher, 1995). Nature is, therefore, avital source of inspiration for science, culture and


art, and provides many opportunities for educa-tion and research. As Forster (1973) put it already25 years ago: ‘...natural environments provide ahighly inspirational and educative form of re-cre-ative experience, with opportunities for reflection,spiritual enrichment and cognitive developmentthrough exposure to life processes and naturalsystems’.

2.4.1. Aesthetic informationMany people enjoy the scenery of natural areas

and landscapes which is reflected in, for example,the preference many people have for living inaesthetically pleasing environments and the de-marcation of ‘scenic roads’. Aesthetic informationcan have considerable economic importance, forexample, through the influence on real estateprices: houses near national parks or with a niceocean view are usually much more expensive thansimilar houses in less favored areas (Costanza etal., 1997).

2.4.2. Recreation and (eco)tourismNatural ecosystems have an important value as

a place where people can come for rest, relax-ation, refreshment and recreation. Through theaesthetic qualities and almost limitless variety oflandscapes, the natural environment providesmany opportunities for recreational activities,such as walking, hiking, camping, fishing, swim-ming, and nature study. With increasing numbersof people, affluence and leisure-time, the demandfor recreation in natural areas (‘eco-tourism’) willmost likely continue to increase in the future.

2.4.3. Cultural and artistic inspirationNature is an important basis for folklore and

culture as humans have developed different meansof coping and interacting with nature. In otherwords, human culture is embedded within naturalsystems. Without nature, life would be very dullindeed or, as Van Dieren and Hummelinck (1979)state: ‘There is hardly any province of culture towhich nature does not give shape or inspiration’.Nature is used as a motive and source of inspira-tion for books, magazines, film, photography,paintings, sculptures, folklore, music and dance,national symbols, fashion, architecture, advertis-

ing, etc. Interestingly, although we are almostconstantly using nature for all these (and other)purposes, we do not seem to be very conscious ofthis service and there is very little quantitativeinformation on the economic value of all theseactivities in literature.

2.4.4. Spiritual and historic informationNatural ecosystems and natural elements (such

as ancient water falls or old trees) provide a senseof continuity and understanding of our place inthe universe which is expressed through ethicaland heritage-values. Also religious values placedon nature (e.g. worship of holy forests, trees oranimals) fall under this function-category.

2.4.5. Scientific and educational informationNatural ecosystems provide almost unlimited

opportunities for nature study, environmental ed-ucation (e.g. through excursions) and function as‘field laboratories’ for scientific research, leadingto thousands of publications each year. Naturalareas also serve as important reference areas formonitoring environmental change.

3. Valuing ecosystem functions, goods andservices

The importance (or ‘value’) of ecosystems isroughly divided into three types: ecological, socio-cultural and economic value (see Fig. 1). Thepapers by Farber et al. (2002), Limburg et al.(2002), Howarth and Farber (2002), Wilson andHowarth (2002) discuss these three concepts ofvalue in more detail. In this paper we focus on thelinkages between these valuation methods and thegoods and services identified in the previoussection.

3.1. Ecological �alue

To ensure the continued availability of ecosys-tem functions, the use of the associated goods andservices should be limited to sustainable use levels.The capacity of ecosystems to provide goods andservices depends on the related ecosystem pro-cesses and components providing them (column 2


in Table 1) and the limits of sustainable use aredetermined by ecological criteria such as in-tegrity, resilience, and resistance. The ‘EcologicalValue’ or importance of a given ecosystem is,therefore, determined both by the integrity of theRegulation and Habitat Functions of the ecosys-tem and by ecosystem parameters such as com-plexity, diversity, and rarity (De Groot et al.,2000). Since most functions and related ecosys-tem processes are inter-linked, sustainable uselevels should be determined under complex sys-tem conditions (see Limburg et al., 2002), takingdue account of the dynamic interactions betweenfunctions, values and processes (Boumans et al.,2002).

