IGP Stories

Accounting for ecosystem services

Dr Ida Kubiszewski

17 January 2022

Ecosystem service valuations are becoming more common as both the public and the private sector are realizing that we need to take nature into account for our own good. There are a wide range of uses for the values of ecosystem services, including raising awareness and interest, developing national income and well-being accounts, analysing specific policies, planning urban and regional land use, creating payment for ecosystem services schemes, doing full cost accounting, or setting up a common asset trust (the table below describes these uses in more detail). However, many valuation methods exist. These require different data, expertise, tools, time commitments, and funding, but also provide different results, with varying scope and precision. Determining which methodology is the most appropriate in a situation has become a challenge for many, both inside and outside of academia.

Our goal with this paper was to provide some insight on the costs and benefits of the predominant methodologies utilized by academics to value ecosystem services. We did this by surveying academics who had performed valuation studies to estimate their required costs (in terms of time, money, and expertise) as well as the perceived precision of the results obtained and how these results were utilized by the policy community. We found, perhaps unsurprisingly, that there was an increase in perceived precision as the study costs increased.

It is important to remember when choosing a methodology to use, that they are not mutually exclusive. There is no reason that a quicker and cheaper methodology can’t be used to determine a general/wholistic value, followed up with a more resource intensive methodology that provides higher precision in a specific ecosystem or focuses on a specific service if motivated by the initial study.

The idea for this paper originated during a series of workshops with decision-makers in Ghana, Ethiopia, Kenya, and Rwanda. Many of these decision-makers expressed concern and confusion over the number of existing methodologies, and the difficulty in deciding which one to use with limited resources. They had specific uses in mind, had some resources available, but didn’t know where to start.

We hope this paper helps them and others account for ecosystem services.

Caption: The range of uses for ecosystem service values. From Costanza et al. (2014)

Use of Valuation

Appropriate values

Appropriate spatial scales

Precision Needed

Rising awareness and interest

Total values, macro aggregates

Regional to global


National income and well-being accounts

Total values by sector and macro aggregate



Specific policy analysis

Changes by policy

Multiple depending on policy

Medium to high

Urban and regional land use planning

Changes by land use scenario


Low to medium

Payment for ecosystem services

Changes by actions due payment

Multiple depending on system

Medium to high

Full cost accounting

Total values by business, product, or activity and changes by business, product, or activity

Regional to global, given the scale of international corporations

Medium to high

Common asset trusts

Totals to assess capital and changes to assess income and loss

Regional to global


Read the paper: https://www.sciencedirect.com/science/article/pii/S1470160X2200022X

Dr Ida Kubiszewski is Associate Professor in Global Prosperity at the IGP.

Image Credit: Dr Ida Kubiszewski

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