The concept of Total Economic Value (TEV) of ecosystem services is a framework used to quantify and assess the full range of benefits that ecosystems provide to society, including both market and non-market values.
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Ecosystem services are the direct and indirect contributions of ecosystems to human well-being, encompassing provisioning, regulating, supporting, and cultural services. The TEV framework recognizes that ecosystems contribute to human welfare in multiple ways, and these contributions can be valued using economic methods. Here’s a breakdown of the components of TEV:
1. Use Values:
Use values are associated with direct use of ecosystem services and can be divided into two categories:
a. Direct Use Value:
- Provisioning Services: These are tangible products obtained from ecosystems, such as food, water, timber, and medicinal plants. The direct use value of provisioning services is based on market prices or the cost of substitutes.
- Example: The value of fish caught from a river, the value of timber harvested from a forest, or the value of crops grown in agricultural fields.
b. Indirect Use Value:
- Regulating and Supporting Services: These are services that ecosystems provide indirectly, such as climate regulation, water purification, soil fertility, and pollination. The indirect use value is often estimated based on the cost of human-made alternatives or avoided costs.
- Example: The value of wetlands in purifying water, the value of forests in sequestering carbon dioxide, or the value of bees in pollinating crops.
2. Non-Use Values:
Non-use values are associated with the benefits people derive from ecosystems without directly using them. These values are not reflected in market transactions and are typically assessed through economic valuation techniques:
a. Existence Value:
- This represents the value people place on knowing that ecosystems and species exist, even if they never directly experience or use them.
- Example: The value placed on preserving biodiversity and endangered species for future generations’ enjoyment and appreciation.
b. Option Value:
- This represents the value people place on having the option to use or benefit from ecosystems in the future, even if they do not currently use them.
- Example: The value of preserving natural habitats for potential future scientific, recreational, or economic opportunities.
c. Bequest Value:
- This represents the value people place on preserving ecosystems for future generations, reflecting intergenerational equity concerns.
- Example: The value of conserving natural landscapes and ecosystems as a legacy for future generations to inherit and enjoy.
d. Altruistic Value:
- This represents the value people place on preserving ecosystems for the benefit of others or for moral or ethical reasons.
- Example: The value individuals derive from knowing that their actions contribute to the well-being of other people, communities, or species.
Total Economic Value (TEV):
The Total Economic Value of ecosystem services is the sum of all use and non-use values associated with ecosystems. By capturing the full range of benefits provided by ecosystems, the TEV framework helps policymakers, land managers, and stakeholders make more informed decisions about ecosystem management, conservation, and resource allocation. It emphasizes the importance of recognizing and accounting for the multiple ways in which ecosystems contribute to human well-being, beyond just their marketable goods and services. Integrating TEV assessments into decision-making processes can lead to more sustainable and equitable management of natural resources and ecosystems, ultimately contributing to long-term human welfare and environmental sustainability.