Connecting people to nature: Importance of knowing Ecosystem Goods and Services (EGSs) 

Connecting people to nature: Importance of knowing Ecosystem Goods and Services (EGSs)

logoMonday, 5 June 2017


World Environment Day provides a perfect platform to reflect on our environment and initiate actions that would drive sustainable solutions for major environmental issues of the world. This year the theme is ‘Connecting People to Nature’. As suggested by many environmental experts scientific advances as well as growing environmental problems such as global warming are helping us to understand the countless ways in which natural systems support our own prosperity and well being.

Therefore it makes sense to go back and get connected with the nature so it helps to better understand problems such as climate change and come up with sustainable solutions. However, in order this to happen it is important that we understand the incentives that people have in order to get connected with the environment. Since we are looking for sustainable solutions connection with the nature can’t be a one-time thing just for the World Environment Day, rather it has to be a continuous activity.

Therefore the central thesis of the article is to explore different incentives that people have in order to get connected with the environment. The main hypothesis is that the ‘incentives to get connected with the nature would work better if they are based on the concept of Ecosystem Goods and Services (EGSs)’.

Ecosystem Goods and Services (EGS) are products of healthy, functioning ecosystems. These goods and services may be valued in markets or may be considered outside of existing markets, but their management constitutes an important investment in environmental and social sustainability for current and future generations (Roy et al, 2011). EGSs provide many incentives for people to get connected with the nature. However these can be categories in to several main categories: (1) Ecological incentives (2) Social and Food safety incentives and (3) Financial incentives (including budgetary incentives for the government). All these incentives would push people (and hopefully the governments when it comes to budgetary incentives) to be more involved with the nature and reap the benefits of EGSs.


Ecological incentives

Ecosystems in nature are capable of providing many ecological incentives: (1) clean water (2) clean air (3) ecological balance/species diversity (4) soil fertility (5) scenic beauty and (6) disaster management. Healthy ecosystems such as lakes, river-associated and forest ecosystems are source of clean water. These ecosystems not only provide clean surface water but they are also capable of replenishing the ground water as well. Sri Lanka is famous for many lakes and river associated ecosystems.

0399Though we are now polluting many of these ecosystems, they were at one point providing clean water for all of us. Currently it is not possible for us to use this water directly for consumption. Some of these clean water sources are not even good for bathing purposes. It’s being more than 20 years since my first visit to ‘Singharaja forest’. Those days we did not take water bottles rather we enjoyed drinking clean water from flowing streams inside the forest. Today one might think twice before drinking water from these sources. While we have already lost some of the best ecosystems that gave us clean water there are few left. This World Environment Day 2017 will be a perfect place to act on preserving the ‘incentives of clean water’ from these natural ecosystems.

Most of the land-based ecosystems in the world are associated with greenery (except for the desert ecosystems and few others). Almost all the land-based ecosystems in Sri Lanka are associated with greenery. Green ecosystems are associated with production of clean air, which is a basic function of plants. In this regard forests stands above any other ecosystem. Sri Lanka has a rich forest cover. Though we had a forest cover of more than 40%, this has now significantly reduced.

By 2015 the forest cover of Sri Lanka was reduced below 28%. Country is in a continuous dilemma in balancing off the development and preservation of the natural forest cover. We only have limited land, our population is increasing, more timber is demanded for housing and other purposes and deforestation (mainly illegal) is still an issue, therefore the probability of current forest cover decreasing even lower is high.

Loggers have enough private incentives to keep on logging since there is an increasing demand for timber. Therefore if the forests cover to be protected from illegal logging the rules on such activities have to be strong and properly implemented. I do not see a lack of laws rather there is lack of enforcements. High demand has created enough incentives to enforcing authorities to keep allowing illegal logging. Therefore enforcing laws might not be enough to protect forest ecosystems.

We need to look at other areas where incentives are created to protect forest ecosystems in terms of clean air. More clean air means less polluted air and preferably less CO2 (Carbon dioxide). Sri Lanka is committed to Intergovernmental Panel on Climate Change (IPCC), therefore as a country we have enough incentives to reduce the CO2 emissions.

Many developed countries (who are committed to IPCC) are already investing in reforestation and decrease in logging in developing countries to compensate their CO2 emissions (this is part of the climate financing process/REDD+). Sri Lanka would be a suitable source for such activity. Therefore there are enough incentives for the Government to promote reforestation and stop illegal logging as a way of climate change mitigation. Sri Lanka has not yet come to a situation like China or Singapore where ordinary people has to wear breathing masks when they go out.

However, usually people would have enough incentive to prevent such a situation from being a reality. Therefore we should take steps to plant trees as much as possible while convincing authorities to tight enforcements around illegal logging. This way it will be possible to reap continuous ‘incentives of clean air’ from natural ecosystems.

