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Ecosystem Services

Ecosystem goods and services

Humans have always depended on nature for environmental assets like clean water, nutrient cycling and soil formation. These have been called by different names through human history, but are presently gaining global attention as ‘ecosystem services‘. Gretchen Daily has defined ecosystem services as “the conditions and processes through which natural ecosystems, and the species that make them up, sustain and fulfil human life” (Daily, 1997). They maintain biodiversity and the production of ecosystem goods, such as seafood, forage, timber, biomass fuels, natural fibre, and many pharmaceuticals, industrial products and their precursors. The harvest and trade of these goods represents an important and familiar part of the human economy. In addition to the production of goods, ecosystem services include life-support functions, such as cleansing, recycling and renewal, and they confer many intangible aesthetic and cultural benefits as well (Daily, 1997).

Ecosystem services transform natural assets (soil, plants and animals, air and water) into things that we value. For example, when fungi, worms and bacteria transform the raw ‘ingredients’ of sunlight, carbon and nitrogen into fertile soil, this provides an ecosystem service. Some authors distinguish ecosystem functions from services. Ecosystem functions can be defined as “the capacity of natural processes and components to provide goods and services that satisfy human needs, directly or indirectly” (de Groot, 1994; de Groot et al., 2002). Accordingly, four different categories of ecosystem functions can be distinguished:

- Regulation functions: that relate to the capacity of natural and semi-natural ecosystems to regulate essential ecological processes and life support systems through bio-geochemical cycles and other biospheric processes. In addition to maintaining ecosystem (and biosphere) health, these regulation functions provide many services that have direct and indirect benefits to humans (such as clean air, water and soil, and biological control services).

- Habitat functions: natural ecosystems provide refuge and reproduction habitats to wild plants and animals and thereby contribute to the conservation of biological and genetic diversity and evolutionary processes.

- Production functions: photosynthesis and nutrient uptake by autotrophs (organisms such as plants or algae that produce their own food, such as carbohydrates, fats or proteins, using photosynthesis or inorganic chemical reactions) converts energy, carbon dioxide, water and nutrients into a wide variety of carbohydrate structures, which are then used by secondary producers to create an even larger variety of living biomass. This broad diversity in carbohydrate structures provides many ecosystem goods for human consumption, ranging from food and raw materials to energy resources and genetic material.

- Information functions: because most of human evolution has taken place within the context of undomesticated habitat, natural ecosystems provide an essential ‘reference function‘ and contribute to the maintenance of human health by providing opportunities for reflection, spiritual enrichment, cognitive development, recreation and aesthetic experience.

Evolution and policy uptake of the concept

The concept of ecosystem services was introduced in the late 1970s and 80s by authors such as Westman (1977) and Erlich and Erlich (1981), building on earlier literature highlighting the societal value of nature’s functions. Mooney and Ehrlich (1997) coined the term ‘environmental services‘ in the report The Study of Critical Environmental Problems (SCEP, 1970) identifying services such as pest control, insect pollination, fisheries, climate regulation, soil retention and flood control. The initial rationale behind the use of the ecosystem service concept was mainly pedagogic, and it was used mostly by natural scientists to demonstrate how biodiversity loss directly affected ecosystem functions underpinning critical services for human well-being, thus aiming at triggering action for nature conservation (Gómez-Baggethun et al., 2010).

The paper by Costanza et al. (1997) on the value of the global natural capital and ecosystem services was a milestone in the mainstreaming of ecosystem services. The monetary figures presented resulted in a high impact in both science and policy making, manifested both in terms of criticisms and in increasing the development and use of monetary valuation studies (Gómez-Bagethun et al., 2010). The term ‘ecosystem services‘ gained even more popularity and policy relevance, with the publication of the Millennium Ecosystem Assessment (MA), a four-year study involving more than 1300 scientists worldwide. Sponsored by the United Nations, it adopted a conceptual framework clearly linking ecosystem services to human well-being (MA, 2003). The MA concluded that over half of the world‘s ecosystem services are being degraded or used unsustainably (MA, 2005). The publication of this assessment placed the concept of ecosystem services at the top of biodiversity policy agenda and has led to an exponential increase in the publication of ecosystem valuation studies. Currently, The Economics of Ecosystems and Biodiversity (TEEB) is a major international initiative to evaluate the costs of biodiversity loss and the associated decline in ecosystem services worldwide, comparing them with the costs of effective conservation and sustainable use.


Growing awareness of the value of ecosystem services, and of the costs associated with their loss, has led to the development of programs and policy initiatives based on the establishment of markets for ecosystem services and in the implementation of payment for ecosystem services (PES) schemes. In spite of the success of some policy initiatives and of the effectiveness of the use of the term ‘ecosystem services‘ for communication purposes, some authors raise concerns regarding the perverse effects of this commodification of nature. For example, Peterson et al. (2010) point to the risks of decoupling of ecosystem function from service, in that many people may be aware of the economic value of a given ecosystem service without recognising human dependence on local and global ecosystems and on their functioning. The spread of the ecosystem service concept has in practice set the stage for the perception of ecosystem functions as exchange values that could be subject to monetisation and sale, with profound ethical and practical implications (Gómez-Baggethun et al., 2009).


Costanza, R., d‘Arge, R., de Groot, R., Farber, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., O‘Neill, R. V., Paruelo, J., Raskin, R. G., Sutton, P., van den Belt, M. (1997) The value of the world‘s ecosystem services and natural capital, Nature, 387, 253-260.

Daily, G. (1997) Introduction: What Are Ecosystem Services? in Daily, G. (ed), Nature‘s Services. Societal Dependence on Natural Ecosystems, Island Press, Washington DC.

de Groot, R. (1994) Environmental functions and the economic value of natural ecosystems. In: A.M. Jansson, (Editor), Investing in Natural Capital: The Ecological Economics Approach to Sustainability, Island Press, pp. 151–168.

de Groot, R., Wilson, M., Boumans, R. (2002) A typology for the classification, description and valuation of ecosystem functions, goods and services, Ecological Economics, 41: 393-408.

Ehrlich, P. R., Ehrlich. A. (1981) Extinction: The Causes and Consequences of the Disappearance of Species. Random House, New York.

Gómez-Baggethun, E., de Groot, R., Lomas, P., Montes, C. (2010) The history of ecosystem services in economic theory and practice: From early notions to markets and payment schemes. Ecological Economics, 69 (6): 1209–1218.

Millennium Ecosystem Assessment, MA (2003) Ecosystems and Human Well-being: A Framework for Assessment. Island Press, Washington, DC.

Millennium Ecosystem Assessment, 2005. Ecosystems and Human Well-being: Synthesis. Island Press, Washington, DC.

Mooney, H., Ehrlich, P. (1997) Ecosystem services: A fragmentary history. in Daily, G. (edt), Nature‘s Services. Societal Dependence on Natural Ecosystems, Island Press, Washington DC.

Peterson, M., D. Hall, A. Felspausch-Parker, T. R. Peterson, 2010. Obscuring ecosystem function with application of the ecosystem services concept, Conservation Biology, 24, 1, 113-119.

Study of the Critical Environmental Problems (SCEP), 1970. Man‘s impact on the global environment. MIT Press, Cambridge, MA.

Westman, W. (1977) How much are nature‘s services worth? Science, 197, 960-964.

Useful websites

Millennium Ecosystem Assessment []

The Economics of Ecosystems and Biodiversity []

This glossary entry is based on a contribution by Paula Antunes

EJOLT glossary editors: Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos

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