Economic Assessment of Goods and Services Delivered by Grasslands: Current Knowledge and Missing Research Links.

The Millennium Ecosystem Assessment was conducted to “assess the consequences of ecosystem change for human well-being and to establish the scientific basis for actions needed to enhance the conservation and sustainable use of ecosystems.”  The driving motive for this global initiative was the recognition that externalized costs of human economic activity are frequently the leading cause for declining ecosystem productivity.  Grasslands, which provide services upon which many human societies depend for their survival and prosperity, are globally among the most degraded group of ecosystems.  Recognition of the deficiencies of traditional economic techniques for estimating the value of ecosystems resulted in the development of new full valuation tools.  An early attempt was the controversial effort by Robert Costanza and his colleagues to estimate the total value the earth’s ecosystems.  More recently, the Sustainable Rangeland Roundtable, established to develop a standardized suit of indicators to monitor the health or rangeland ecosystems, including grasslands, categorized ecosystem services into: (1) Goods that can be extracted for consumption, and (2) Tangible and intangible services that generate value in situ.  Extractable goods are generally easily valued via adjusted market prices.  By contrast, in situ services are frequently more difficult to value because many exhibit non-exclusive or public good characteristics.  Numerous indirect valuation methods have been developed in recent years to address the limitation of market-based valuation tools for such in situ services.  Both direct market-based and indirect valuation techniques will be reviewed and compared.  Based on this comparison, knowledge and research gaps will be identified.  A recent initiative based on credit trading aimed at enhancing endangered species habitat will be described to identify how such gaps may be filled using novel market-based approaches.  The relevance of this case study will be discussed with respect to other, currently “unvalued” goods and services derived from grasslands.