Ecological balance/species diversity is very important to the natural low and order of the ecosystem. It will define the strength of the ecosystem in terms of its value and sustainability. An ecosystem with higher species diversity would yield a higher economic value in terms environmental valuation. A country with ecosystems with higher species diversity would result in a higher natural stock in terms of environmental accounts. Further it will enhance the sustainability of food chains. Ecological diversity has the ability to enhance the soil fertility as well. Soil fertility has a direct link to the macro and micro, fauna and flora composition of the ecosystem. This is more relevant for ecosystems that are associated with agriculture and farming. Therefore taken the species diversity and the soil fertility together we could say farmers have the most incentives of ‘species diversity and soil fertility’.

Species diversity and soil fertility was one of the main features of the ancient agricultural systems. However with the introduction of chemicals in to agriculture species diversity decreased rapidly and soil fertility deteriorated. Though chemicals were a significant attribute in increasing the agriculture production in early days (when the green revolution started) it was not a sustainable solution. Most agricultural fields have become unproductive and not responsive to fertiliser (chemical or organic).

The Government is in full force promoting organic agriculture among farmers. Therefore it might be the case that the Government has realised the incentives from organic agriculture. This is also a golden opportunity to convince farmers to adopt organic agriculture in the name of EGSs. A farmer would evaluate many things before shifting his cultivation, which we mainly identify as opportunity cost of cultivation. But these opportunity costs are direct and one could put a value on it.

By shifting to organic agriculture a farmer would attract EGSs that are normally would not be valued by direct valuation methods and species diversity and soil fertility are such those EGSs. Yet, these EGSs, if valued would cover majority of the direct opportunity cost. For example organic fertiliser and labour are two main opportunity cost components in shifting to organic farming.

Species diversity and soil fertility would greatly reduce the need of organic fertiliser and land preparation. Therefore promotion/adoption of organic farming systems is a perfect platform for farmers to harness the ‘incentives of species diversity and soil fertility’.

Environmental economists are famous for putting values for scenic beauty of natural ecosystems (they usually use methods such as travel cost and willingness to pay). From these studies it is clear that one of the most important features of a natural ecosystem that people would value is its scenic beauty. Therefore scenic beauty is a major EGS that people could receive from a natural ecosystem (I am using the word ‘natural ecosystem’ to illustrate the default case, but there are man-made ecosystems that would generate scenic beauty for people).

Scenic beauty of an ecosystem is a perfect platform to generate income in terms of tourism. At the same time it could be the first thing that would make the business go away. Ecosystems do lose their scenic beauty to natural activities such as floods, droughts and fires; however most of the time the causes are man-made. Beaches are one of the natural ecosystems that Sri Lanka is blessed with and which generates plenty of income in terms of tourism.

However over the last decade most of these beautiful beaches lost their attractive features due to human activities. We have only handful of places that would generate enough scenic beauty (EGS) that would attract people. Most of these places were founded by people and were populated by them as well. Most of these beaches are public goods. There is no charge to visit these beaches and enjoy the scenic beauty (unless the beach is part of a privately managed hotel, then you would need to spend on the hotel in order to access the beach).

At the same time public beaches provide the highest incentives for people to pollute as well as conserve. Scenic beauty (EGS) provides enough incentives for people to get connected with the nature and enjoy life. However being a public good people will bring food and other materials and would leave waste that would damage scenic beauty (the initial damage is on the scenic beauty however it will expand to deterioration and erosion).

Therefore property right structure might create incentives to pollute a natural ecosystem. This is common for most other ecosystems that generate scenic beauty, especially if they were unrestricted to general public. Therefore in order to reap the ‘incentives of scenic beauty’ property rights might have to be restructured. For example littering and waste management in public beaches had to be taken seriously. It might be hard (or even not possible) to change attributes such as ‘property rights structure’ of a natural ecosystem, however it is possible to change how people would utilise EGSs of such an ecosystem.

After The Tsunami of 2004, many reports came out highlighting that ‘beach and brackish water ecosystems with dense ecological diversity had the least damage’. In fact most of those ecosystems prevented the strong tides from bashing in to the land areas and probably have prevented many deaths and property damage. Therefore in my argument I stand strong that ‘disaster management is one of the significant EGSs generated by ecosystems, especially beach and brackish water ecosystems’.

For a person who is living in the hill country this EGS might have a little significance. But for people who live close by to beach and encountered the horror of the Tsunami 2004 would have a different opinion. This is justified by the large number of beach and brackish water ecosystem rehabilitation projects implemented after the Tsunami of 2004 (Rodrigo and Deaton, 2016).


