Healthy and functioning ecosystems provide a wide array of goods and services to the Canadian economy. These includes tangible market goods (food, fibre, fuel, fresh water, etc.) as well as more intangible processes (waste assimilation, pollination, carbon sequestration, nutrient cycling, etc.) and non-material benefits (nature appreciation, etc.).  These have become referred to as ecosystem goods and services (EG&S) or simply ecosystem services.

Benefits and challenges of integrating ecosystem goods and services into the market economy

EG&S are essentially the benefits provided by functioning ecosystems that help to sustain human life. While most market goods yielded from ecosystems are recognized widely as indispensable for economic development, many ecosystem services have historically not been recognized in the market system. Because most ecosystem services are not fully “captured” by commercial markets they are often not factored into land-use decisions and other decisions made by agricultural producers and governments. Furthermore, expressing ecosystem services in monetary terms presents many challenges; for instance, how do we put a price on the service of pollination provided by bees, bats and other insects? In Canada and around the world, policy-makers and other stakeholders have had a difficult time appreciating the importance of ecosystem services for the well-being of citizens.

Many stewardship practices, such as grazing management, wintering site management, soil conservation practices and others provide joint benefits to farmers and the public by simultaneously conserving and enhancing agricultural resources and production of crops and livestock while mitigating environmental impacts and enhancing agro-ecosystem function.  Where protecting EG&S does not directly support the production of agricultural crops, however, farmers’ extremely tight (or non-existent) profit margins, which stem from pressures to compete internationally and the increasing costs of inputs and capital, make it very difficult for farmers to attend to the goals of conservation.

A number of significant developments over the past decade have helped to further our understanding of the value of ecosystem services. In 1997, Robert Costanza and a host of other economists and ecologists published “The value of the world’s ecosystem services and natural capital” in the journal Nature.  The authors estimated the total economic value of the world’s ecosystem services to be roughly $33 trillion (US), double the world’s gross national product. While this figure should be considered crude and is not particularly useful for decision-makers, it nonetheless attracted significant attention to the importance of maintaining and protecting ecosystems worldwide. In 2001, United Nations Secretary-General Kofi Annan provided the impetus and support for a global assessment of the state of ecosystems worldwide. Four years later, with the help of 1,360 expert scientists, the Millennium Ecosystem Assessment was published with the startling conclusion that 60% of the world’s ecosystem services have been degraded. While the assessment noted that human-induced changes to ecosystems have provided substantial gains in well-being and economic development, the significant degradation of some ecosystem services (note this represents a trade-off between some - mostly market - EG&S such as wood, food and fibre vs others - usually non-market - such as water purification, climate regulation, biodiversity, etc…), as well as the increased likelihood of abrupt or unexpected changes, could pose a formidable obstacle to reducing global poverty and attaining the Millennium Development Goals.

Farmers own large land-holdings replete with wetlands, forests, and other ecosystems that provide Canadians with a myriad of benefits beyond food.  Internalizing non-market EG&S in the market system is one way to encourage producers to focus more strongly on nurturing and providing them.  It is important to note, however, that quantified ecosystem service values must be treated with a great deal of caution and consideration because non-market benefits are hard to estimate, they are strongly place-specific, and they are highly dependent on the presence and preferences of those making the estimations.

Basis in Agenda 21 and the Johannesburg Plan of Implementation

The importance of valuing and treating agricultural land for more than crop production is evident in Agenda 21, the blueprint of action for the 21^st century ratified by 179 countries at the United Nations Conference on Environment and Development in Rio de Janeiro in 1992. Chapter 8, entitled “Integrating Environment and Development in Decision-Making”, explicitly addresses the need to integrate environment and development into planning and to establish environmental and economic accounting systems. Chapter 14, entitled “Promoting Sustainable Agriculture and Rural Development”, discusses the need for management activities that “implement integrated agricultural projects that include other natural resource activities, such as management of rangelands, forests, and wildlife” as well as the need to integrate the “multifunctional aspect of agriculture” into agricultural policy.

The Johannesburg Plan of Implementation, a follow-up to Agenda 21 penned at the World Summit in 2002, remarked on the growing impact of human activities on the “integrity” of ecosystems to provide essential services to the economy, and noted that action is needed to manage “the natural resources base in a sustainable and integrated manner”.

Additional Resources:

• Anielski, M., & Wilson, S. Counting Canada’s Natural Capital: Assessing the Real Value of Canada’s Boreal Ecosystems. Nov. 2005.  http://www.pubs.pembina.org/reports/Boreal_FINAL.pdf    
• Costanza, R., d’Arge, R., de Groot, R., Farberk, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., O’Neill, R., Paruelo, J., Raskin, R., Sutton. P., & van den Belt, M. (1997). The value of the world's ecosystem services and natural capital. Nature, 387(6630), 253-260.
• Olewieler, N. The Value of Natural Capital in Settled Areas of Canada. 2004. http://www.sfu.ca/mpp/04research/pdfs/natural_capital.pdf

• Alternative Land-Use Services http://www.deltawaterfowl.org/alus/index.php
• Costa Rica Environmental Services Payment Program http://www.fonafifo.com/english.html
• Daily, G. Nature’s Services: Societal Dependence on Natural Ecosystems. WashingtonDC: Island Press. 1997.
• Heal, G. Nature and the Marketplace: Capturing the Value of Ecosystem Services. WashingtonDC: Island Press. 2000.
• Katoomba Ecosystem Marketplace http://www.ecosystemmarketplace.com
• Millennium Ecosystem Assessment http://www.millenniumassessment.org/en/index.aspx
• National Symposium on Ecological Goods and Services in Agriculture http://www.agr.gc.ca/pol/egs-bse/index_e.php

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