Tallis, H., Polasky, S., Lozano, J.S. and Wolny, S. (2012). Well-being and wealth. In UNU-IHDP and UNEP. Inclusive Wealth Report 2012. Measuring progress toward sustainability. Cambridge: Cambridge University Press
Key Messages from Chapter
Studies that have sought to value natural capital have typically focused on “provisioning” services or natural resource stocks such as oil and natural gas, minerals, timber, and fisheries. Other than the cost of CO2 emissions vis-à-vis climate regulation, regulating services have not been considered in any great depth.
An important first step for including regulating services in an inclusive wealth framework is to have well-defined individual services. The present typology of regulating services does not lend itself well to wealth accounts because multiple services are embedded within common regulating service category. Identifying individual services also simplifies the valuation process.
It is important to identify servicesheds in order to estimate the value of ecosystem services. A serviceshed is the area that provides a specific benefit to a specific individual or group of people. It is further characterized by three factors: (1) ecosystem supply; (2) institutions; and (3) physical access.
Due to the high degree of uncertainty in estimating the value of regulating services, it will be useful for policy-makers to see a range of values with lower and upper bound estimates. We provide such uncertainty analyses for climate regulation through carbon sequestration.
The marginal net benefit of regulating services is large enough to justify undertaking future research in identifying servicesheds, unbundling regulatory services into explicit benefits, and producing value estimates for inclusion in wealth accounts.