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ECOSYSTEM SERVICES
ECOSYSTEM SERVICES
ECOSYSTEM SERVICES
Ecosystem services in decision making:
time to deliver
21
Gretchen C Daily
1*
, Stephen Polasky
2
, Joshua Goldstein
1
, Peter M Kareiva
3
, Harold A Mooney
1
, Liba Pejchar
1
,
Taylor H Ricketts
4
, James Salzman
5
, and Robert Shallenberger
6
Over the past decade, efforts to value and protect ecosystem services have been promoted by many as the last,
best hope for making conservation mainstream – attractive and commonplace worldwide. In theory, if we can
help individuals and institutions to recognize the value of nature, then this should greatly increase investments
in conservation, while at the same time fostering human well-being. In practice, however, we have not yet
developed the scientific basis, nor the policy and finance mechanisms, for incorporating natural capital into
resource- and land-use decisions on a large scale. Here, we propose a conceptual framework and sketch out a
strategic plan for delivering on the promise of ecosystem services, drawing on emerging examples from
Hawai‘i. We describe key advances in the science and practice of accounting for natural capital in the decisions
of individuals, communities, corporations, and governments.
Front Ecol Environ
2009; 7(1): 21–28, doi:10.1890/080025
T
he Millennium Ecosystem Assessment (MA)
mental wing of Goldman Sachs; Daily and Ellison 2002;
Bhagwat and Rutte 2006; Kareiva and Marvier 2007;
Ostrom
et al
. 2007; Goldman
et al
. 2008). China, for
instance, is investing over 700 billion yuan (about
US$102.6 billion) in ecosystem service payments, in the
current decade (Liu
et al
. 2008).
The goal of the Natural Capital Project – a partnership
between Stanford University, The Nature Conservancy,
and World Wildlife Fund (www.naturalcapitalproject.org)
– is to help integrate ecosystem services into everyday
decision making around the world. This requires turning
the valuation of ecosystem services into effective policy
and finance mechanisms – a problem that, as yet, no one
has solved on a large scale. A key challenge remains: rel-
ative to other forms of capital, assets embodied in ecosys-
tems are often poorly understood, rarely monitored, and
are undergoing rapid degradation (Heal 2000a; MA
2005; Mäler
et al
. 2008). The importance of ecosystem
services is often recognized only after they have been lost,
as was the case following Hurricane Katrina (Chambers
et al
. 2007). Natural capital, and the ecosystem services
that flow from it, are usually undervalued – by govern-
ments, businesses, and the public – if indeed they are
considered at all (Daily
et al
. 2000; Balmford
et al
. 2002;
NRC 2005).
Two fundamental changes need to occur in order to
replicate, scale up, and sustain the pioneering efforts that
are currently underway, to give ecosystem services weight
in decision making. First, the science of ecosystem ser-
vices needs to advance rapidly. In promising a return (of
services) on investments in nature, the scientific commu-
nity needs to deliver the knowledge and tools necessary to
forecast and quantify this return. To help address this
challenge, the Natural Capital Project has developed
InVEST (a system for Integrated Valuation of Ecosystem
advanced a powerful vision for the future (MA
2005), and now it is time to deliver. The vision of the
MA – and of the prescient ecologists and economists
whose work formed its foundation – is a world in which
people and institutions appreciate natural systems as vital
assets, recognize the central roles these assets play in sup-
porting human well-being, and routinely incorporate
their material and intangible values into decision mak-
ing. This vision is now beginning to take hold, fueled by
innovations from around the world – from pioneering
local leaders to government bureaucracies, and from tra-
ditional cultures to major corporations (eg a new experi-
In a nutshell:
•
Valuing nature is central to mainstreaming conservation, but is
not an end in itself
•
Success hinges on a better understanding of ecosystem produc-
tion functions and on integrating research (and experimenta-
tion) into the development of new policies and institutions
•
The Natural Capital Project is designing practical tools for this
purpose, including InVEST, a system for quantifying ecosystem
services produced under different scenarios
•
The use of these tools in contrasting settings is opening up
important conservation opportunities
1
Center for Conservation Biology (Department of Biology) and Woods
Institute for the Environment, Stanford University, Stanford, CA
*
(gdaily@stanford.edu);
2
Applied Economics and Ecology, Evolution
and Behavior, University of Minnesota, St Paul, MN;
3
The Nature
Conservancy, Seattle, WA;
4
Conservation Science Program, WWF-
US, Washington, DC;
5
Nicholas School of Environment and Earth
Sciences, Duke University, Durham, NC;
6
The Nature
Conservancy, Kamuela, HI
© The Ecological Society of America
www.frontiersinecology.org
Ecosystem services in decision making
GC Daily
et al.
