Introduction to Ecosystem Services

mountain stream

The concept of human welfare depending on environmental health has long been apparent in human thought and existence. From the earliest examples of humans being totally reliant on their resources at hand for survival to more recent and nuanced benefits and services such as clean air and water, the importance of these products has been recognized. In modern times, this collection of services provided to humans has taken the name of ecosystem services. A specific definition for ecosystem services has been thoroughly debated, though most have made the critical point of humans obtain benefits from ecosystems. The Millennium Ecosystem Assessment defined ecosystem services as, “the benefits people obtain from ecosystems” (MEA 2005) providing a clear, concise definition that has gained acceptance.

Natural Capital

Classical economic theory recognizes human, financial, manufactured, and natural as the four types of capital (Chee 2004). In the case of ecosystem services, current developed economies are trying to transform natural capital into consumer products and services (Hawken et al. 1999). Proponents believe recognizing and valuing natural capital can be useful in assessing management policies, improving ecological understanding, demonstrating the distribution of benefits, and promoting ecosystem management (Armsworth and Roughgarden 2001, Alyward and Barbier 1992, Dasgupta et al. 2000). Given that economics is based on the efficient allocation of scarce resources to satisfy human needs and desires (Tisdell 1991, Tietenberg 1992, Freeman 1993), and ecosystem services are natural capital that provides those needs and services, economic and market principles can be applied to managing natural capital on the part of landowners, or those who possess the rights to that capital.

Western History of Ecosystem Services

Pinchot painting by Stan GalliThe first references to ecosystem services in Western culture are generally attributed to Plato, who noticed losses in soil fertility resulting from human actions. He was quoted in Hittel (1992) as stating, “What now remains of the formerly rich land is like the skeleton of a sick man with all the fat and soft earth having wasted away and only the bare framework remaining…” This idea was carried to more modern times by George Perkins Marsh (1864) who made similar observances stating: “Earth, water, the ducts and fluids of vegetation and animal life, the very air we breathe, are peopled by minute organisms which perform most important functions in both the living and inanimate kingdoms of nature.” Shortly thereafter Gifford Pinchot and other Progressive Era conservationists, and later Aldo Leopold, began to speak and write of humans not as a conqueror of nature but more a citizen and steward of the natural world (e.g. Leopold 1949). This recognition of human dependence on natural ecosystems was promoted and adopted as a concept and along with it came the desire to account for and manage the benefits.

Nature’s Services

Building on this recognition of human dependence and essential values, efforts to modernize the idea of valuing these ecological processes and the benefits they provide to humans in economic terms began in the latter part of the last century (e.g. King 1966, Helliwell 1969, Odum and Odum 1972) and more recently (De Groot 1992, Pearce 1993, Farber 2002). This process, as explained by Gretchen Daily (1997), was reinitiated most recently with a group gathered at an annual meeting for the Pew Fellows in Conservation in which the conversation began to “lament the near total lack of public appreciation of societal dependence upon natural ecosystems.” Some contended that this was a failure of the scientific community, as it had not fulfilled its role to “generate, synthesize, and effectively convey the necessary information to the public” (Ruhl, Salzman 2007). This informal meeting resulted in concerted efforts by these scientists to define the current understanding of the suite of natural services providing benefits to humans and began the work to provide a preliminary assessment of their value. The effort to define and unify the knowledge of these services produced Daily’s pivotal work, Nature’s Services (1997).

Global Values

Ginseng_ecoReataAs a product of these discussions, Constanza et al. (1997) developed the first effort to provide an overall value of the earth’s ecosystems. It was in this paper, through examining a range of ecosystem services, that the global value of ecosystem services was first estimated between $16-54 trillion per year. This estimate demonstrated the importance of ecosystems, as the numbers were approximately equal to or greater than the summed gross national products (GNP) of the world. Although, many analysts (e.g. Pearce 1998) challenged the methods and conclusions of this paper, others supported the work, and these estimates have endured as a basis for the global natural values.


