Humans are intricately connected to the natural environment. All aspects of our economy and society is underpinned by the functions and services ecosystems provide us.
Ecosystem services refer to the benefits that people receive from the environment. There are four ways in which ecosystems provide services to humans:
– Provision of food, water, fuel, raw materials
– Regulation of climate, flood, disease, water purification
– Support of essential processes such as nutrient cycling, soil formation, primary production
– Cultural services in the form of recreation, aesthetics, spiritual and education functions
These services are linked to human well-being in the form of security, basic materials, health, social cohesion, and freedom, as shown in the figure below:
The 2005 Millennium Ecosystem Assessment was a worldwide assessment undertaken to assess, identify and quantify all effects of human activity on the environment. The report served to provide the scientific basis for action to conserve the world’s ecosystems and outline ways to use them sustainably.
Some of the key components of the report highlighted the issues of land use and conversion of land to cultivated systems (i.e. deforestation), the loss of coral reefs, water withdrawal and use, the collapse of global fisheries, trends in the nitrogen and phosphorus cycles, and human population growth. The report stated that 60% of the world’s ecosystem services have been degraded or used unsustainably.
This short video seeks to put into perspective the fragile relationship shared between human and ecosystem well-being: “The Economics of Well-Being” – Cultural Video Foundation
The single most important factor underpinning ecosystem services and functions is biodiversity. The term Biodiversity means the variability of living things, such as the diversity within species, between species, and of ecosystems. At the highest level, it considers the variety across the world’s ecosystem. At the lowest level, it considers the variety of genes. Biodiversity is important because it provides ecosystem services, and ensure that natural systems are resilient to external shocks and change, acting as an insurance policy to maintain ecosystem function. For example, if one species goes extinct, then a biodiverse system would allow for other species to take up the role it played in the ecosystem.
Biodiversity is essential to manage food security, disease and pest control, economic potential, provision of clean air and water, and so on. The United Nations Strategic Plan for Biodiversity 2011 – 2020 has outlined 20 targets, known as the Aichi Targets, relating to biodiversity. Four of these targets are directly relevant to business.
Aichi Targets for biodiversity that are relevant to business
Target 2: By 2020, at the latest, biodiversity values have been integrated into national and local development and poverty reduction strategies and planning processes and are being incorporated into national accounting, as appropriate, and reporting systems.
Target 3: By 2020, at the latest, incentives, including subsidies, harmful to biodiversity are eliminated, phased out or reformed in order to minimize or avoid negative impacts, and positive incentives for the conservation and sustainable use of biodiversity are developed and applied, consistent and in harmony with the Convention and other relevant international obligations, taking into account national socio-economic conditions
Target 4: By 2020, at the latest, governments, business and stakeholders at all levels have taken steps to achieve or have implemented plans for sustainable production and consumption and have kept the impacts of use of natural resources well within safe ecological limits.
Target 15: By 2020, ecosystem resilience and the contribution of biodiversity to carbon stocks has been enhanced, through conservation and restoration, including restoration of at least 15 per cent of degraded ecosystems, thereby contributing to climate change mitigation and adaptation and to combating desertification
Human activity places direct and indirect pressure on ecosystems and is a major driver of biodiversity loss. The diagram below shows how many of our industries are contributing to loss of habitat, over-exploitation of natural resources, creation of pollution, movement of species, and climate change.
Ecosystem Service Valuation
Ecosystems provide our society with natural capital and contribute both directly and indirectly to human well-being. They can be valued in an economic sense, by assessing their direct and indirect use, and even non-use in terms of dollars. These types of valuations inform many policy and investment decisions for exploiting or conserving natural resources.
This video summarizes the importance and need for the valuation of ecosystem services: “Valuing Ecosystem Services” – Grund Institute (University of Vermont)