For example, let’s suppose that the flow of ecosystem services in any
time period, t, can be quantified and that we can measure what each individual
is ‘willing to pay’ for having these services provided to him or her. If
we sum up, or aggregate, the willingness to pay by all the individuals benefiting from the ecosystem services in each period, we will have a monetary amount – call it Bt – which indicates the social benefits in the given time period t of those services. Hopefully, there will be a stream of such benefits generated by ecosystem services, from the present time and into the future. Because society is making a decision today about whether or not to preserve ecosystems, we want to consider the flow of benefits of these services,net of the costs of maintaining the natural ecosystems intact, in terms of
their present value. To do this, any future net benefit flows are discounted into present value equivalents. In essence, we are treating natural ecosystems as a special type of capital asset – a kind of ‘natural wealth’ – which just like any other asset or investment in an economy is capable of generating a current and future flow of ‘income’ or ‘benefits’.
For example, let’s suppose that the flow of ecosystem services in anytime period, t, can be quantified and that we can measure what each individualis ‘willing to pay’ for having these services provided to him or her. Ifwe sum up, or aggregate, the willingness to pay by all the individuals benefiting from the ecosystem services in each period, we will have a monetary amount – call it Bt – which indicates the social benefits in the given time period t of those services. Hopefully, there will be a stream of such benefits generated by ecosystem services, from the present time and into the future. Because society is making a decision today about whether or not to preserve ecosystems, we want to consider the flow of benefits of these services,net of the costs of maintaining the natural ecosystems intact, in terms oftheir present value. To do this, any future net benefit flows are discounted into present value equivalents. In essence, we are treating natural ecosystems as a special type of capital asset – a kind of ‘natural wealth’ – which just like any other asset or investment in an economy is capable of generating a current and future flow of ‘income’ or ‘benefits’.
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