Panel 1. A tool for Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST)
22
The Natural Capital Project (www.naturalcapitalproject.org) is a partnership
between Stanford University, The Nature Conservancy, and World Wildlife
Fund, working together with many other institutions. The Project’s mission is
to align economic forces with conservation, by developing tools that make
incorporating natural capital into decisions easy, by demonstrating the power
of these tools in important, contrasting places, and by engaging leaders globally.
The Project is developing a software system for quantifying ecosystem ser-
vice values across land- and seascapes, called InVEST. This tool informs man-
agers and policy makers about the impacts of alternative resource manage-
ment choices on the economy, human well-being, and the environment, in an
integrated way.
Staging
Scenarios
(
Management, climate, population)
Models
Provisioning
Food
Timber
Fresh water
Regulating
Climate
stability
Flood
control
Cultural
Recreation
Tradition
Community
Biodiversity
Species
Habitats
Supporting
Pollination
Outputs ~ Biophysical, economic, cultural
Tradeoff
curves
Balance
sheets
Examples of urgent questions that InVEST can help answer include:
• How does a proposed forestry management plan affect timber yields, biodi-
versity, water quality, and recreation?
• Which parts of a watershed provide the greatest carbon sequestration, biodi-
versity, and tourism values? Where would reforestation achieve the greatest
downstream water quality benefits?
• How would agricultural expansion affect a downstream city’s drinking water
supply? How will climate change and population growth impact these effects?
Maps
Figure 1.
An iterative process for integrating ecosystem
services into decisions. The process begins with stake-
holder engagement around impending decisions, with a
focus on realistic, alternative scenarios for the future.
The modeling is shaped by stakeholders, and typically
focuses on the (subset of possible) services and scenarios
deemed most important. Outputs are displayed in
accordance with stakeholder preferences, in the form of
maps, tradeoff curves, and/or balance sheets. These
can be expressed in biophysical (eg tons of carbon),
economic (eg dollars), or cultural (eg visitor-days)
terms (see Nelson
et al
. page 4 in this issue).
InVEST is designed for use as part of an active decision-making process
(Figure 1). The first phase of the approach involves working with decision mak-
ers and other stakeholders to identify critical management decisions and to
develop scenarios to project how the provision of services might change in
response to those decisions, as well as to changing climate, population, and so
forth. Based on these scenarios, a set of models quantifies and maps ecosystem
services. The outputs of these models provide decision makers with informa-
tion about costs, benefits, trade-offs, and synergies of alternative investments in ecosystem service provision. A detailed case study of the
Willamette Valley, OR, is given in Nelson
et al
. (page 4 in this issue).
InVEST uses a flexible, modular, and “tiered” modeling approach to ensure that the models are useful worldwide, including in places with
sparse data.Tier 1 models have modest data requirements to estimate the relative production of ecosystem services across a landscape, and
can inform prioritization exercises and general management planning.Tier 2 models compute absolute service levels and corresponding eco-
nomic values, to support more information-rich planning processes, such as payment for ecosystem services schemes. Finally,Tier 3 inte-
grates more complex models, developed by other research teams (eg hydrology models), that include time steps and feedbacks in the over-
all ecosystem service analysis.
