July 03, 2006

Get rich with ecosystem services

Jing Li, Zhiyuan Ren and Zixiang Zhou set out to give monetary value to the ecosystem services of natural vegetation in the Qinba mountains of China (in Ecosystem services and their values: a case study in the Qinba mountains of China, published in Ecological Research). They focus on primary productivity, soil and fertility conservation, water conservation, carbon fixation and oxygen supply. I think their estimates are bit exaggerated.

Regarding primary productivity, Jing Li and coauthors state that "the value of goods produced by vegetation can be calculated by the price of energy." So they estimate the monetary value of "net primary productivity" of natural vegetation by pricing dry organic matter as if it were coal (actually they cut the price of coal by half to accout for the smaller energy content of dry organic matter). To valuate carbon fixation and oxygen supply, they count the cost of reforestation necessary to fix as much CO2 and produce as much O2 as natural vegetation, and in the latter case the cost of the industrial process to produce O2. They estimate the value of water conservation due to vegetation as the price of an artificial device that can store as much water as canopy, litter and soil. To calculate the value of soil conservation due to vegetation they estimate how much potassium, phosphorus and nitrogen would be lost from the soil if the natural vegetation were removed and then calculate how much it would cost to buy that quantity as commercial fertilizer; to this they add the cost of building dams to store a volume of water equal to the volume of sediments produced by soil erosion in the absence of vegetation.

The resulting value is about $1.3 million per square kilometer or $116 billion for the entire area of the Qinba mountains or $10000 per person living in the area, divided more or less equally among the primary productivity, carbon fixation and oxygen production "services." The value of soil, fertility and water conservation was $60000 per square kilometer or $500 per person.
The economic value of services of the forest ecosystems in Qinba mountains is huge. Though the local people obtain little or no profit from them directly, it cannot be doubted that the GNP of the county is based on these ecosystem services. In fact, the ecosystem services with an approximate value of 968.33 million RMB [they mean billion, and RMB is the Chinese currency] produce local benefits, such as a water supply, soil fertility protection, etc., which support annual economic development.
Notice however that the only local benefit that Li and coathors estimated was potential sediment retention. They did not measure the effect of ecosystems on water supply, but simply estimated the quantity of water stored in canopy, litter and soil. The relationship between this quantity and water supply for human use is unknown. The remaining "services" do not noticeably benefit local people. Furthermore, except perhaps CO2 capture, they do not seem to benefit anyone. What use is the energy accumulated in Qinba forests, given the abundance and convenience of fossil fuels? What use is the O2 released by photosynthesis, given that O2 is already abundant in the atmosphere? What use are the inorganic nutrients stored in the soil under natural vegetation?

Would you trust your personal finances to Jing Li, Zhiyuan Ren and Zixiang Zhou?

[The numbers in the article are pretty messed up, so the figures I show above are partly my interpretation. If someone shows me wrong I will revise this post and end it with the question, would you trust your personal finances to me?]

1 comment:

  1. Considering that the methods of estimating the economical value of ecosystem services are still it their infancy, some inconsistencies such as those are still unavoidable and are no reason to worry. Methods will get better.

    We should rather be more worried about the legal framework that will make use of those evaluations. Who will have to pay for those services? And who will get payed for those services? Are we witnessing the birth of a new kind of rent-seeking activities?