that need to be addressed in order to adequately characterize those impacts (see Figure 2.1). These questions—What are the impacts of human actions on environmental conditions that affect the structure or function of ecosystems? How do changes in the structure and function of ecosystems lead to changes in the provision of ecosystem services? How do changes in the provision of ecosystem services affect human well-being, and how can the value of the changes in services in terms of human well-being be quantified?—and the logic behind them set the stage for what is likely to have been done early in the Natural Resource Damage Assessment (NRDA) process, whether for the DWH spill or other incidents. Extending this process to consider how these impacts affect the provision of ecosystem services and ultimately how this leads to changes in human well-being is discussed in the following sections of this chapter.


Production functions are a standard tool used by economists to describe how inputs can be transformed into outputs. A production function gives the feasible output of goods and services that can be produced from a given set of inputs. For example, what is the maximum amount of steel (output) that can be produced from a given amount of iron ore, energy, machinery, and labor (inputs)? The notion of production functions applied to ecological systems has a long history in agricultural economics (e.g., crop yield functions) and resource economics (e.g., bioeconomic modeling of fisheries and forestry). Production functions have also been applied recently to the provision of ecosystem services (e.g., NRC, 2005a; Barbier, 2007; Daily et al., 2009; Tallis and Polasky, 2009). An ecological production function specifies the output of ecosystem services generated by an ecosystem given its current condition. Changes in ecosystem conditions, either from natural disturbances such as hurricanes, or from human disturbances such as an oil spill, will in general alter the amount of various ecosystem services provided. For example, degradation of coastal marshes may reduce protection from storm surges and reduce nursery habitat for fish, among other services.

For some ecosystem services, ecological production functions are fairly well understood and data exist that can be used to quantify the amount of a service provided. A good example of a fairly well understood and well studied ecosystem service is carbon sequestration in above-ground biomass for terrestrial ecosystems, particularly for forests. The U.S. Forest Service collects data on biomass in forests by stand age and tree species for different areas

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