Services and Tradeoffs; see Panel 1 and Nelson
et al
. page
4 in this issue). Second, ecosystem services must be explic-
itly and systematically integrated into decision making by
individuals, corporations, and governments (Levin 1999;
Heal 2000a; NRC 2005). Without these advances, the
value of nature will remain little more than an interesting
idea, represented in scattered, local, and idiosyncratic
efforts.
Here, we propose a framework that considers a number
of services simultaneously. It does so over scales appropri-
ate to local-, regional-, and national-level resource-man-
agement decisions; it connects the science of quantifying
services with valuation and policy work to devise payment
schemes and management actions; and it helps in the
replication and scaling up of successful models, thereby
creating confidence and providing inspiration for future
initiatives. We also highlight the advances in research and
implementation that will be necessary to take this
approach forward (see also Carpenter
et al
. in review).
We draw upon experiences from Hawai‘i to illustrate
each step in our framework. Hawai‘i is a microcosm of the
important forces at play worldwide. As a result of a rapidly
growing population and intensifying development pres-
sure, the future of Hawaii’s forests, croplands, and ranch-
lands is in question, as are other aspects of its economy and
culture. There is, however, renewed appreciation for tradi-
tional Hawaiian land management, in which watersheds
are recognized for all the goods and services they produce,
from the mountains to the sea. Today, diverse leaders across
the public, private, and non-profit sectors are mobilizing to
incorporate the values of natural capital into land-use and
policy decisions. By highlighting some of the active works-
in-progress there, we illustrate the promise and challenge
of creating the broader institutional and cultural changes
that are needed worldwide.
What’s new?
An appreciation of ecosystems as valuable capital assets
traces back to Plato, or even earlier (Mooney and Ehrlich
www.frontiersinecology.org
©
The Ecological Society of America
GC Daily
et al.
Ecosystem services in decision making
1997), and the current research agenda on
ecosystem services continues a long-standing
field of inquiry. For example, renewable
resources have been an active area of study
since at least the 1950s, when Gordon
(1954) first characterized the problems of
open-access fisheries. In the 1960s and
1970s, economists set out to measure “the
value of services that natural areas provide”
(Krutilla and Fisher 1975); they focused on
agricultural production (Beattie and Taylor
1985), renewable resources (Krutilla 1967;
Clark 1990), non-renewable resources
(Dasgupta and Heal 1979), and environmen-
tal amenities (Freeman 1993). More recent
advances have been seen in a broad range of
areas, including ecology and global change,
economics, institutions and policy, and espe-
cially their integration (eg Dasgupta 2001;
MA 2005; NRC 2005; Ruhl
et al
. 2007).
Yet, ascribing values to ecosystem goods
and services is not an end in itself, but rather
one small step in the much larger and dynamic arena of
political decision making (Daily
et al
. 2000). Our chal-
lenge today is to build on this foundation and integrate
ecosystem services into everyday decisions. This requires
a new focus on services beyond provisioning services; an
understanding of the interlinked production of services; a
grasp of the decision-making processes of individual
stakeholders; integration of research into institutional
design and policy implementation; and the introduction
of experimentally based policy interventions designed for
performance evaluation and improvement over time.
There are a lot of devils in the details of this work.
23
Decisions
Actions and
scenarios
Incentives
Institutions
Ecosystems
Biophysical
models
Information
Values
Services
Economic and
cultural models
Figure 2.
A framework showing how ecosystem services can be integrated into
decision making. One could link any two ovals, in any direction; we present the
simplest version here.
right institutions can create incentives, so that the deci-
sions made by individuals, communities, corporations,
and governments promote widely shared values. The
links between the “values”, “institutions”, and “decisions”
ovals are much more representative of the art and politics
of social change than of science, although scientists can
inform these debates if they concentrate on specific deci-
sions and are attuned to the social and political contexts.
