Valuing natural capital and ecosystem services toward the goals of efficiency, fairness, and sustainability

Background

Natural capital (NC) and ecosystem services (ES) are fundamental to sustaining human life, but valuing them requires a whole-system understanding of the interdependencies between humans and nature. Conventional economic valuation, based solely on individual willingness-to-pay, is too narrow for this complex task.

Goals and Methods

This article reviews and advocates for an integrated valuation approach based on three sub-goals of sustainable well-being: efficient allocation (E-value), fair distribution (F-value), and sustainable scale (S-value). E-value uses individual preferences but must be improved with insights from behavioral economics. F-value employs deliberative, community-based processes to determine fair outcomes. S-value relies on integrated, dynamic modeling to understand contributions to long-term ecological sustainability. The paper also discusses institutional mechanisms like Payments for Ecosystem Services (PES) and Common Asset Trusts (CATs) to manage ES as public goods.

Conclusions and Takeaways

The author concludes that the practical application of NC and ES concepts is still limited but rapidly improving. An integrated EFS (Efficiency, Fairness, and Sustainability) valuation framework, grounded in ecosystem science and behavioral economics, provides a more sophisticated and actionable approach. Progress in big data, participatory modeling, and online deliberation is making this integration more feasible. The ultimate goal is to develop models to guide society toward a sustainable and desirable future for both humanity and the rest of nature.