| Abstract |
The broad economic notion of Ecosystem Services (ES) refers to the benefits that humans derive, directly or indirectly, from ecosystem functions. Provisioning ES refer to human-centred benefits that can be extracted from nature (e.g., food, drinking water, timber, wood fuel, natural gas, oils etc.), whereas regulating ES include ecosystem processes that moderate natural phenomena (pollination, decomposition, flood control, carbon storage, climate regulation etc.). Cultural ES entail non-material benefits accruing to the cultural advancement of people, such as the role of ecosystems in national, and supranational cultures, recreation and the spur of knowledge and creativity (music, art, architecture). Finally, supporting ES refer to the main natural cycles that nature needs to function, such as photosynthesis, nutrient cycling, the creation of soils, and the water cycle. Most ES either depend on or provide freshwater services, so they are linked to Water Resources Management (WRM). The concept of ES initially had a pedagogical purpose to raise awareness on the importance of reasonable WRM, however, later it started being measured with economic methods, and having policy implications. The valuation of ES is an important methodology aimed at achieving environmental, economic and sustainability goals. The Total Economic Value (TEV) of ecosystems includes market values (priced) as well as non-market values (not explicit in any market) of different services for humanity's benefit. The valuation of ES inherently reflects human preferences and perceptions regarding the contribution of ecosystems and their functions to the economy and society. The ES concept and associated policies have been criticised on the technical weaknesses of the valuation methods, interdisciplinary conflicts (e.g., ecological vs economic perception of value), and ethical aspects on the limits of economics, nature's commodification, and its policy implications. Since valuation affects the incentives and policies aimed at conserving key ES, e.g., through payment schemes, it is important to understand the way that humans decide and develop preferences under uncertainty. Behavioural Economics attempts to understand human behaviour and psychology and can help to identify appropriate institutions and policies under uncertainty that enhance ecosystem services that are key to water resources management. |
