More than total economic value: How to combine economic valuation of biodiversity with ecological resilience

a r t i c l e i n f o Keywords: Total economic value Biodiversity Ecosystem services Ecosystem functioning Functional diversity Ecosystem resilience Insurance value Portfolio theory The assessment of total economic value has become a pragmatic and popular approach in nature valuation, yet criticisms have been raised. One major point of critique is that total economic value bases the monetary value of ecosystems purely on the flow of human benefits of services of ecosystems and consequently ignores questions of sustainable use of natural capital per se. This paper explains why total economic value by itself is in principle an inadequate concept to guide sustainable use of ecosystems and gives an overview of essential ecological theory that needs to be taken into account in addition to total economic value to fully include ecosystem sustainability. The paper concludes with a framework for combining ecological theory with economic valuation. The key elements here are theoretical ecological insights about ecosystem resilience and portfolio theory which offers an economic perspective on investment in biodiversity. Portfolio theory puts total economic value in a framework where investment in biodiversity is expanded to cover functional diversity and mobile link species in order to maintain ecosystem resilience and so fosters sustainable use of ecosystems. Economic valuation of the services provided by nature is widely perceived by scientists and policy makers as an appealing and important approach to support management decisions (Costanza et al. The use of economic values is attractive in that it enables nature to be taken into account in social development, research and policy and promises sustainable use of natural resources, landscape restoration and efforts of conservation. The most inclusive way of economic valuation of nature is through a total economic value assessment. Total economic value is an expression of the total value of the benefits derived from a marginal change in an ecosystem, expressed in monetary terms, which can subsequently be used in cost–benefit models. Total economic value is especially attractive because it aims to cover all expressions of value, including use values and non-use values of ecosystems. For an overview, see Bateman et al. Existing economic valuation methods that are used in total economic value calculations, such as production function approaches and contingent valuation methods, refer to the value of nature to humans, supposedly acting as rational actors (Bockstael et al., 2000; Farber et al., 2002). The aggregate of their individual preferences forms …