Last year Robert Costanza published an update to his seminal 1997 paper The Value of the World’s Ecosystem Services and Natural Capital.  Here’s what I had to say about that in 2014:

The paradox is that because nature has so far provided many services in abundance, they are not “scarce” in an economic sense and our human markets place little or no monetary value on them. This would change in the event our human civilization caused the services to be reduced or interrupted in any way. While it may seem strange to value ecosystem services in monetary terms, it can be instructive to ask what we would be willing to pay if we had no choice but to pay for these services. There are many conceptual and practical challenges with this sort of monetary valuation, but there have been some brave attempts to do it, such as those led by Robert Costanza at the Australian National University.[9] By comparing the magnitude of what we would be willing to pay for these services to the magnitude of the human economy, we can get a sense of the importance of ecosystem services in underpinning our human economy. Costanza’s estimate of the annual value of global ecosystem services ($33 trillion in 1997 U.S. dollars) is the same order of magnitude as the world output of goods and services in that year (approximately $29 trillion[10])! While the estimated value of ecosystem services is certainly less precisely measured than the monetary value of goods and services produced, the order of magnitude suggests that humanity could not afford to substitute its own technology and efforts in place of the services provided by ecosystems, at least not with the wealth and knowledge available to us now.

The new paper is called Changes in the Global Value of Ecosystem Services. Here’s the abstract:

In 1997, the global value of ecosystem services was estimated to average $33 trillion/yr in 1995 $US ($46 trillion/yr in 2007 $US). In this paper, we provide an updated estimate based on updated unit ecosystem service values and land use change estimates between 1997 and 2011. We also address some of the critiques of the 1997 paper. Using the same methods as in the 1997 paper but with updated data, the estimate for the total global ecosystem services in 2011 is $125 trillion/yr (assuming updated unit values and changes to biome areas) and $145 trillion/yr (assuming only unit values changed), both in 2007 $US. From this we estimated the loss of eco-services from 1997 to 2011 due to land use change at $4.3–20.2 trillion/yr, depending on which unit values are used. Global estimates expressed in monetary accounting units, such as this, are useful to highlight the magnitude of eco-services, but have no specific decision-making context. However, the underlying data and models can be applied at multiple scales to assess changes resulting from various scenarios and policies. We emphasize that valuation of ecoservices (in whatever units) is not the same as commodification or privatization. Many eco-services are best considered public goods or common pool resources, so conventional markets are often not the best institutional frameworks to manage them. However, these services must be (and are being) valued, and we need new, common asset institutions to better take these values into account.

So $125 trillion dollars per year in value, and last year the IMF says the world economy was about $77 trillion. This is important for a few reasons. First, it strengthens the argument even further that ecosystem services are not just something happening on the fringe of our economy that give us a helping hand. They are absolutely essential and we could not afford to do without them. Second, if I understand correctly, the annual value we can derive is lower per unit area of land because of degradation of the land since 1997. Every year we are using up $4-20 trillion that the Earth is not able to replenish. That value is hard to put in context, because we don’t know what the total stock is, or how low that stock could fall before it would start to constrain our economy.

There’s another implication – if we could develop a precise accounting of the natural capital being used up each year, we could orient our economy to shift more of those costs to the people, governments, and business entities choosing to impose those costs on the rest of us. Carbon taxes are a fairly obvious first step.