Estimating nonmarket values
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Forested ecosystem functions and processes provide a variety of ecosystem goods and services through passive and active management.1 For example, tree biomass, an ecosystem good used to produce timber – a direct benefit – is derived from tree productivity, an ecosystem process. Carbon sequestration is also an ecosystem service derived from tree productivity (e.g. Hines et al. 2010). Fish populations, surroundings, and water body are ecosystem goods and services, used by anglers directly to produce recreational benefits, are the result of ecosystem processes. Air quality is an ecosystem service that contributes to human health – a direct benefit – that results from atmospheric deposition, an ecosystem process. Water quality is an ecosystem good – a direct benefit – that results from nutrient and hydrologic cycling, an ecosystem process. Many of these ecosystem goods and services are traded in formal markets (e.g. stumpage) and emerging markets (e.g. carbon sequestration). Many, however, are not traded in formal markets. Consequently, with these ecosystem goods and services there is no observable market equilibrium to determine the optimal level to produce (Chapter 7). There is no demand curve to help distribute them among various potential users (Chapter 6). Finally, there is no pricing mechanism (a measure of relative scarcity) to help allocate the resources used in their production (Chapter 7).