Social and food safety incentives

In order to address the question on ‘what are social incentives of EGSs’ one should try to answer the broader question, ‘why people should go out to nature?’. There can be many answers: (1) It makes me happy and is relaxing (2) It is our responsibility to protect the nature (3) It’s World Environment Day so we should do this… and the list could go on. However, in terms of EGSs, the ecosystems provide an ‘interactive platform’ to the society. Therefore ‘social incentives of EGSs are about receiving as well as giving’. Primarily EGSs of an ecosystem provides an opportunity for the society to interact with key components of nature, reflect on what has happened and realise what should be done to make things better. This sounds broader but I argue that social incentive of EGSs is one of the things that would be harder to put a monetary value using modern day environmental valuation tools.

However the incentives of food safety are much straightforward. Food safety has never attracted this much of an attention in the recent years. With the increase attention on over-use of chemicals on agricultural products more people are looking to consume toxic free produce. EGS in terms of food safety is related to farming ecosystems, and as discussed earlier the best places to generate those are organic farming ecosystems. Food safety is something beneficial for consumers as well as producers.

By eating toxin free produce people can eliminate the chance of serious illnesses and forego any expenditure on medical care. Consumers’ willingness to buy organic produce would depend on cost of overcoming an ill state. This would be hard to estimate unless the person has actually experienced an illness because of such consumption. Therefore an indirect way of getting this information is to ask, ‘How much he would be willing to pay to forego any illnesses that could be created by consuming toxin produce’.

Consumer will buy organic produce as long as the willingness to pay to forgo illnesses is higher than the market price of the organic produce. But this is a pure economic argument and would not adequately justify the consumers’ decision on whether to buy organic food or not. Since being organic is a quality parameter, a consumer would need enough market signals to make sure of the quality before making a decision to buy.

Therefore while there are clear evidences to show that organic farming ecosystems produce enough incentives of food safety a consumer might still not make a purchase since quality signals are distorted. However promoting organic food consumption is much easier among farmers since they have enough incentives to consume what they grow (so that they don’t have to spend money in the market place). However convincing them to adopt organic farming will not be easy unless they are compensated for shifting from inorganic farming to organic farming (Those are the opportunity cost components that I have discussed earlier in the article).


Financial incentives

Financial incentives of EGSs are applicable for general public and governments. People who associated with natural ecosystems have direct financial benefits. These ecosystems such as forests ecosystems provide employment opportunities for communities. Living harmony with your surrounding ecosystem has been the practice forever. However with population increase and technology development, many necessities came up and living off the natural ecosystem was not enough.

With time farming communities developed and people destroyed natural ecosystems so that they can cultivate and earn money from harvest. However we still can see this co-existing nature in some communities. Sri Lankan natives are still living in harmony with the society and most of the time extracting resources and gaining money through trade.

This does not have to be the way to live in the 21st century. Societies do not have to fully depend on the environmental resources to survive. However disconnect from the nature will have its consequences. Brackish water fisheries is a natural ecosystem that served food (mainly protein sources) to people for a long time. This allowed people to extract natural resources such as fish, crabs and mangroves.

However with increasing need for food these ecosystems were turned in to larger production entities such as shrimp farms. It’s not a wrong thing to do if it was done in harmony with the natural ecosystems. However commercial brackish water fisheries blocked many natural storm water drainage systems, decreased the species diversity in the ecosystem and increased the probability of disease spread with monoculture. Such a situation will lead to a financial loss rather than a gain.

I will use a specific example to illustrate how connecting with the nature can save money for the Government. My emphasis is on organic agriculture. Fertiliser subsidy (mainly for paddy) is a significant input subsidy in the agriculture sector. It has helped to increase the production since early 1960s. However many studies have shown (Rodrigo and Abeysekara, 2016) that fertiliser subsidy on paddy became insignificant over time, accounted for over-use of fertiliser, land degradation, toxin produce and heavy burden on the national budget.

Fertiliser was subsidised close to 90% (from the market price) and it was absorbing a heavy percentage from the national budget. Though this was a very clear situation, none of the previous governments had the ability to abolish the fertiliser subsidy since it was not an ‘economic problem’ anymore, rather it was a ‘political economic’ problem. However the current government made a decision to abolish the fertiliser subsidy and moved on to a coupon system.

The coupon system does not utilise government expenditure as much as the fertiliser subsidy. Yet I argue that the coupon system also has to be a temporary solution. There are plenty of examples from every region of the world on facing-out input subsidies. Sri Lanka has to learn from these examples. Input subsides have to be temporary boosters to production. Once targets are achieved input markets must decide on the price and the quantity (preferably through healthy competition).



Nature is essential for our survival. This isn’t something that has to be reminded on a special day and taught in schools. However insatiable needs have pushed us to extract everything from the nature and hardly give anything back. Because of that we have lost the natural balance in our ecosystems. Think of the incentives that you can get from engaging with ecosystems, and then understand what needs to be done to make those incentives continuous and sustainable.

(Dr. Chatura Rodrigo is an agriculture and environment economist. He can be reached at and +94 77 986 7007)

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