COMMENTARY Tracing radioisotopes

The plague, women, and modern economy—it’s complicated




LETTERS edited by Jennifer Sills


Melbourne Sustainable Society Institute, University of Melbourne, Victoria, 3010 Australia. 2National Accounts Department, Statistics Netherlands, 2492 JP, The Hague, Netherlands. 3Faculty of Economics and Business Administration, VU


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*Corresponding author. E-mail: [email protected]

References 1. United Nations, European Commission, Food and Agriculture Organization of the United Nations, International Monetary Fund, Organisation for Economic Co-operation and Development, World Bank, “System of EnvironmentalEconomic Accounting 2012: Central Framework, prepublication (white cover)” (2012); unsd/envaccounting/White_cover.pdf. 2. United Nations, European Commission, Organisation for Economic Co-operation and Development, World Bank, “System of Environmental-Economic Accounting 2012: Experimental Ecosystem Accounting, pre-publication (white cover)” (2013); envaccounting/eea_white_cover.pdf. 3. Office for National Statistics, Input-Output Supply and Use Tables—2013 Edition (2013).

Ecosystem Services: The Farmers’ Challenge WE READ THE RESEARCH ARTICLE “BRINGING ecosystem services into economic decisionmaking: Land use in the United Kingdom” (I. J. Bateman et al., 5 July, p. 45) with interest. The National Farmers’ Union believes that one of the biggest challenges facing farmers and growers in England and Wales will be balancing their commitment to meeting global food demand with their responsibility to reduce environmental impact. We feel that the economic valuations assigned to ecosystem services should be treated with some caution, as the National Ecosystem Assessment model is far too simplistic. By crudely comparing market prices for agricultural produce against the value of nonmarket goods such as biodiversity, the model disregards the fact that market power may diminish the prices that farmers receive for their output to a level below the value that consumers place on their food. It also fails to account for likely future increases in food prices. Furthermore, Bateman et al.’s analysis suggests that “farming in the United King-

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IN THEIR RESEARCH ARTICLE “BRINGING ECOSYSTEM SERVICES INTO ECONOMIC DECISION making: Land use in the United Kingdom” (5 July, p. 45), I. J. Bateman et al. demonstrate the importance of considering nonmarket ecosystem services in economic decision-making. It is an excellent example of the potential for national-level spatial analysis of economic and environmental information to inform policy choices. The drive to connect economic and environmental information mirrors the ongoing developments in environmental-economic accounting. Over the past 6 years, the international statistics community has led work to finalize an international standard—the UN System of Environmental-Economic Accounting (SEEA) (1)—and to place the measurement of ecosystem services and ecosystem condition into a national accounting context (2). The development of these statistical frameworks provides the basis for compiling internationally comparable data sets at a national level on the relationship between the environment and economic activity. Despite their common motivations, the approaches of Bateman et al. and the SEEA differ in the ways that they assign value to ecosystem services. Bateman et al. ground their analysis in welfare changes as a consequence of specific policy scenarios. The SEEA approach aims to record the “output” generated by ecosystems, given current uses of ecosystem capital; thus, monetary values represent exchange values consistent with the principles of national accounting. The SEEA approach provides a way to place welfare-based estimates in a broader context. According to Bateman et al., the maximization of all monetary values leads to an increase of £19,606 million per year with a loss of £448 million in agricultural output [Table 3 in (3)]. This loss equates to just over 2% of current UK agricultural output, and the overall impact of including nonmarket services as a proportion of GDP is an additional 1.3% (3). However, there are some important differences between the definitions of economic activity used by Bateman et al. and standard national accounting, which may limit the interpretation of such comparisons. By integrating estimates of ecosystem services within the framework of accepted economic data, the SEEA approach can provide additional impetus to mainstream these types of studies. Therefore, in addition to the calls by Bateman et al. to ensure the use of additional information on ecosystem services within standard decision-making, we call for investment to improve the quality of the underlying data within a widely accepted and integrated measurement framework such as the SEEA. The availability of quality data is an important precondition to analysis that should not be overlooked.

University Amsterdam, 1081 HV, Amsterdam, Netherlands. 4 Environmental Systems Analysis Group, Wageningen University, 6700 AA, Wageningen, Netherlands.