In the following sections, we move around the
schematic of Figure 2 to explore how a focus on decisions
can motivate the integration of ecosystem services into
management and policy decisions, and inspire a research
agenda to support this change.
Making ecosystem services operational
Figure 2 presents a framework for the role that ecosystem
services can play in decision making. Although the
framework is shown as a continuous loop, we start with
the “decisions” oval to emphasize our focus. The main
aim in understanding and valuing natural capital and
ecosystem services is to make better decisions, resulting
in better actions relating to the use of land, water, and
other elements of natural capital.
The biophysical sciences are central to elucidating the
link between actions and ecosystems, and that between
ecosystems and services (biophysical models of “ecologi-
cal production functions”). The social sciences are cen-
tral to measuring the value of services to people (“eco-
nomic and cultural models”). Because this value is
multidimensional, it makes sense to characterize it as
fully and systematically as possible, in ways that will be
meaningful to many different audiences.
Finally, valuing ecosystem services provides useful
information that can help design the institutions that
will guide resource management and policy. Having the
Decisions
ecosystems
In Figure 2, the science needed to inform the link that
connects decisions and ecosystems is a huge challenge in
itself. We do not detail this here, since readers of
Frontiers
have built a vast literature connecting past human deci-
sions and activities to their impacts on ecosystems and
landscapes, and the species that inhabit them. Looking
forward is also essential, however, and scenarios that
describe plausible futures, combining alternative deci-
sions with projected changes in demographics, climate,
and other factors, have become both more common and
more sophisticated (eg Peterson
et al
. 2003).
In Hawai‘i, there has been extensive work on how
land-management decisions affect ecosystems. For exam-
ple, we have learned that the decision to introduce
exotic pasture grasses has dramatically changed fire fre-
quency and intensity across landscapes (D’Antonio and
Vitousek 1992), and that the introduction of cattle, non-
native game, and feral ungulates has further transformed
© The Ecological Society of America
www.frontiersinecology.org
Ecosystem services in decision making
GC Daily
et al.
24
requires a focus on different questions than are
traditional in ecology (Boyd and Banzhaf
2005). The MA synthesizes our existing
knowledge (MA 2005), often at the global
scale. There are also many fine-scale studies of
ecosystem production functions, typically
focusing on a single service (Kremen
et al
.
2002; Ricketts
et al
. 2004; Jackson
et al
. 2005;
Hougner
et al
. 2006). Much more work is
needed now, on integrating multiple services
at regional and global scales (eg Nelson
et al
.
page 4 in this issue; Chan
et al
. 2006; Naidoo
and Ricketts 2006; Brauman
et al
. 2007).
In Hawai‘i, as in most places, ecological pro-
duction functions are largely undescribed.
However, efforts are now underway to quantify
production functions for a range of policy-rele-
vant ecosystem services, in fine detail, across
heterogeneous landscapes, and to elucidate
the tradeoffs and synergies among services
under alternative management options.
Historically, the production of goods through
ranching and forestry has been the best
described of terrestrial services. Today, there is
growing interest in managing forests of the
endemic hardwood
Acacia koa
as a “win–win”
land use, providing high-value timber as well
as other ecosystem services (eg Pejchar
et al
.
2005; Goldstein
et al
. 2006; Litton
et al
. 2006;
Scowcroft
et al
. 2007). Multiple reforestation
projects – some spanning thousands of acres – have
recently been launched, allowing further research on pro-
duction functions for services such as carbon sequestration
(eg Litton
et al
. 2006; Scowcroft
et al.
2007) and ground-
water recharge (K Brauman unpublished data; Figure 3).
