The Economic Value of Ecosystem Services

Ecosystem ServicesIn recent years, there has been a marked increase in studies and reports that seek to attach a dollar value to “ecosystem services” provided by protected natural areas. Because traditional “markets” do not exist for these services, researchers must use indirect means of assessing values. These techniques include calculating costs such as the downstream damage that would occur without intact riparian buffers, or the water treatment necessary to replace the natural waste assimilation of wetlands.

The primary ecosystem services accounted for in these studies include:

Water Supply – Land cover such as forests and wetlands and their underlying soils help ensure that rainwater is stored and released gradually rather than being allowed to immediately flow downstream as runoff. This natural system provides for the continuous recharge of streams, reservoirs, and aquifers, providing a fresh and clean water supply.

Water Quality – Forests and wetlands provide a natural protective buffer between human activities and water supplies. This buffer prevents pathogens, excess nutrients, metals, and sediments from negatively impacting water supplies and marine resources.

Disturbance Prevention – Many natural landscapes can provide a buffer from disturbance events. For example, coastal vegetation can reduce the damage of wave action and storm surges, and wetlands and floodplains can help reduce the impact of floods by trapping and containing storm water.

Air Quality – Trees offer the ability to remove significant amounts of air pollution and consequently improve environmental quality and human health. In particular, trees have been found to remove significant amounts of nitrogen dioxide, sulfur dioxide, carbon monoxide, ozone, and particulate matter.

Carbon Sequestration – Trees and other vegetation mitigate the impacts of climate change by sequestering and storing atmospheric carbon from carbon dioxide.

The results of such studies are stunning. For example, a 2010 report on “The Economic Value of Protected Open Spaces in Southeastern Pennsylvania,” determined that approximately 200,000 acres of protected open space in that region (including 100,000 acres of protected private lands) contributed an estimated $132.5 million in annual cost savings and economic benefits through the provision of six ecosystem services: water supply ($50.2m), water quality ($10.9m), flood mitigation ($37.5m), wildlife habitat ($16.9m), air pollution removal ($15.1m), and carbon sequestration ($1.9m).

A 2011 report done for the Piedmont Environmental Council in Virginia, estimated that its more than 700,000 acres of private lands under conservation easement in that state provide $259 million in annual cost savings in 5 out of 6 of these same categories (the Virginia study did not include air pollution removal). The Virginia study reviewed over 100 articles and policy papers to produce per-acre value benefits. Some of the per-acre values used in the Virginia study were, for water supply benefits, $20/acre/year for forestland and $485/acre/year for wetlands (including forested wetlands); and, for water quality, $238/acre/year for forestland and $1,278/acre/year for wetlands.

The numbers provided above do not even include other economic benefits of protected lands, such as recreational value, forest and farm product value, and the effect that they have on the value of nearby residential properties and real estate taxes, all of which also have been extensively studied. The hope is that all these economic studies will continue to add to the public’s understanding of real financial benefit of protecting natural areas.