Ecosystem Services: Accounting Standards

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8QH, UK. 2School of Geosciences, University of Aberdeen, King’s College, Aberdeen, AB24 3UE, UK. 3East Malling Research, East Malling, Kent, ME19 6BJ, UK. 4School of Agriculture, Policy and Development, University of Reading, Whiteknights, Reading, RG6 6AR, UK. *Corresponding author. E-mail: richard.aspinall@hutton.


dom will largely benefit from warmer temperatures.” The United Kingdom’s first Climate Change Risk Assessment (1) also stated that warmer temperatures may present some opportunities to improve yields, with the caveat that reduced water availability may limit these benefits. However, farming is vulnerable to extreme weather events, as we saw last year (2). Recent work by the Government’s Food Research Partnership suggests that the United Kingdom is “potentially at considerable risk from increasing weather extremes, locally for UK production, and globally for UK food prices” (3). Suggesting that farmers should get paid far more for services they provide to the nation’s ecosystems than the compensation they get for producing food is not only worrying but also misleading. The National Farmers’ Union believes that successful policy-making has its roots in robust scientific evidence, where the assumptions made and uncertainty and limitations associated with the analysis are clear. This is especially critical in the face of a challenge as formidable as climate change, which is likely to present society within the United Kingdom’s borders and across the world with some very difficult decisions. ANDREA GRAHAM,* HELEN FERRIER, DIANE MITCHELL, CERIS JONES, PHILIP BICKNELL Policy Services, Agriculture House, National Farmers’ Union, Stoneleigh, Warwickshire, CV82TZ, UK. *Corresponding author. E-mail: [email protected]

References 1. UK Climate Change Risk Assessment: Government Report (The Stationery Office, London, 2012). 2. National Farmers’ Union, “NFU outlook for 2013” (www. 3. T. Benton et al., “Severe weather and UK food chain resilience: Detailed Appendix to Synthesis Report” (2012);

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Ecosystem Services: Nature’s Balance Sheet IN THE RESEARCH ARTICLE “BRINGING ECOsystem services into economic decisionmaking: Land use in the United Kingdom” (5 July, p. 45), I. J. Bateman et al. summarize current efforts to assign economic value to ecosystem services. We add three factors that should be taken into account, based on life cycles and contribution of agricultural land use and associated habitats providing food. First, both income and expenditures should be included in valuation of ecosystem services. Expenditures are a major consideration in land-management decisions alongside income and value of products; recovery of food from ecosystems requires financial and other capital inputs. Second, using farm gate prices (i.e., the prices when leaving the farm, which are often lower than retail prices paid by consumers) to estimate the contributions of food from agriculture underestimates the product’s value. In 2010, the base year for Bateman et al.’s analysis, total UK farm gate income was £4.34 billion, whereas the UK food and drink sector—including manufacture, wholesale, and retail—was valued at £86.2 billion (1). In current ecosystem assessment and economic valuation methodologies, the downstream economic and societal benefits value is not attributed to food production in ecosystem services. Third, agricultural land management influences ecosystem services beyond food provision. As Bateman points out, in Great Britain, agriculture directly influences about 75% of the land surface through management schemes and crop and livestock production activities. Many other ecosystem services recognized by the Millennium Ecosystem Assessment and UK National Ecosystem Assessment are thus directly and indirectly affected by agricultural land management. Economic valuation and accounting requires increased recognition of, and sensitivity to, interrelationships between services and the contributions made by land management to their availability. RICHARD ASPINALL1,2* AND PETER GREGORY3,4 1

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1. Department for Environment, Food and Rural “Affairs, Agriculture in the United Kingdom 2011” (2012); www.

Response C. OBST ET AL. PROVIDE A WELCOME OPPORtunity to clarify the difference between environmental-economic cost-benefit analyses (such as ours) and environmental accounting exercises [such as the UN-SEEA (1, 2) initiative]. Accounting studies attempt to assess the total value of goods related to ecosystem services in a manner comparable to that used for market-priced goods in national accounts. A decline in the ecosystem services account over time signals a potential need to invest in underlying natural capital. However, such accounts do not indicate the most cost-effective form of that investment. Environmental economic analyses such as ours typically consider changes in value from the status quo that alternative investments provide, and identify those that yield higher value for money. The two approaches are complements rather than substitutes and serve differing but highly compatible elements of the decision-making process. A. Graham et al. criticize our use of “the value of nonmarket goods such as biodiversity.” Although we valued nonmarket greenhouse gas emissions and recreation, we explicitly did not attempt to define biodiversity in terms of economic values; instead, we applied a quantitative constraint prohibiting the degradation of biodiversity within our scenario analyses and examined the costs this would entail, finding them to be minor relative to other values. Graham et al.’s critique that we should not compare nonmarket values for ecosystem services with the market price of agricultural output ignores the fact that, as stated, we are conducting an economic analysis of marginal changes from the status quo and not attempting to assess the total value of food. In such assessments of changes, the use of market prices is standard (3). Indeed, there is an argument (3) that such analyses should subtract subsidies (including income support), which would reduce agricultural values (4). Graham et al. also question the possible increase in yields attributable to climate change. We do believe