3.2. Socio-cultural �alue

In addition to ecological criteria, social values(such as equity) and perceptions play an impor-tant role in determining the importance of natu-ral ecosystems, and their functions, to humansociety (see Fig. 1). In a report by English Na-ture (1994), social reasons are mentioned as play-ing an important role in identifying importantenvironmental functions, emphasizing physicaland mental health, education, cultural diversityand identity (heritage value), freedom and spiri-tual values. Natural systems are thus a crucialsource of non-material well-being and indispens-able for a sustainable society (Norton, 1987).The socio-cultural value mainly relates to theInformation Functions (see Table 1).

3.3. Economic �alue

Economic valuation methods fall into four ba-sic types, each with its own repertoire of associ-ated measurement issues: (1) direct marketvaluation, (2) indirect market valuation, (3) con-tingent valuation, (4) group valuation.

3.3.1. Direct market �aluationThis is the exchange value that ecosystem ser-

vices have in trade, mainly applicable to the‘goods’ (i.e. production functions) but also someinformation functions (e.g. recreation) and regu-lation functions: New York City, for example,

has sought to use natural water regulation ser-vices of largely undeveloped watersheds, throughpurchase or easements, to deliver safe water andavoided a $6 billion water filtration plant. Thisimplies those watersheds are worth up to $6 bil-lion to New York City. Wetlands trading pro-grams allow property owners to capitalize on thedemand for wetlands banks, with wetlands beingsold in banks for $74 100–$4 93 800 per ha (Pow-icki, 1998).

3.3.2. Indirect market �aluationWhen there are no explicit markets for ser-

vices, we must resort to more indirect means ofassessing values. A variety of valuation tech-niques can be used to establish the (revealed)Willingness To Pay (WTP) or Willingness ToAccept compensation (WTA) for the availabilityor loss of these services.� Avoided Cost (AC): services allow society to

avoid costs that would have been incurred inthe absence of those services. Examples areflood control (which avoids property damages)and waste treatment (which avoids healthcosts) by wetlands.

� Replacement Cost (RC): services could be re-placed with human-made systems; an exampleis natural waste treatment by marshes whichcan be (partly) replaced with costly artificialtreatment systems.

� Factor Income (FI): many ecosystem servicesenhance incomes; an example is natural waterquality improvements which increase commer-cial fisheries catch and thereby incomes offishermen.

� Travel Cost (TC): use of ecosystem servicesmay require travel. The travel costs can be seenas a reflection of the implied value of theservice. An example is recreation areas thatattract distant visitors whose value placed onthat area must be at least what they werewilling to pay to travel to it.

� Hedonic Pricing (HP): service demand may bereflected in the prices people will pay for asso-ciated goods; an example is that housing pricesat beaches usually exceed prices of identicalinland homes near less attractive scenery.


3.3.3. Contingent �aluation (CV)Service demand may be elicited by posing hypo-

thetical scenarios that involve the description ofalternatives in a social survey questionnaire. Forexample, a survey questionnaire might ask re-spondents to express their willingness to pay (i.e.their stated preference as opposed to revealedpreference, see above) to increase the level ofwater quality in a stream, lake or river so thatthey might enjoy activities like swimming, boat-ing, or fishing (Wilson and Carpenter, 1999).

3.3.4. Group �aluationAnother approach to ecosystem service valua-

tion that has gained increasing attention recentlyinvolves group deliberation (Wilson andHowarth, 2002; Jacobs, 1997; Sagoff, 1998).Derived from social and political theory, this val-uation approach is based on principles of deliber-ative democracy and the assumption that publicdecision making should result, not from the ag-gregation of separately measured individual pref-erences, but from open public debate.

As the extensive literature on ecosystem servicevaluation has shown, each of these methods hasits strengths and weaknesses (see Farber et al.,2002; Wilson and Howarth, 2002). Based on asynthesis study by Costanza et al. (1997), usingover 100 literature studies, Table 2 gives anoverview of the link between these valuationmethods and the 23 functions described in thispaper.

