Valuing the Environment as Input, Ecosystem Services and Developing Countries

In outlining how “valuing the environment as input” could be applied to a number of contexts in low and middle-income countries, Karl-Göran Mäler laid the foundation for many additional applications of the production function approach as reported (Mäler in Valuing environmental benefits in developing countries. Special Report 29, Michigan State University, pp 11–32. 1991). The following review traces how his contribution has helped spawn a large literature on valuing ecosystem services as applied in low and middle-income countries. We examine a number of case studies illustrating such approaches. We also note growing interest in two important applications in low and middle-income countries: the hydrological function of forested watersheds and the storm protection provided by estuarine and coastal ecosystems. Using the example of storm protection by mangroves, we further explore the role of spatial characteristics in influencing the value attributed to this benefit.