Newsletter Subscribe
Enter your email address below and subscribe to our newsletter
What are Ecosystem Services?
Ecosystem Services are the benefits that humans derive from natural ecosystems. These services support economic activity, human well-being, and environmental sustainability by providing essential goods, regulating natural processes, and enriching social and cultural life.
Definition
Ecosystem Services are the direct and indirect contributions of ecosystems to human welfare and economic systems.
Key Takeaways
- Link natural ecosystems to economic and social value.
- Support production, livelihoods, and quality of life.
- Often undervalued or excluded from traditional economic measures.
- Central to sustainability, environmental policy, and long-term development.
Understanding Ecosystem Services
Ecosystem services highlight how nature underpins economic systems. Healthy ecosystems provide clean water, fertile soil, climate regulation, and biodiversity, all of which are essential for agriculture, industry, and human health.
When ecosystems are degraded, the loss of services can impose significant economic costs, such as increased disaster risk, reduced agricultural productivity, or higher healthcare expenses. Recognizing ecosystem services helps integrate environmental considerations into economic decision-making.
Businesses and governments increasingly account for ecosystem services when assessing risk, resilience, and sustainability strategies.
Formula (If Applicable)
There is no single formula for ecosystem services, but valuation approaches include:
- Market pricing of ecosystem goods
- Avoided cost and replacement cost methods
- Contingent valuation and willingness-to-pay surveys
These methods help estimate the economic value of ecosystem services.
Real-World Example
Mangrove forests protect coastal communities by reducing storm surge and erosion. The avoided damage to infrastructure represents a valuable regulating ecosystem service.
This example illustrates how natural systems provide economic protection and resilience.
Importance in Business or Economics
Ecosystem Services are increasingly relevant to economic planning, risk management, and sustainability reporting. Businesses depend on ecosystem services through supply chains, resource availability, and climate stability.
For policymakers, valuing ecosystem services supports better land-use planning, conservation policy, and investment in natural capital.
Types or Variations (If Relevant)
- Provisioning Services: Food, water, timber, and raw materials.
- Regulating Services: Climate regulation, flood control, and disease regulation.
- Cultural Services: Recreation, tourism, and cultural heritage.
- Supporting Services: Nutrient cycling and soil formation.
Related Terms
- Natural Capital
- Environmental Economics
- Sustainable Development
Sources and Further Reading
- Millennium Ecosystem Assessment
- World Bank – Natural Capital Accounting
- OECD – Ecosystem Services
Quick Reference
- Key Concept: Nature’s contribution to human well-being.
- Primary Use: Sustainability and environmental policy analysis.
- Limitation: Valuation can be complex and uncertain.
Frequently Asked Questions (FAQs)
Why are ecosystem services important to the economy?
They support production, reduce risks, and provide benefits that would be costly or impossible to replace artificially.
Can ecosystem services be measured economically?
Yes, though measurement is complex and often relies on indirect valuation methods.
How do ecosystem services affect businesses?
They influence resource availability, operational risk, regulatory exposure, and long-term resilience.
