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A method for valuing global ecosystem services

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  • Anne Alexander
  • Ralph d'Arge
  • John List
  • Michael Margolis

Abstract

The goal of this paper is to provide an investigation of several approaches to valuing ecosystem services and to contribute additional techniques which may be used in evaluating 'green' GDP accounts. Our estimates focus on the ecosystem as a productive economic input, not a stock which is depreciated or depleted over time; as such, it differs with other concepts more frequently employed in green GDP accounting. Most of our results are derived from the analytical fiction that a single owner of the biosphere establishes a market for all ecological resources. This monopolist then appropriates all rents from the human population. The maximum amount the monopolist charges is first assumed to be world gross product less the global human subsistence level. In addition, we examine the excess rents available in factor markets using the assumption of weak complementarity between factor inputs and ecosystem services. We also provide more conservative estimates of the value of ecosystem services by investigating the sustainable price the monopolist could charge the global population and by exploring the effects of compensating wage differentials and a non-monopolist owner of the ecosystem.

Suggested Citation

  • Anne Alexander & Ralph d'Arge & John List & Michael Margolis, 1998. "A method for valuing global ecosystem services," Natural Field Experiments 00530, The Field Experiments Website.
    • Handle: RePEc:feb:natura:00530
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    References listed on IDEAS

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    1. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    2. Thomas C. Brown, 1984. "The Concept of Value in Resource Allocation," Land Economics, University of Wisconsin Press, vol. 60(3), pages 231-246.
    3. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March.
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    Cited by:

    1. Farber, Stephen C. & Costanza, Robert & Wilson, Matthew A., 2002. "Economic and ecological concepts for valuing ecosystem services," Ecological Economics, Elsevier, vol. 41(3), pages 375-392, June.
    2. David Pearce, 2008. "Do We Really Care About Biodiversity?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(4), pages 611-611, August.
    3. John List, 2021. "2021 Summary Data of Artefactual Field Experiments Published on Fieldexperiments.com," Artefactual Field Experiments 00749, The Field Experiments Website.
    4. Zhigang Li & Zishu Sun & Yangjie Tian & Jialong Zhong & Wunian Yang, 2019. "Impact of Land Use/Cover Change on Yangtze River Delta Urban Agglomeration Ecosystem Services Value: Temporal-Spatial Patterns and Cold/Hot Spots Ecosystem Services Value Change Brought by Urbanizatio," IJERPH, MDPI, vol. 16(1), pages 1-18, January.
    5. Kreuter, Urs P. & Harris, Heather G. & Matlock, Marty D. & Lacey, Ronald E., 2001. "Change in ecosystem service values in the San Antonio area, Texas," Ecological Economics, Elsevier, vol. 39(3), pages 333-346, December.
    6. John List, 2022. "2021 Summary Data of Natural Field Experiments Published on Fieldexperiments.com," Natural Field Experiments 00747, The Field Experiments Website.
    7. Ayres, Robert U., 2004. "On the life cycle metaphor: where ecology and economics diverge," Ecological Economics, Elsevier, vol. 48(4), pages 425-438, April.
    8. Karen Pittel & Jana Lippelt, 2014. "Climate Notes: Sustainability and Natural Capital – How High and How Important Are They?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 67(01), pages 55-58, January.
    9. Lee, Dong Joo & Choi, Moon Bo, 2020. "Ecological value of global terrestrial plants," Ecological Modelling, Elsevier, vol. 438(C).
    10. Stapleton, Lee M. & Garrod, Guy D., 2008. "Do we ecologically model what we economically value?," Ecological Economics, Elsevier, vol. 65(3), pages 531-537, April.
    11. Yushuo Zhang & Lin Zhao & Jiyu Liu & Yuli Liu & Cansong Li, 2015. "The Impact of Land Cover Change on Ecosystem Service Values in Urban Agglomerations along the Coast of the Bohai Rim, China," Sustainability, MDPI, vol. 7(8), pages 1-23, August.
    12. Lee, Dong Joo & Brown, Mark T., 2021. "Estimating the Value of Global Ecosystem Structure and Productivity: A Geographic Information System and Emergy Based Approach," Ecological Modelling, Elsevier, vol. 439(C).
    13. Zheng, Wei & Shi, Honghua & Chen, Shang & Zhu, Mingyuan, 2009. "Benefit and cost analysis of mariculture based on ecosystem services," Ecological Economics, Elsevier, vol. 68(6), pages 1626-1632, April.

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