The translation of ecosystem condition and function
into ecosystem services requires interdisciplinary and user-
oriented research, including: (1) collaborating with stake-
holders to define services that people care about (eg
Carpenter
et al
. 2006; Cowling
et al
. 2008); (2) developing
transparent, flexible models of ecological production func-
tions at scales relevant to decision making (Panel 1); and
(3) testing and refining these models in systems around the
world, to derive general insights (eg Ricketts
et al
. 2008).
Figure 3.
A micrometeorological station for quantifying the roles of pasture
and nearby forest in recharging groundwater supplies for local water users.
Palani Ranch, Kona, Hawai‘i.
native ecosystems (Cuddihy and Stone 1990; Maguire
et
al
. 1997). Conservation and restoration are a key focus
today (Manning
et al
. 2006; Goldstein
et al
. 2008), as are
new remote sensing systems for characterizing biodiver-
sity and ecosystem structure and function at large scales
(Asner
et al
. 2008).
The scientific foundation for informing decisions that
affect ecosystems could be greatly enhanced by: (1) col-
laborating with stakeholders to define important scenar-
ios of alternative future uses of land, water, and other nat-
ural resources (eg MA 2005, “Scenarios” volume); (2)
improving methods for assessing the current condition,
and predicting the future condition, of ecosystems (eg
Heinz Center 2008); and (3) establishing state-of-the-art
programs for long-term monitoring of biodiversity and
other ecosystem attributes (eg Scholes
et al
. 2008).
Services
values
The promise of ecosystem service analyses is that they
will make explicit the costs and benefits of alternative
actions to people (NRC 2005). Economic valuation
methods take changes in the supply of ecosystem services
as input and translate these into changes in human wel-
fare, in monetary terms (Repetto
et al
. 1987; Daily
et al
.
2000; Arrow
et al
. 2004). Cost–benefit analyses and other
methodologies express apples-to-oranges comparisons in
monetary currencies, making alternative options easier to
compare. In certain cases, however, service values may
Ecosystems
services
Ecological production functions translate the structure
and function of ecosystems into the provision of impor-
tant services (Heal 2000b; NRC 2005). Production func-
tions have a long tradition in agriculture and manufactur-
ing, where the amount produced of a given commodity (eg
grain) is related to the quantities and quality of the vari-
ous inputs (eg seeds, labor, chemicals, irrigation).
Estimating these functions for ecosystem services often
www.frontiersinecology.org
©
The Ecological Society of America
GC Daily
et al.
Ecosystem services in decision making
(a)
(b)
25
(c)
(d)
(e)
(f)
Figure 4.
Using InVEST to help assess management options for (a) a land-holding of Kamehameha Schools (Kawailoa, O‘ahu).
This 26 000-acre parcel has (b) prime undeveloped coastline, (c) an ancient fishpond and other important cultural assets, (d) a highly
productive agricultural belt with water resources, (e) biodiverse native upland forest, and (f) commercial and residential areas.
best be conveyed in other ways (eg the cultural impor-
tance of natural places), because assigning credible mon-
etary values is difficult or less meaningful.
In Hawai‘i, both monetary and non-monetary metrics
are important to decision makers. Kaiser and Roumasset
(2002), for example, examined the monetary contribution
of a forested watershed in enhancing groundwater
recharge, and present a clear metric for weighing the costs
and benefits of alternative approaches to watershed man-
agement. Kamehameha Schools, a major educational
trust, is developing a multi-dimensional perspective,
including economic, environmental, educational, and
community elements, with an underlying cultural founda-
tion. To evaluate land-management decisions, the trust
considers the number of student activity-days per year, the
number of areas available for gathering traditional plants
(eg for lei making), and access to sites of spiritual impor-
tance, in addition to monetary estimates of value. The
Natural Capital Project is working with Kamehameha
Schools to apply InVEST to a key tract of land on O‘ahu,
to determine the impacts of alternative land uses on bio-
physical and cultural ecosystem services (Figure 4).
More research is needed to build the credibility of
ecosystem service approaches, by: (1) combining direct
© The Ecological Society of America
www.frontiersinecology.org
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