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Published 6 July 2011

Royal Society of New Zealand paper highlights a new approach for thinking about the natural economy

The natural economy provides us with many natural ‘goods and services’, but most are not considered in economic valuations, says a new paper released by the Royal Society of New Zealand.

In its “Ecosystem Services” paper the Royal Society describes how ecosystem services or processes benefit human wellbeing and the need to include these in economic decision-making. It says when these ecosystem services are not recognised in the marketplace, it leads to decision-making failures.

Examples of ecosystems services are forests reducing soil erosion, shellfish filtering water pollution, unfarmed areas improving natural pest control on nearby farmland, and ecosystems providing recreation and cultural value.

Professor Steve Wratten, Professor of Ecology at Lincoln University who contributed to the paper, says: “Researchers in New Zealand are studying the consequences of a damaging decline of biodiversity and ecosystem services and how to reduce and reverse these declines. The key is doing that in a way which is compatible with good business practice. We are also looking at how enhanced ecosystem services can be paid for.

“Whilst the value and losses of ecosystem services are becoming better known and there have been some significant local projects aimed at growers enhancing ecosystem services on their lands, actually getting the consequences turned into policy and action is now the challenge.”

The Royal Society paper states that market systems can put a price on food, but the benefits of many associated ecosystem services are not similarly recognised. The economic value of those benefits can be as large as, or larger than the pure market values. For many of those benefits the value is more social, cultural and environmental and cannot be given an economic price.

The paper says recognising the contributions of ecosystem services means more ecological, social and economic factors can be included in the trade-offs taken into account when making natural resource management decisions.

An analysis is given of the ecosystem services provided by Canterbury’s Opihi River and the impacts of the Opuha Dam. It shows that the only conclusive evidence for changes in ecosystem services ten years after construction was for water supply and flood protection.

The paper has been produced by the Royal Society of New Zealand as one of a series that seeks to inform the public on emerging and sometimes contentious issues around science and technology.

Download the paper here

Source: Royal Society Te Apārangi