Research History

1998-2000 Ecological Pricing of Biosphere Processes - $8,000

This project has partly been sponsored by the National Center of Ecological Analysis and Synthesis, University of California, Santa Barbara, as well as through Landcare Research Ltd. Ecological pricing theory and methodology is reviewed, and then used as a tool to value biosphere processes and services.

The ecological pricing method values biosphere processes on the basis of biophysical interdependencies in the ecological or economic system. As such, it tends to highlight species, processes or functions that may not be quantified in conventional neo-classical valuations. The application of the ecological pricing method to the biosphere for 1994 indicates the total value of primary ecological inputs (services) to be nearly $25 trillion, according to the 'shadow pricing' approach of ecological pricing. This figure compares with $33 trillion obtained in the Costanza et al. (1997) study.

Our analysis also indicated a good correspondence between the shadow ecological price and the observed market price for all marketable goods, except fossil fuel, which was undervalued by the market. Dr Patterson's involvement in the NCEAS "Working Group on the Value of World's Ecosystem Services and Natural Capital: Towards an Integrated Approach" has assisted this research.