Dr. James Boyd is the Director of Social Science and Policy at SESYNC (the National Socio-Environmental Synthesis Center), as well as the Director of RFF’s Center for the Management of Ecological Wealth and a senior fellow at Resources for the Future (Washington, DC). Dr. Boyd’s work focuses on the quantification and management of ecological resources and services. He graduated from the University of Pennsylvania’s Wharton School in 1993, with a PhD in microeconomics. Before working at SESYNC, Dr. Boyd worked for the RFF’s Energy and Natural Resources Division as a visiting Professor at both Stanford University and Washington University in St. Louis. He has also served with a variety of environmental advisory groups (including the National Academy of Science and the US EPA Science Advisory Board) and has performed environmental consulting work for a variety of consulting firms and agencies including the European Commission and the World Bank.
This lesson is intended as a primer for understanding environmental economics, focusing particularly on the valuation of ecosystem services. The first section of the presentation focuses on an economist’s typical perspective on how ecosystem services are to be analyzed – and in particular on the kinds of ecological analysis and outcomes needed for economic evaluation. Boyd stresses the importance of being able to describe the effect of specific management actions on changed ecological outcomes via ecological “production functions.” He also stresses the importance of measured or modeled ecological outcomes that can be understood by lay audiences. Ecological analysis that causally relates specific management actions to changes in socially understandable biophysical outcomes allows for those outcomes to be valued in monetary terms.The second section of the presentation focuses more heavily on how to economically quantify the importance of ecosystem services. In order to fix a monetary value on an environmental variable that will affect ecosystem services, a variety of factors need to be taken into account: how many people are affected by this environmental outcome? What is the scale of the problem you are trying to address? How scarce are the resources involved? Are there substitutes for the ecosystem services that are becoming damaged or lost? As a result, when one is trying to fix a monetary value on an ecosystem – or communicate its benefit in non-monetary terms – it is important to capture such factors in the analysis. Boyd also discusses reasons why many economic studies under-estimate the total value of ecosystems.