All these labors were exemplified with a market example of how the services provided by nature could have real economic impacts from a paper by Chichilnisky and Heal (1998) on the purchase of watershed rights by New York City in the early 1990s. New York City was assessing its needs for providing a clean and suitable water source for its residents and was facing major facility upgrades or some other method of pre-treatment that would allow its current systems to be maintained and brought into regulatory compliance. Building the new facilities would cost an estimated $6-8 billion, but investing in a variety of watershed protection programs upstream could provide similar results for approximately $1.5 billion (Daily and Ellison 2004). New York chose the watershed protection efforts and provided one of the early and central payments for ecosystem services (PES) examples in the US.

It was the combination of these works, along with the example of New York City and the various payment and accounting methods developing all over the world, that have elevated the concepts of PES so that the inherent values of ecosystem services are being recognized. These ideas are increasingly planted in the minds of managers, administrators, policy-makers, and citizens worldwide, as concepts of assets and natural capital, and are influencing decisions for the benefits of all.

For more information on ecosystem services programs around the world see the World Resources Institute’s Mainstreaming Ecosystem Services Initiative. Also see the Natural Capital Project co-founded by Dr. Daily.


Alyward, B., Barbier, E.B., 1992. Valuing environmental functions in developing countries. Biodiversity and Conservation 1, 34-50.Braun, E.L., 1950. Deciduous Forests of Eastern North America. Blakiston, Philadelphia.

Armsworth, P.R., Roughgarden, J.E., 2001. An invitation to ecological economics. Trends in ecology and evolution 16, 229-234.

Chee, Y. E., 2004. An ecological perspective on the valuation of ecosystem services. Biological Conservation 120, 549-565.

Chichilnisky, G. and Heal, G., 1998. Economic Returns from the Biosphere. Nature, February 1998, 629.

Costanza, R. et al., 1997. The Value of the World’s Ecosystems Services and Natural Capital. Nature, May 1997, 253.

Daily, G.C. and Ellison, K., 2004. The New Economy of Nature 63.

Daily, G.C. ed., 1997. Nature’s Services: Societal Dependence On Natural Ecosystems 3rd Edition. Island Press.

Dasgupta, P., et al., 2000. Economic pathways to ecological sustainability. BioScience 50, 339-345.

De Groot, R.S., 1992 Functions of Nature: Evaluation of Nature in Environmental Planning, Management and Decision Making. Wolters-Noordhoff, Groningen.

Farber S.C., et al., 2002. Economic and ecological concepts for valuing ecosystem services. Ecological Economics 41, 375-392.

Freeman III, A.M., 1993. The Measurement of Environmental and Resources Values. Resources for the Future, Washington, DC, USA.

Hawken, P., et al., 1999. Natural Capitalism. Earthscan Publications Ltd. London, UK.

Helliwell, D.R., 1969. Valuation of Wildlife Resources. Regional Studies 3, 41-49.

Hittel, D., 1992. Out of the Earth: Civilization and the life of the soul. University of California Press, 104.

King, R.T., 1966. Wildlife and Man. New York Conservationist 20 (6), 8-11.

Leopold, A., 1949. A Sand County Almanac. Oxford University Press.

Marsh, G.P., 1864. Man and Nature; or Physical Geography as Modified by Human Action. Charles Scribner, New York, New York.

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

Odum E.P. and Odum H.T., 1972. Natural Areas as necessary components of man’s total environment. In: Transactions of the 37th North American Wildlife and Natural Resources Conference, March 12-15, 1972. Wildlife Management Institute, Washington DC Vol. 37, 178-189.

Pearce, D., 1998. Auditing the earth: The value of the world’s ecosystem services and natural capital. Environment, March, 23-28.

Pearce, D.W., 1993. Economic Values and the Natural World. Earthscan, London.

Ruhl, J.B., Salzman, J., 2007. The law and policy beginnings of ecosystem services. The Journal of Land Use 22 (2), 157-172.

Tietenberg, T., 1992. Environmental and Natural Resource Economics. Harper Collins Publishers. New York, USA.

Tisdell, C.A., 1991. Economics of Conservation. Elsevier, Amsterdam, Netherlands.


About Stuart Hale

Stuart is a forest and natural resource professional focused on ecosystem services, GIS/data management, and sustainable forestry. Find him on Twitter.


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