Ecological economics, Ecosystem services
This report summarizes the results of a two-year study of the economic value of New Jersey's natural capital. Natural capital consists of those components of the natural environment that provide a long-term stream of benefits to individual people and to society as a whole; the value of natural capital is defined in this report as the present value of that benefit stream. Many of the benefits provided by natural capital come from ecological systems ('ecosystems'); an ecosystem is a dynamic complex of plant, animal, and microorganism communities and their nonliving environment, all interacting as a functional unit. The benefits provided by natural capital include both goods and services; goods come from both ecosystems (e.g., timber) and abiotic (non-living) sources (e.g., mineral deposits), while services are are mainly provided by ecosystems. Examples of ecosystem services ('ecoservices') include temporary storage of flood waters by wetlands, long-term storage of climate-altering greenhouse gases in forests, dilution and assimilation of wastes by rivers, and numerous others. All of these services provide economic value to human beings. The goods provided by New Jersey's natural capital are covered in a separate study; this report focuses on the services provided the state's ecosystems, covering twelve different types of ecosystem and twelve different ecoservices. For policy, planning, and regulatory decisions, it is important for New Jerseyans to know not only what ecosystem goods and services will be affected by public and private actions, but also what their economic value is relative to other marketed and non-marketed goods and services, such as those provided by physical capital (e.g., roads), human capital investment (e.g., education), etc. As a way of expressing these relative values or "trade-offs", this study estimated the dollar value of the ecoservices produced by New Jersey's ecosystems. In deriving these estimates, we used three different approaches: value transfer, hedonic analysis, and spatial modeling.
Costanza, R., Wilson, M., Troy, A., .Voinov, A., Liu, S., and D'Agostino, J. (2006, July).The Value of New Jersey’s Ecosystem Services and Natural Capital. New Jersey Department of Environmental Protection