Economic valuation of ecosystem services

© istockphoto.com/PaulCowan

The process of valuing ecosystem services - what nature does for people - is an important aspect of the ecosystem approach.

Valuation is not just about money. This especially the case when it comes to people's relationship with nature and all the benefits involving nature that they enjoy. There is, nonetheless, increasing interest among many in: 

  • Finding ways to better reflect in markets the extent of what nature does for people.
  • Ensuring that decisions which routinely involve monetary considerations lead to improved recognition of what nature does for people.

This page provides links to tools and guidelines that help those involved in the economic valuation of ecosystem services at the local and landscape scale (such as local authority regions and river catchments). Separate pages on this website consider local economic development and the environment and the role of rural surveyors and valuers.

For information on economic valuation of nature more generally, see the the 'Valuing our environment' webpage of Scottish Natural Heritage, the 'Valuing ecosystem services' section of HM Government's webpage on ecosystem services, the work of the Natural Capital Committee for England and the outputs of the Valuing Nature Network. The UK National Ecosystem Assessment contains detailed analysis of the economic valuation of what nature does for people people at the national and regional scale throughout the UK. 

Markets and payments for ecosystem services

Payments for Ecosystem Services (PES) is a term used to describe a range of schemes through which the beneficiaries, or users, of ecosystem services provide payment to the stewards, or providers, of those services. Visit the pages that describe PES, with links to project examples.

Tools and guidelines relevant to valuing ecosystem services at the local and landscape scale

Micro-Economic Benefits of Investment in the Environment

This literature review was conducted by Natural England to help its staff make the case for the natural environment to decision makers such as local authorities and Local Enterprise Partnerships. This review provides evidence about the economic benefits of the natural environment in an accessible format.  It is focused around 'green infrastructure' interventions and is structured around the ecosystem approach.

Valuing ecosystem services in lowlands

In 2012, Natural England has published a report on valuing ecosystem services in lowlands. This describes six case studies throughout England, including urban fringe settings. The case studies complement an existing suite of Environment Agency case studies focused on river and coastal projects: River Tamar (Cornwall) and Alkborough Flats (Humber Estuary), the River Glaven, North Norfolk (a sea trout restoration project) and the Bristol Avon.

Valuing ecosystem services in uplands

In 2001, Natural England published a report on valuing ecosystem services in upland areas. This complements the valuation work undertaken within the upland ecosystem service pilots.

Valuing ecosystem services of forests

A scoping study on the valuation of ecosystem services from forests across Great Britain, initiated by the Forestry Commission, is available.

Assessing socio-economic benefits of nature conservation sites

A 'toolkit' to assess the socio-economic benefits of Natura 2000 sites has been produced by the Institute for European Environmental Policy. While it is designed to assist managers of sites with the Natura 2000 nature conservation designation, the authors identify its potential use to those evaluating socio-economic benefits of other areas of land.  The toolkit provides guidance on how to determine specific monetary values of individual benefits provided by a site. A separate project has been undertaken to investigate the economic benefits of conservation measures carried out in Natura 2000 areas

Assessing the value of ecosystem services provided by green infrastructure

A study undertaken on behalf of the Birmingham and Black Country Wildlife Trust illustrates how ecosystem services provided by the woodland, heathland and wetland in a metropolitan area can be valued in monetary terms.

INVEST (Natural Capital Project)

InVEST is a collection of tools to map and value ecosystem services and goods, that was the subject of Ecosystems Knowledge Network workshops in 2013. It currently requires Geographical Information Systems software and skills. While experience in the UK is limited, it is applicable at the local and landscape scale. It is being trialed by research centres in the UK - contact the Ecosystems Knowledge Network team to find out more.

TESSA (Toolkit for Ecosystem Service Site-based Assessment)

The Toolkit for Ecosystem Service Site-based Assessment (TESSA) has been launched by a number of partners including BirdLife International and UNEP-WCMC. The tool, which is intended to inform strategic land use decisions, can be applied to all terrestrial and wetland habitats (currently excluding marine areas). It has been trialed at Wicken Fen in East Anglia (see below), and is also being piloted by RSPB at other sites in England and Scotland.

Practical experiences

The following resources are examples of the work of place-based projects that have attempted monetary valuation of ecosystem services in specific landscapes.

  • Wicken Fen Vision project. A partnership of academic and charitable organisations have used the Toolkit for Ecosystem Service Site-based Assessment to evaluate ecosystem service benefits associated with a long-term initiative to convert drained, intensively farmed arable land to wetland. The land is owned by the National Trust. An open-access journal paper provides more information on the economic analysis, which suggested an annual net gain to society equivalent to US$199 per hectare per year following a one-off investment equivalent to US$ 2,320 per hectare.
  • The Keighley and Watersheddles Catchment project estimated the value for the ecosystems services provided under different land use and management scenarios for the Keighley Moor and Watersheddles catchment and compared these with the potential costs. 
  • The Lewes and Ouse Valley eco-nomics Group is engaging local people in the valuation of nature to increase awareness of ecosystem services as a step towards sustainable development. This project is profiled on elsewhere on this website and was the subject of a field visit in June 2014.
  • A valuation of marginal changes in ecosystem services assessed as likely to result from the Steart Coastal Management Project in Somerset (England) has been undertaken. An annual benefit range of £491,155 to £913,752 has been deduced.
  • The Valuing Ecosystem Services in the East of England – Arable Land Pilot evaluated ecosystems services provided by four arable farms and developed tools to help people work out their preferred balances of ecosystem services. 

Network resources

  • The 4th issue of Ecosystems News, the Network newsletter, featured several articles on valuation, including a perspective from Paul Morling, Head of Economics at RSPB, on why valuing nature will help to conserve it. A viewpoint article, 'Engaging with the Valuation Challenge' was written by Robert Fish (University of Exeter) for the 3rd issue of Ecosystems News.
  • An introductory webinar co-organised with NERC’s Valuing Nature Network took place on 11 February 2013. This explored practical approaches to valuation at the local level.
  • Two one-day workshops offering an introduction to InVEST, a family of tools to map and value ecosystem services produced by the Natural Capital Project in the United States took place in March 2013.
  • Workshops on payments for ecosystem services schemes in Bristol (May 2013) and Manchester (November 2013).