Economic Valuation of Ecosystem Services: Conflicts in Classification

The policy brief examines conflicts in the classification of ecosystem services (ES) for economic valuation, specifically critiquing the Millennium Ecosystem Assessment (MA) framework. By analyzing 25 valuation studies of water services in Central American tropical forests published between 1985 and 2009, the authors demonstrate that the MA framework can lead to double counting and the underestimation of service values. They propose that valuation should focus on the final outcomes (outputs) that impact human welfare rather than ecological processes. This distinction is presented as critical for accurate natural capital measurement in national accounting systems like the System of Integrated Environmental and Economic Accounting (SEEA).

• The authors identify four primary areas of disagreement in the classification of ecosystem services for valuation: the definition of the services, which specific services should be valued, whether to include non-market and non-use values, and whether services should be strictly defined as ecological phenomena (excluding cultural or scenic values).
• The Millennium Ecosystem Assessment (MA) framework is criticized for not focusing on the final outcomes that generate impacts on human welfare, which are the elements that actually possess economic value.
• Using the MA framework for economic valuation creates a risk of double counting when a process is valued separately from its output; for example, valuing water flow as a service and then separately valuing hydropower generation.
• The MA framework can lead to the underestimation of total ecosystem values when multiple services of different output natures are grouped into a single MA category and assigned a single value, such as combining water flow maintenance and sediment load reduction under 'regulating services'.
• An analysis of 25 valuation studies from Central American tropical forests (1985–2009) supports the conclusion that an output-based classification yields more accurate economic values than the MA categories.

APA

Ojea, E., Martin-Ortega, J., & Chiabai, A. (2011). Economic Valuation of Ecosystem Services: Conflicts in Classification. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201101141230521901184638.pdf

Chicago

Ojea, Elena, Julia Martin-Ortega, and Aline Chiabai. Economic Valuation of Ecosystem Services: Conflicts in Classification. Basque Centre for Climate Change, 2011. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201101141230521901184638.pdf.

Wikipedia

{{cite report |last1=Ojea |first1=Elena |last2=Martin-Ortega |first2=Julia |last3=Chiabai |first3=Aline |title=Economic Valuation of Ecosystem Services: Conflicts in Classification |publisher=Basque Centre for Climate Change |date=January 2011 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201101141230521901184638.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ojea2011economic, author = {Ojea, Elena and Martin-Ortega, Julia and Chiabai, Aline}, title = {{Economic Valuation of Ecosystem Services: Conflicts in Classification}}, institution = {Basque Centre for Climate Change}, year = {2011}, month = jan, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201101141230521901184638.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }