Valuation of Biodiversity, Ecosystem Services, and Natural Capital

Abstract

This chapter critically evaluates the existing valuation approaches of biodiversity, ecosystem services, and natural capital, positing their inadequacy as a principal driver of environmental destruction and threats to human existence on planet Earth. The current neoliberal economic model recognizes only the tangible benefits and market-determined commodity values, thereby neglecting the invaluable ecological services contributions from diverse ecosystems and biotic communities. Such disregard for the natural ecosystem’s life support services and material inputs, fundamental to the production of human-made goods, necessitates a revision in economic valuation systems, with the principle of opportunity cost applied to maintaining a healthy natural ecosystem. This chapter argues for the valuation of entire ecosystems, recognizing their potential for generating goods and services vital for human well-being and happiness. The intertwined nature of the economic system and natural ecosystem signifies the urgent need for our policies and valuation strategies to abide by ecological laws and principles, with an emphasis on protecting and maintaining healthy ecological systems. The discourse around the valuation of natural systems, encompassing biodiversity and ecosystem processes, has become a pivotal issue among professionals in conservation, environmentalism, and economics. This chapter underscores the urgent need for experts from various disciplines particularly ecology, biology, agriculture, and economics to collaborate in develo** valuation techniques and approaches that integrate both the instrumental and intrinsic values provided by biodiversity and ecosystems. The Safe Minimum Standard (SMS) evaluation approach, which recognizes nature’s intrinsic values and safeguards landscape-level ecological processes critical for the preservation of species and ecosystem services, is a strong contender. This chapter asserts that modern development planning must endorse an integrated approach grounded in  the understanding of ecological and human systems, calling for increased involvement of ecological economists, environmentalists, biologists, system ecologists, natural resource managers, social scientists, and mainstream economists in the planning and development processes. Planning must evolve from a mere tool for rapid economic-political decision-making to an institution for informed political decision-making, guided by the knowledge of ecosystem functioning and services, fundamental for the survival and well-being of humanity and life on planet Earth.

Living systems are cognitive systems, and living as a process is a process of cognition. This statement is valid for all organisms, with and without a nervous system. Our cognitive process differs from the cognitive processes of other organisms only in the kinds of interactions into which we can enter, such as linguistic interactions, and not in the nature of the cognitive process itself.

Maturana (1980)