Biodiversity and Ecosystem Services

Species protection and the fundamental source of value

Content

TBD.

Transcript

Learning objectives

After this chapter, you should be able to:

  • Explain what economists mean by ecosystem services.
  • Distinguish between provisioning, regulating, cultural, and supporting services.
  • Describe how biodiversity underpins economic production and risk.
  • Explain why biodiversity loss is an Earth–economy problem, not just an environmental one.
  • Describe how Earth–economy models represent ecosystems as productive assets.
  • Explain why land-use decisions are central to sustainability.

From “nature” to life-support systems

Biodiversity is often discussed as:

  • species counts,
  • charismatic animals,
  • or wilderness.

In an Earth–economy framing, biodiversity is:

The living infrastructure that makes economies possible.

Ecosystems perform work:

  • pollinating crops,
  • purifying water,
  • stabilizing soils,
  • regulating climate,
  • buffering floods and storms,
  • controlling pests and disease.

These are ecosystem services—flows of value generated by natural capital.

When ecosystems degrade, the economy does not merely “lose beauty.”
It loses productive capacity and resilience.

Four families of ecosystem services

A standard classification:

  1. Provisioning services
    • food, timber, fiber, fuel, freshwater
  2. Regulating services
    • climate regulation
    • flood protection
    • water purification
    • disease control
  3. Cultural services
    • recreation
    • spiritual value
    • identity and heritage
  4. Supporting services
    • nutrient cycling
    • soil formation
    • primary production

Provisioning services resemble traditional resources.
Regulating and supporting services are invisible until they fail.

Why biodiversity loss is an economic risk

Biodiversity loss:

  • reduces productivity (e.g., pollination, fisheries),
  • increases volatility (e.g., pest outbreaks, crop failure),
  • weakens buffers (e.g., floods, heat),
  • raises future costs.

These effects are:

  • spatially uneven,
  • delayed,
  • and often irreversible.

They therefore behave like:

A slow erosion of the economy’s shock absorbers.

GDP can rise while resilience collapses.

Land use as the hinge

Most biodiversity loss is driven by:

  • agriculture expansion,
  • infrastructure,
  • urbanization,
  • extraction.

Land-use change links:

  • global demand,
  • local livelihoods,
  • habitat loss,
  • and ecosystem services.

A consumption decision in one country can:

  • change land cover in another,
  • affect water and carbon cycles,
  • and alter biodiversity thousands of kilometers away.

This is telecoupling—
a hallmark of Earth–economy systems.

Ecosystems inside Earth–economy models

Earth–economy models represent ecosystems by:

  • tracking land cover and habitat,
  • modeling biophysical processes,
  • linking them to services,
  • and connecting services to economic outcomes.

For example:

  • Forest cover affects:
    • carbon stocks,
    • flood risk,
    • water yield,
    • pollinator habitat.
  • These affect:
    • crop yields,
    • infrastructure damage,
    • health,
    • and income.

The model can then ask:

  • How does a road change land use?
  • How does that alter services?
  • How do those changes affect production and welfare?
  • How does that feed back into land demand?

Biodiversity becomes part of the economic circuit.

Policy as system design

Biodiversity policy is not just about parks.

It includes:

  • land-use zoning,
  • agricultural subsidies,
  • infrastructure planning,
  • trade policy,
  • restoration investment.

Each shapes:

  • where activity occurs,
  • which ecosystems persist,
  • and which services survive.

A protected area:

  • may conserve habitat,
  • raise nearby land prices,
  • shift agriculture elsewhere,
  • and change trade flows.

Partial analysis sees only protection.
Earth–economy analysis sees the whole ripple.

The Doughnut perspective

Biodiversity loss pushes society:

  • beyond ecological ceilings,
  • and often below social foundations (food security, disaster risk).

A strategy that protects nature but ignores livelihoods:

  • may preserve species,
  • but deepen poverty.

A strategy that maximizes production:

  • may reduce poverty,
  • but destabilize ecosystems.

The Doughnut frames the target.

Earth–economy models test whether a path stays inside it.

Open resources you can remix for this chapter

All are compatible with a CC BY-NC-SA Quarto book.

  • Natural Resources Sustainability: An Introductory Synthesis (CC BY-NC-SA)
    Use for: ecosystem services and sustainability framing.
    https://uen.pressbooks.pub/naturalresourcessustainability/

  • Principles of Economics (UMN Libraries Publishing, CC BY-NC-SA)
    Use for: public goods, externalities, and valuation logic.
    https://open.umn.edu/opentextbooks/textbooks/principles-of-economics

  • InTeGrate teaching materials (many CC BY-NC-SA)
    Use for: biodiversity, land-use change, and ecosystem service activities.
    https://serc.carleton.edu/integrate/teaching_materials/index.html

Exercises

  1. Service identification.
    For each ecosystem, list one regulating service:

    • wetlands
    • forests
    • coral reefs
    • grasslands

  2. Land-use ripple.
    Choose a product you consume (beef, coffee, palm oil).
    Trace a plausible chain from demand to land-use change to ecosystem impact.

  3. Modeling thought experiment.
    Describe how a new highway could affect:

    • habitat,
    • ecosystem services,
    • production,
    • and long-run wealth.