This paper articulates a precise definition of “ecosystem
services” to advance the development of environmental
accounting and performance systems. Colloquially, ecosystem
services are “the benefits of nature to households,
communities, and economies.” The term has gained currency
because it conveys an important idea: that ecosystems are
socially valuable and in ways that may not be immediately
intuited (Daily, 1997). Beyond that, however, ecology and
economics have failed to standardize the definition and
measurement of ecosystem services. In fact, a brief survey of
definitions reveals multiple, competingmeanings of the term.
This is problematic because environmental accounting systems
increasingly are adopting “services” as the units they
track and measure. The development and acceptance of
welfare accounting and environmental performance assessment
are hobbled by the lack of standardized ecosystem
service units. To address that problem, this paper proposes
that environmental accounts focus on final services and offers
a definition of such services that is objective, rather than
qualitative, and rooted in both economic and ecological
theory. A virtue of the definition is that it constrains, and
thereby standardizes, units of ecosystem account.1
Loose definitions undermine accounting systems. They
muddy measurement and lead to difficulties in interpretation.
Our ultimate goal is the development of national-scale environmental
welfare accounting and performance assessment,
potentially consistent with national income accounting and
hence a broad “green GDP.”2 Accordingly, we seek more
rigorously and consistently defined ecosystem service units. In
this context, an operationally useful definitionof serviceswill be
clear and precise, consistent with the principles of the underlying
ecology, and with the economic accounting system to
which it relates. It also serves to narrowthe range of things to be
counted, thereby establishing priorities for limited data-collection
budgets.3
The paper proceeds as follows. First, we demonstrate the
public policy demand for standardized units of ecosystem
measurement. Second, we advance and defend an economic
definition of units of account. Our overall perspective is that
the goal of social policy is to maximize human well-being as
opposed to a purely ecological objective. Third,wecontrast this
definition with existing definitions of services and environmental
accounting units. Fourth, we concretely illustrate our
definition via an inventory of measurable ecosystem services.
Clear units of account are fundamental to two policy
initiatives whose social desirability we take as self-evident:
the effective procurement of environmental quality by governments
and clear national measures of well-being arising
from environmental public goods and market goods—otherwise
known as a green GDP.4 As we will argue ultimately, one
particular set of accounting units is applicable to both of these
broad applications. Before turning to our definition, however,
we discuss the need for standardized units, relate them to
accounting and procurement, and explain why such units
have been slow to develop.
This paper articulates a precise definition of “ecosystem
services” to advance the development of environmental
accounting and performance systems. Colloquially, ecosystem
services are “the benefits of nature to households,
communities, and economies.” The term has gained currency
because it conveys an important idea: that ecosystems are
socially valuable and in ways that may not be immediately
intuited (Daily, 1997). Beyond that, however, ecology and
economics have failed to standardize the definition and
measurement of ecosystem services. In fact, a brief survey of
definitions reveals multiple, competingmeanings of the term.
This is problematic because environmental accounting systems
increasingly are adopting “services” as the units they
track and measure. The development and acceptance of
welfare accounting and environmental performance assessment
are hobbled by the lack of standardized ecosystem
service units. To address that problem, this paper proposes
that environmental accounts focus on final services and offers
a definition of such services that is objective, rather than
qualitative, and rooted in both economic and ecological
theory. A virtue of the definition is that it constrains, and
thereby standardizes, units of ecosystem account.1
Loose definitions undermine accounting systems. They
muddy measurement and lead to difficulties in interpretation.
Our ultimate goal is the development of national-scale environmental
welfare accounting and performance assessment,
potentially consistent with national income accounting and
hence a broad “green GDP.”2 Accordingly, we seek more
rigorously and consistently defined ecosystem service units. In
this context, an operationally useful definitionof serviceswill be
clear and precise, consistent with the principles of the underlying
ecology, and with the economic accounting system to
which it relates. It also serves to narrowthe range of things to be
counted, thereby establishing priorities for limited data-collection
budgets.3
The paper proceeds as follows. First, we demonstrate the
public policy demand for standardized units of ecosystem
measurement. Second, we advance and defend an economic
definition of units of account. Our overall perspective is that
the goal of social policy is to maximize human well-being as
opposed to a purely ecological objective. Third,wecontrast this
definition with existing definitions of services and environmental
accounting units. Fourth, we concretely illustrate our
definition via an inventory of measurable ecosystem services.
Clear units of account are fundamental to two policy
initiatives whose social desirability we take as self-evident:
the effective procurement of environmental quality by governments
and clear national measures of well-being arising
from environmental public goods and market goods—otherwise
known as a green GDP.4 As we will argue ultimately, one
particular set of accounting units is applicable to both of these
broad applications. Before turning to our definition, however,
we discuss the need for standardized units, relate them to
accounting and procurement, and explain why such units
have been slow to develop.
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