Table 2 shows that for each ecosystem functionusually several valuation methods can be used.The table also shows that in the Costanza study(Costanza et al., 1997) for each function usuallyonly one or two methods were used primarily.There also seems to be a relationship between themain type of function and the preferred valuationmethods: Regulation Functions were mainly val-ued through Indirect Market Valuation tech-niques (notably Avoided Cost and ReplacementCost), Habitat Functions mainly through DirectMarket Pricing (i.e. money donated for conserva-tion purposes), Production Functions through Di-rect Market Pricing and Factor Income methods,and Information Functions mainly through Con-tingent Valuation (cultural and spiritual informa-

tion), Hedonic Pricing (aesthetic information) andMarket Pricing (recreation, tourism and science).

To avoid double counting, and to make valua-tion studies more comparable, ideally a type of‘rank ordering’ should be developed to determinethe most preferred valuation method(s). Table 2can be seen as a first attempt for such a rankordering, but much more research is needed.

4. Discussion

We have attempted to provide a comprehensiveand consistent overview of all functions, goodsand services provided by natural and semi-naturalecosystems, and we have described their linkageswith available valuation methods. From this anal-ysis it shows that there are several importanttheoretical and empirical issues that remain to beresolved.1. Ecological functions and services can overlap,

leading to the possibility of economic ‘double-counting’. For example, gas-regulation func-tions (and associated services) have influenceon the climate and can, therefore, be valuedseparately, or as an integral part of the climateregulation service. Similar problems can occurwhen accounting for ‘disturbance prevention’and ‘water regulation’ services: excessiverunoff can lead to flooding and thereby largerdisturbances. The interconnectedness of cer-tain ecological functions, and associatedecosystem services, highlights the need for thedevelopment of dynamic models that take ac-count of the interdependencies between ecosys-tem functions, services and values (seeBoumans et al., 2002).

2. By matching the proposed typology againstthe best available valuation methods, we haveshown that for all types of ecosystem functionsit is possible, in principle, to arrive at a mone-tary estimation of human preferences for theavailability and maintenance of the relatedecosystem services. However, while several val-uation methods can be used alongside eachother (Table 2), it may ultimately be necessaryto identify a rank ordering from the least tomost preferred valuation methods for each


Tab

le2

Rel

atio

nshi

pbe

twee

nec

osys

tem

func

tion

san

dm

onet

ary

valu

atio

nte

chni

ques

Ran

geof

Gro

upD

irec

tm

arke

tE

cosy

stem

Indi

rect

mar

ket

pric

ing

Con

ting

ent

valu

atio

npr

icin

gbva

luat

ion

func

tion

s(a

ndm

onet

ary

Avo

ided

cost

valu

esin

Rep

lace

men

tas

soci

ated

Fac

tor

inco

me

Tra

vel

cost

Hed

onic

US$

/ha

year

apr

icin

gco

stgo

ods

and

serv

ices

(see

Tab

le1)

Reg

ulat

ion

func

tion

s0

0+

++

01.

Gas

7–26

50

regu

lati

on88

–223

00

00

2.C

limat

e+

++

regu

lati

on0

0+

3.D

istu

rban

ce0

2–72

40+

++

++

regu

lati

on+

++

00

++

02–

5445

04.

Wat

er+

regu

lati

on3–

7600

++

00

00

0+

++

5.W

ater

0su

pply

00

00

6.So

il29

–245

++

++

+re

tent

ion

00

++

+0

1–10

07.

Soil

form

atio

n87

–21

100

++

+0

00

8.N

utri

ent

0cy

clin

g0

0+

+9.

Was

te0

58–6

696

0+

++

trea

tmen

t0

0+

++

14–2

5+

+10

.P

ollin

atio

n+

0+

++

2–78

++

00

+0

11.

