ESV Measurement——The Opportunity Cost of Land Development

Abstract

Ecological systems are essential in maintaining a good living environment for human beings. However, human beings usually focus on the benefits they can gain from the ecosystem by developing the land and ignore the degradation of environment. In this paper, we will offer an ecological services evaluation model to measure the value of ecological services and provide land use planners with a method to compute the true economic costs of the land use development projects. First, we define ecological services value (ESV), which means the value of the benefits that ecosystem can provide. Then, we classify the functions of ecosystem into five kinds: water purification, climate regulation, air purification, biodiversity conservation and vegetation conservation. For each function, we choose a related index to measure the performance. After the classification, we adopt Analytical Hierarchy Process (AHP) to calculate the weight for each of the function and do the consistency test; second, we apply knowledge of economics to study the true economic costs; third, after getting the equation of the true economic costs, we realize it in the cost-benefit analysis. We offer two case studies to analyze the small community-sized project and large national project respectively; fourth, we take ten examples including U.S., Switzerland and China to apply our model in practice. We fit data and find the average level of land use percent over time, and form a model with differential equation in order to calculate the time-varying model of ESV; fifth, we focus on humanities field to explore the impacts on land use project planners and managers. They should not only be responsible for environmental degradation and monitor environmental index carefully, but also pay for the benefits which were ever owned by human beings before land development. In order to make our work more accurate and complete, we use SWOT Analysis across the analytical process. Finally, we promote our model and extend the factors from six to twelve, which increases the accuracy.