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What Are Ecosystem Services? The Need for Standardized Environmental Accounting Units

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  • Boyd, James
  • Banzhaf, H. Spencer

Abstract

This paper advocates consistently defined units of account to measure the contributions of nature to human welfare. We argue that such units have to date not been defined by environmental accounting advocates and that the term "ecosystem services" is too ad hoc to be of practical use in welfare accounting. We propose a definition, rooted in economic principles, of ecosystem service units. A goal of these units is comparability with the definition of conventional goods and services found in GDP and the other national accounts. We illustrate our definition of ecological units of account with concrete examples. We also argue that these same units of account provide an architecture for environmental performance measurement by governments, conservancies, and environmental markets.

Suggested Citation

  • Boyd, James & Banzhaf, H. Spencer, 2006. "What Are Ecosystem Services? The Need for Standardized Environmental Accounting Units," Discussion Papers 10586, Resources for the Future.
    • Handle: RePEc:ags:rffdps:10586
    DOI: 10.22004/ag.econ.10586
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    References listed on IDEAS

    as
    1. H. Spencer Banzhaf & James Boyd, 2012. "The Architecture and Measurement of an Ecosystem Services Index," Sustainability, MDPI, vol. 4(4), pages 1-32, March.
    2. Zvi Griliches, 1992. "Introduction to "Output Measurement in the Service Sectors"," NBER Chapters, in: Output Measurement in the Service Sectors, pages 1-22, National Bureau of Economic Research, Inc.
    3. Boyd, James & Wainger, Lisa, 2003. "Measuring Ecosystem Service Benefits: The Use of Landscape Analysis to Evaluate Environmental Trades and Compensation," Discussion Papers 10738, Resources for the Future.
    4. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    5. Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1, March.
    6. Spencer Banzhaf, H., 2005. "Green price indices," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 262-280, March.
    7. Amy W. Ando & Madhu Khanna, 2004. "Natural Resource Damage Assessment Methods: Lessons in Simplicity from State Trustees," Contemporary Economic Policy, Western Economic Association International, vol. 22(4), pages 504-519, October.
    8. Ben D. MacArthur & Richard O. C. Oreffo, 2005. "Bridging the gap," Nature, Nature, vol. 433(7021), pages 19-19, January.
    9. Boyd, James & Wainger, Lisa, 2003. "Measuring Ecosystem Service Benefits: The Use of Landscape Analysis to Evaluate Environmental Trades and Compensation," RFF Working Paper Series dp-02-63, Resources for the Future.
    10. Peskin, Henry M & Delos Angeles, Marian S, 2001. "Accounting for Environmental Services: Contrasting the SEEA and the ENRAP Approaches," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 203-219, June.
    11. Henry M. Peskin & Marian S. Delos Angeles, 2001. "Accounting for Environmental Services: Contrasting the SEEA and the ENRAP Approaches," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 203-219, June.
    12. World Bank, 2005. "Where is the Wealth of Nations? Measuring Capital for the 21st Century," World Bank Publications - Books, The World Bank Group, number 7505, December.
    13. James Boyd & Lisa Wainger, 2002. "Landscape Indicators of Ecosystem Service Benefits," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1371-1378.
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