Bio

logi

cal

cont

rol

Hab

itat

func

tion

s0

0+

+0

12.

Ref

ugiu

m+

++

3–15

230

func

tion

142–

195

00

00

0+

++

13.

Nur

sery

0fu

ncti

onP

rodu

ctio

nfu

ncti

ons

+0

0+

++

++

14.

Foo

d6–

2761

06–

1014

++

+0

++

+15

.R

awm

ater

ials


Tab

le2

(Con

tinu

ed).

Ran

geof

Indi

rect

mar

ket

pric

ing

Con

ting

ent

Eco

syst

emD

irec

tm

arke

tG

roup

func

tion

sva

luat

ion

mon

etar

yva

luat

ion

pric

ingb

valu

esin

(and

asso

ciat

edU

S$/h

aA

void

edco

stR

epla

cem

ent

Fac

tor

inco

me

Tra

vel

cost

Hed

onic

cost

pric

ing

good

san

dye

ara

serv

ices

(see

Tab

le1)

16.

Gen

etic

++

6–11

20

0+

++

0re

sour

ces

00

++

00

17.

Med

icin

al+

++

reso

urce

s0

3–14

5+

+0

00

++

+18

.O

rnam

enta

lre

sour

ces

Info

rmat

ion

func

tion

s0

++

+0

19A

esth

etic

07–

1760

0in

form

atio

n+

++

++

++

+0

++

+2–

6000

20R

ecre

atio

nan

dto

uris

m0

21C

ultu

ral

and

00

++

+0

0ar

tist

icin

sp.

00

++

+0

22Sp

irit

ual

and

1–25

hist

oric

inf.

023

Scie

nce

and

00

0+

++

educ

atio

n

aD

olla

rva

lues

are

base

don

Cos

tanz

aet

al.

(199

7)an

dap

ply

todi

ffer

ent

ecos

yste

ms

(e.g

.w

aste

trea

tmen

tis

mai

nly

prov

ided

byw

etla

nds

and

recr

eati

onal

bene

fits

are,

ona

per

hect

are

basi

s,hi

ghes

tin

cora

lre

efs)

.In

the

colu

mns

,th

em

ost

used

met

hod

onw

hich

the

calc

ulat

ion

was

base

dis

indi

cate

dw

ith

++

+,

the

seco

ndm

ost

wit

h+

+,

etc.

;op

enci

rcle

sin

dica

teth

atth

atm

etho

dw

asno

tus

edin

the

Cos

tanz

ast

udy

but

coul

dpo

tent

ially

also

beap

plie

dto

that

func

tion

.b

Bas

edon

adde

dva

lue

only

(i.e

.m

arke

tpr

ice

min

usca

pita

lan

dla

bor

cost

s(t

ypic

ally

abou

t80

%).


service to avoid double counting and enhancedata comparability. While the resolution ofthis problem is beyond the scope of this paper,our analysis can serve as a useful startingpoint for future investigations, both with re-spect to gathering new, empirical data in aconsistent manner, and by providing a frame-work for analyzing and processing existinginformation as input in data base development(Villa et al., 2002).

The proposed framework, in combination withsuch a comprehensive data base of ecosystemservices and values, can help identify informationgaps in the literature and could serve as a launch-ing point for future collaboration and researchstrategies in the field of ecosystem service valua-tion. Once operational, it would be an importanttool for more integrated cost-benefit analysis andgreatly enhance more balanced decision-makingregarding the sustainable use and conservation ofnatural ecosystems and their many goods andservices.

Acknowledgements

This work was conducted as part of the Work-ing Group on the Value of the World’s EcosystemServices and Natural Capital; Toward a Dynamic,Integrated Approach supported by the NationalCenter for Ecological Analysis and Synthesis, aCenter funded by NSF (Grant cDEB-0072909),the University of California, and the Santa Bar-bara campus. Additional support was also pro-vided for the Postdoctoral Associate, Matthew A.Wilson, in the Group.

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