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The concept of ecosystem services is useful but also rather controversial. In part, this controversy relates to what is sometimes called the “commoditization” of ecosystem services (Muradian and Rival, 2012; see also the introduction of this book). Many people feel that the benefits that nature provides us with should not be conceptualized as “services” comparable to those supplied by traditional markets (e.g. the legal services of a lawyer or the financial services of a bank).
Nevertheless, many environmental economists have observed that market mechanisms can play an important role in balancing the “supply” and “demand” of ecosystem services. For example, farmers respond to subsidy schemes that offer them a fair reward for environment-friendly practices and consumers with “green” preferences tend to buy ecolabeled products.
Unlike actors in traditional markets, the suppliers and consumers of ecosystem services often do not directly engage in transactions with each other. This has to do with four typical and closely related features of many ecosystem services (also known as “market failures”):
Their “public good” (or “collective good”) nature: Ecosystem services, such as those provided by pristine forests and clean rivers, are there for everyone to enjoy. No one can be excluded from the tangible and intangible benefits they provide and (to a certain extent) there is no rivalry in their use (that means that their enjoyment by any individual does not preclude the simultaneous enjoyment by others).
Increasing pressure from economic development and population growth has resulted in the degradation of ecosystems around the world and the loss of the essential services that they provide. Understanding the linkages between ecosystem service provisioning and human well-being is crucial for the establishment of effective environmental and economic development policy. Presenting new insights into the relationship between ecosystem services and livelihoods in developing countries, this book takes up the challenge of assessing these links to demonstrate their importance in policy development. It pays special attention to innovative management opportunities that improve local livelihoods and alleviate poverty while enhancing ecosystem protection. Based on eighteen studies in more than twenty developing countries, the authors explore the role of biodiversity-, marine-, forest-, water- and land-related ecosystem services, making this an invaluable contribution to research on the role of ecosystems in supporting the livelihoods of the poor around the world.
Humans have always depended on land-related ecosystem services to secure survival and improve well-being. Human-induced changes in land use have typically allowed populations all over the world to expand agricultural land, food production and human settlements. Extensive deforestation and mining secured access to timber and mineral resources, which consequently facilitated increases in production and consumption. This modification of land cover, and the natural environment more broadly, for the sake of human benefit has nevertheless not always coincided with improvements in living standards and poverty alleviation. Increases in food availability at least until the Industrial Revolution were for the most part accompanied by subsequent increases in population size rather than any significant welfare improvements. More recently, structural changes favouring manufacturing and technological advancements allowed for significant productivity gains (and improvements in nutrition, life expectancy and living conditions) despite high population growth rates, at least for the more developed economies.
Ecosystems play a crucial role in the survival and well-being of human beings. Increasing pressure on ecosystems resulting from economic development and population growth has resulted in degrading ecosystems and losses of the services ecosystems provide throughout the world. According to the UN (2010) ‘as a consequence of human actions, species are being lost at a rate estimated to be 100 times the natural rate of extinction. In the past century, 35% of the mangroves, 40% of the forests and 50% of the wetlands have been lost . . . action is urgently needed to avoid reaching critical thresholds that will lead to an irreversible loss of biodiversity and ecosystem services, with dangerous consequences for human well-being’.
The Millennium Ecosystem Assessment (MEA) (2005) was the first to explicitly underline the linkages between ecosystems and human well-being, coining the term ‘ecosystem services’ to stress the important benefits that people derive from ecosystems (MEA 2005). The term ‘Ecosystem Services’ serves as a catalyst to stress the importance of ecosystems for human well-being. As indicated in Figure 1.1, the number of publications using the term has increased exponentially since 2005. Figure 1.1 also shows that most of the publications are in the domain of the natural sciences, with the governance-based sciences somewhat lagging behind.
Amongst the most striking empirical relationships uncovered over the last ten to fifteen years has been the negative causal link between several measures of resource dependence and economic development. Resource-based economic development has not proven to be a great success amongst developing nations; as a matter of fact, poor nations deprived of minerals, fertile land and forests performed better compared to their resource-rich counterparts. Recent empirical evidence and theoretical work provide strong support to a resource curse hypothesis; i.e. natural wealth tends to retard rather than promote economic growth (Auty 1994, Gylfason 2000, 2001a,b, Leite and Weidmann 1999, Papyrakis and Gerlagh 2004, Rodriguez and Sachs 1999, Sachs and Warner 1995 1997, 1999a,b, 2001). The most prominent example is certainly the Organization of the Petroleum Exporting Countries (OPEC) with a disappointing annual growth rate of –1.3% on average between 1965 and 1998 despite the significant injections of petrodollars into their local economies from the oil extractive industries (Gylfason 2001a). The expectations of many early development economists (Nurkse 1953, Rostow 1960, Watkins 1963) that resource endowments could potentially support economic expansion by attracting funds from foreign creditors, channelling the primary sector rents into productive investment and escaping ‘poverty traps’ proved to be unrealistic. Similarly, any positive linkages between resource abundance and economic prosperity observed during the origins of the industrial revolution in Great Britain, Germany and the United States or more recently in countries such as Botswana, Norway and Iceland appear to be exceptional cases rather than belonging to a general applicable rule (Sachs and Warner 1995, Wright 1990).