negatively impact water (i.e., water pollution), health (i.e., increased health risks from hormones, agrochemicals, antibiotics), climate change (i.e., from greenhouse gas [GHG] emissions), habitat of desirable species (i.e., habitat loss), and aesthetics. Plus, food production itself can be negatively impacted by pests, disease, and other detrimental factors that reduce productivity or increase production costs (also referred to as ecosystem disservices). Swinton discussed methods for valuing ecosystem services and disservices associated with food production systems; and the challenges of nonmarket valuation (i.e., intrinsic value; see Box 4-1).

Nonmarket Valuation of Ecosystem Services and Disservices

Another way to think about a food production system, or an agricultural ecosystem more broadly, is as a transformation process, with both synthetic and ecosystem inputs feeding into the process and food and ecosystem outputs coming out the other end. External costs can accrue on either the input or output side. For example, costs occur on the input side when natural capital is depleted (i.e., the natural capital that is necessary for enabling the provisioning ecosystem services provided by animal production), such as overgrazing of rangeland. Costs occur on the output side when natural capital is contaminated, such as water pollution from animal feeding operations. Because markets are often absent from this transformation process, valuing these costs is challenging.

Attaching dollar values to ecosystem services linked to food production involves, first, measuring changes in quantity (i.e., measuring the baseline production process and then measuring changes associated with each alternative feasible process), and second, associating values with those changes. Estimating those values involves examining both the supply and demand sides. On the demand side, what would people who do not have something be willing to pay in order to get more of it? That is, what is the willingness to pay (WTP) for a change in ecosystem service? On the supply side, what

BOX 4-1
Economic Versus Intrinsic Value

Swinton emphasized that economic values resulting from the relation between supply and demand are not the same as intrinsic values. In his book Nature and the Marketplace, Geoffrey Heal (2000) uses water and diamonds to explain the difference. Water, which is essential to human life, has low economic value but high intrinsic value. On the other hand, diamonds, which are not essential to human life, have low intrinsic value but high economic value.



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