Ecosystem values, and the functional roles of ecosystems in providing goods and services for Man, have been subjects of increasing discussion and controversy among ecologists and economists in recent years. Economists have developed economic theory based on a market model, and price or value has been set in the marketplace. However, the market system cannot account for all possible values, and fails to account for goods and services for which no market, or only imperfect markets, exist.
These non-traded goods and services are termed nonmarket values, and are categorized in the scheme we have developed either as Value II (attributable or assignable values) or as Value III (intangible or non-assignable values). The true or total value of natural systems should include not only the market values (Value I) but also these two categories of non-market values whenever decisions are made about the alteration of natural systems. Usually, only market values are incorporated by decision-makers in the management strategies of natural systems, and as a result of their omission of non-market values, numerous natural systems are being degraded or destroyed through market-goods extraction.
The examples of market and non-market values of tropical moist forests, demonstrate the range of nonmarket goods and services provided by natural ecosystems. Excessive alteration and destruction of tropical forests for extraction of market goods, damages the integrity of the forests and reduces or destroys the capacity of these ecosystems to provide valuable non-market goods and services. One can measure the value of these non-market goods and services by calculating the cost of providing them through technology. By not accounting for the public goods provided by forests, overall sustained-yield potential of the public and private goods produced by the system is reduced. These non-market values need to be incorporated in decisions about the fate of natural systems.
An attempt has been made in this paper to establish a common understanding of value for both economists and ecologists. If the problems of value determination can be viewed with a joint understanding, the political process may be influenced to provide more efficient and wiser use of the products and services of natural systems.