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LETTERS that UK farming will generally benefit from warmer temperatures but caution that [as detailed in (5)] within areas of lower rainfall, increased drought could potentially reduce or even reverse these gains. We agree with R. Aspinall and P. Gregory that it would be better to consider net profits rather than farm gate prices, although again this would have reduced estimates of agricultural values. The need to link land use to its ecosystem service impacts favored our use of Agricultural Census (6) data, which omits profits. We are currently addressing this through a link to the Farm Business Survey (7) database. However, we disagree with the authors’ contention that we should have included the added-value of post-farm food processing. Aside from the fact that the UK food processing industry is a major importer of non-UK produce, such an approach would be analogous to valuing timber at the price of fine furniture. It is the raw material value that is relevant here. Similarly, our analysis explicitly links agricultural land use to its impacts on the ecosystem service considered. IAN J. BATEMAN,1* AMII R. HARWOOD,1 GEORGINA M. MACE,2 ROBERT T. WATSON,3



Centre for Social and Economic Research on the Global Environment, School of Environmental Sciences, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK. 2 Department of Genetics, Ecology and Environment, University College London, London, WC1E 6BT, UK. 3Department for Environment, Food and Rural Affairs (Defra), London, UK. 4 FuturES Research Center, Leuphana Universität, D-21335, Lüneburg, Germany. 5School of Earth and Environment, University of Leeds, LS2 9JT, UK. 6The Food and Environment Research Agency, Sand Hutton, York, YO41 1LZ, UK. 7Centre for Environment, Fisheries and Aquaculture Science (Cefas), Lowestoft, NR33 0HT, UK. 8UNE Business School, University of New England, Armidale, NSW 2350, Australia. 9Centre for Environmental Management, School of Geography, University of Nottingham, Nottingham, NG7 2RD, UK. 10British Trust for Ornithology, Thetford, IP24 2PU, UK. 11Department of Land Economy, University of Cambridge, Cambridge, CB2 1TN, UK. 12Basque Centre for Climate Change (BC3) and IKERBASQUE, Basque Foundation for Science, 48011, Bilbao, Spain. 13School of Geosciences, University of Edinburgh, Edinburgh, EH9 3JW, UK. 14School of Business, Economics and Social Sciences, University of Hamburg, 20354,

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Hamburg, Germany. 15Department of Spatial Economics and IVM, VU University, 1081 HV, Amsterdam, Netherlands. 16 Department of Economics, Tilburg University, 5000 LE, Tilburg, Netherlands. 17Department of Environmental Science, Aarhus University, DK-4000, Roskilde, Denmark. *Corresponding author. E-mail: [email protected]

References 1. United Nations, European Commission, Food and Agriculture Organization of the United Nations, International Monetary Fund, Organisation for Economic Co-operation and Development, World Bank, “System of EnvironmentalEconomic Accounting 2012: Central Framework, prepublication (white cover)” (2012); unsd/envaccounting/White_cover.pdf. 2. United Nations, European Commission, Organisation for Economic Co-operation and Development, World Bank, “System of Environmental-Economic Accounting 2012: Experimental Ecosystem Accounting, pre-publication (white cover)” (2013); envaccounting/eea_white_cover.pdf. 3. H. M. Treasury, The Green Book: Appraisal and Evaluation in Central Government (The Stationery Office, London, 2003). 4. I. J. Bateman, A. A. Lovett, J. S. Brainard, Applied Environmental Economics: A GIS Approach to Cost-Benefit Analysis (Cambridge Univ. Press, Cambridge, 2003). 5. C. Fezzi et al., Env. Res. Econ., 10.1007/s10640-0139663-x (2013). 6. Department for Environment, Food and Rural Affairs, June Agricultural Census (Edina, Manchester, UK, 2010). 7. Rural Business Research, “Farm Business Survey” (2013);

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Ecosystem services: nature's balance sheet.

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