Natural capital and ecosystem services: the ecological foundation of human society

Ecosystems provide both the energy and materials needed for the production of economic goods and services and act as a sink of wastes generated by the economic metabolism. Other nature's services benefits are obtained directly from nature, often without passing through transformation processes or the mediation of markets, as in the case of clean air, erosion control, aesthetic benefits, or climate regulation. Economic health in the long term thus depends on the maintenance of the integrity and resilience of the natural ecosystems in which it is embedded. The fact that standard economic theory neglects this aspect has been identified as a main cause of the current environmental problems and ecological crises. Approaches such as ecological and environmental economics attempt to deal with these shortcomings of standard economics through the development of concepts and accounting methods that better reflect the role of nature in the economy and the ecological costs derived from economic growth. Concepts such as natural capital, ecosystem functions and ecosystem services are playing a key role as tools to communicate societal dependence on natural ecosystems and in the articulation of a new form of understanding economics. This paper gives a brief overview of the key concepts for understanding the links between ecosystems and human well-being, and discusses a range of valuation and accounting methods as possible ways to measure the quantities and importance of natural capital and ecosystem services.