Economics of Ecosystem Services

Abstract

A better appreciation of the value of ecosystem services produced on private lands opens the door to programs that offer incentives to landowners and managers for specific conservation and production practices. This chapter reviews studies of ecosystem services provided by oak woodlands in California and Spain, focusing on those that may be difficult to quantify and value, and therefore are often undervalued in decision-making processes drawing on economic analysis. We first examine how ecosystem services are defined and valued, and then review research done from an economic perspective in California ranch and Spanish dehesa oak woodlands. We conclude with a brief exploration of differences in institutions and policies that bear on oak woodland ecosystem services in these two regions. The next step in ecosystem service valuation and use in policy is to extend case studies and to undertake analyses at the regional, state, and nation-wide scales. Despite scientific advances, the need for preservation of the natural capital of oak woodlands and the many ecosystem services the woodlands provide is far from fully recognized by society. An important future policy task will be incorporating payments for provision of biodiversity and ecosystem services into agricultural, water, energy, and other policies.