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    The importance or “value” of ecosystems is viewed and expressed differently by different disciplines, cultural conceptions, philosophical views, and schools of thought. Valuation is used as a tool that enhances the ability of decision-makers to evaluate trade-offs between alternative ecosystem management regimes and courses of actions that alter the use of ecosystems and the services they provide.
    The valuation of FES can provide input for decisions at many different levels. This ranges from national and international policy decisions to regional and sub-regional decisions and local planning decisions and projects. The challenge in each case is to identify all the FES that will be affected by the decision and to obtain sufficient information to conduct the ecosystem service assessment, including linking the assessment of changes in service provision to measures of changes in human welfare.

    There are a number of other reasons for undertaking valuation of FES. The most common are as follows:

    • to assess and improve the overall contribution of forests ecosystems to social and economic well-being,
    • to obtain information about the relative importance of FES and preferences for their provision across and from different stakeholder groups and understand how and why stakeholders use forests as they do,
    • to assess the relative impact of alternative actions, as a decision support tool,
    • to identify potential winners and losers when adopting a certain management alternative,
    • evaluating the impacts of environmental policies,
    • establishing incentive schemes or markets of FES.

    It should be also noted that some kind of valuation is an implicit prerequisite for developing mechanisms to capture benefits of the services and in establishing finance/incentive systems such as payments for ecosystem services (PES).

    Valuation approaches and methods

    A number of different economic valuation approaches and methods have been developed so far to determine the value of FES.
    Below you can find an overview of valuation of approaches and methods including a description of each of them, its suitability for FES to be valued, list of benefits and limitations of its implementation, and case example from different FOREST EUROPE signatory countries.


    Selecting the economic valuation method
    Limitations to economic valuation

    Further reading:

    Baveye, P. C., Baveye, J., Gowdy, J. 2013. Monetary valuation of ecosystem services: it matters to get the timeline right. Ecological Economics, 95, 231–235.

    Binner, A., Smith, G., Bateman I., Day, B., Agarwala, M., Harwood, A. 2017. Valuing the social and environmental contribution of woodlands and trees in England, Scotland and Wales. Edinburgh: Forestry Commission, 120 p.

    DEFRA. 2007. An introductory guide to valuing ecosystem services, Department for Environment, Food and Rural Affairs, London, UK.

    European Commission. 2008. Study on the Development and Marketing of Non-Market Forest Products and Services. DG AGRI, Study Contract No: 30-CE-0162979/00-21. Study report. 145 p.

    Hadley, D., D’Hernoncourt, J., Franzén, F., Kinell, G., Söderqvist, T., Soutukorva, Å., Brouwer, R. 2011. Monetary and non-monetary methods for ecosystem services valuation – Specification sheet and supporting material, Spicosa Project Report, Norwich: University of East Anglia.

    Liu, S., Costanza, R., Farber, S., Troy, A. 2010. Valuing ecosystem services. Annals of the New York Academy of Sciences, 1185, 54-78.

    National Capital Committee. 2017. Economic valuation and its applications in natural capital management and the Government´s 25 Year Environment Plan.

    Pascual, U., Muradian, R. 2010. The economics of valuing ecosystem services and biodiversity. The Economics of Ecosystems and Biodiversity: The Ecological and Economic Foundations, 117 p.

    Sarvašová, Z., Kovalčík, M., Dobšinská, Z., Šálka, J., Jarský, V. 2014. Ecosystem services – examples of their valuation methods in Czech Republic and Slovakia. Change and adaptation in socio-ecological systems,1, 74-83.

    TEEB. 2010. Integrating the ecological and economic dimensions in biodiversity and ecosystem services valuation. In: The Economics of Ecosystems and Biodiversity Ecological and Economic Foundations. London and Washington: Earthscan

    Thorsen B.J., Mavsar R., Tyrväinen L., Prokofieva I., Stenger A. (editors). (2014). The Provision of Forest Ecosystem Services  -What Science Can Tell Us 5, 2014 Volume I: Quantifying and valuing non-marketed ecosystem services

    UNECE/UNEP/FAO (2014): The Value of Forest: Payments for Ecosystem Services in a Green Economy. Geneva Timber and Forest Study Paper 34