Elgar original reference
Edited by Paulo A.L.D. Nunes, Pushpam Kumar and Tom Dedeurwaerdere
Economic analysis of causes and impact of biophysical changes like climate change, ecosystem services and biodiversity loss has commanded special attention in academic research as well as policy discourse. While the economic dimension of climate change has entered into a stage of being embraced and accepted by nearly everyone, it would be presumptuous to say this for ecosystem and biodiversity changes. How society is affected as a result of changes in the status and condition of ecosystems like forest and wetlands is clearly understood, at least to a great extent; the question remains how to capture those changes? One of the possible approaches typically suggested by the economics profession (admitting that economics is not a monolithic discipline) is to value the changes based on consumers' and producers' surplus-based concepts. However, the outcomes obtained through these approaches also create confusion and propel the need for credibility. In fact it may not be an exaggeration to state here that the bulk of the literature in economics of ecosystems and biodiversity is devoted to methodological nuances. Economic valuation of ecosystem services helps to identify and resolve the trade-offs between different stakeholders engaged in managing ecosystems. Ecosystem management plans often result in net gains for some sections of society and net losses for others. For example, forest conservation might increase carbon sequestration (a global benefit), but as a result, local populations might be deprived of access to forest and services like timber and non-timber forest products.