Using gross ecosystem product (GEP) to value nature in decision making

Zhiyun Ouyang; Changsu Song; Changsu Song; Hua Zheng; Hua Zheng; Stephen Polasky; Stephen Polasky; Yi Xiao; Yi Xiao; Ian J. Bateman; Jianguo Liu; Jianguo Liu; Mary Ruckelshaus; Faqi Shi; Yang Xiao; Weihua Xu; Weihua Xu; Ziying Zou; Ziying Zou; Gretchen C. Daily; Gretchen C. Daily

doi:10.1073/pnas.1911439117

Using gross ecosystem product (GEP) to value nature in decision making

Zhiyun Ouyang, Changsu Song, Changsu Song, Hua Zheng, Hua Zheng, Stephen Polasky, Stephen Polasky, Yi Xiao, Yi Xiao, Ian J. Bateman, Jianguo Liu, Jianguo Liu, Mary Ruckelshaus, Faqi Shi, Yang Xiao, Weihua Xu, Weihua Xu, Ziying Zou, Ziying Zou, Gretchen C. DailyGretchen C. Daily

Applied Economics

Research output: Contribution to journal › Article › peer-review

233 Scopus citations

Abstract

Gross domestic product (GDP) summarizes a vast amount of economic information in a single monetary metric that is widely used by decision makers around the world. However, GDP fails to capture fully the contributions of nature to economic activity and human well-being. To address this critical omission, we develop a measure of gross ecosystem product (GEP) that summarizes the value of ecosystem services in a single monetary metric. We illustrate the measurement of GEP through an application to the Chinese province of Qinghai, showing that the approach is tractable using available data. Known as the "water tower of Asia," Qinghai is the source of the Mekong, Yangtze, and Yellow Rivers, and indeed, we find that water-related ecosystemservices make up nearly two-thirds of the value of GEP for Qinghai. Importantly most of these benefits accrue downstream. In Qinghai, GEP was greater than GDP in 2000 and three-fourths as large as GDP in 2015 as its market economy grew. Large-scale investment in restoration resulted in improvements in the flows of ecosystem services measured in GEP (127.5%) over this period. Going forward, China is using GEP in decision making in multiple ways, as part of a transformation to inclusive, green growth. This includes investing in conservation of ecosystem assets to secure provision of ecosystem services through transregional compensation payments.

Original language	English (US)
Pages (from-to)	14593-14601
Number of pages	9
Journal	Proceedings of the National Academy of Sciences of the United States of America
Volume	117
Issue number	25
DOIs	https://doi.org/10.1073/pnas.1911439117
State	Published - Jun 23 2020

Bibliographical note

Funding Information:
ACKNOWLEDGMENTS. We thank Dr. Bo Li for helpful comments. We thank the Second Tibetan Plateau Scientific Expedition and Report (2019QZKK0300); National Key Research and Development Program of China (2016YFC503400); the Asian Development Bank (ADB TA 9040-PRC), the National Science Foundation (#1924111); the Natural Capital Project for support of the Natural Capital Data and Software Platform; the Turing Institute HSBC-ONS Economic Data Science Award Learning Tools for Land Use Analysis and Decision Support Utilising Earth Observation, Natural Capital and Economic Data; and the Fesler-Lampert Endowment for Ecological/Environmental Economics, University of Minnesota, for support.

Publisher Copyright:
© 2020 National Academy of Sciences. All rights reserved.

Keywords

Ecosystem services
Environmental-economic accounting
GDP
Gross ecosystem product
Natural capital

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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Ouyang, Z., Song, C., Song, C., Zheng, H., Zheng, H., Polasky, S., Polasky, S., Xiao, Y., Xiao, Y., Bateman, I. J., Liu, J., Liu, J., Ruckelshaus, M., Shi, F., Xiao, Y., Xu, W., Xu, W., Zou, Z., Zou, Z., ... Daily, G. C. (2020). Using gross ecosystem product (GEP) to value nature in decision making. Proceedings of the National Academy of Sciences of the United States of America, 117(25), 14593-14601. https://doi.org/10.1073/pnas.1911439117

Ouyang, Z, Song, C, Song, C, Zheng, H, Zheng, H, Polasky, S, Polasky, S, Xiao, Y, Xiao, Y, Bateman, IJ, Liu, J, Liu, J, Ruckelshaus, M, Shi, F, Xiao, Y, Xu, W, Xu, W, Zou, Z, Zou, Z, Daily, GC & Daily, GC 2020, 'Using gross ecosystem product (GEP) to value nature in decision making', Proceedings of the National Academy of Sciences of the United States of America, vol. 117, no. 25, pp. 14593-14601. https://doi.org/10.1073/pnas.1911439117

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abstract = "Gross domestic product (GDP) summarizes a vast amount of economic information in a single monetary metric that is widely used by decision makers around the world. However, GDP fails to capture fully the contributions of nature to economic activity and human well-being. To address this critical omission, we develop a measure of gross ecosystem product (GEP) that summarizes the value of ecosystem services in a single monetary metric. We illustrate the measurement of GEP through an application to the Chinese province of Qinghai, showing that the approach is tractable using available data. Known as the {"}water tower of Asia,{"} Qinghai is the source of the Mekong, Yangtze, and Yellow Rivers, and indeed, we find that water-related ecosystemservices make up nearly two-thirds of the value of GEP for Qinghai. Importantly most of these benefits accrue downstream. In Qinghai, GEP was greater than GDP in 2000 and three-fourths as large as GDP in 2015 as its market economy grew. Large-scale investment in restoration resulted in improvements in the flows of ecosystem services measured in GEP (127.5%) over this period. Going forward, China is using GEP in decision making in multiple ways, as part of a transformation to inclusive, green growth. This includes investing in conservation of ecosystem assets to secure provision of ecosystem services through transregional compensation payments.",

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note = "Funding Information: ACKNOWLEDGMENTS. We thank Dr. Bo Li for helpful comments. We thank the Second Tibetan Plateau Scientific Expedition and Report (2019QZKK0300); National Key Research and Development Program of China (2016YFC503400); the Asian Development Bank (ADB TA 9040-PRC), the National Science Foundation (#1924111); the Natural Capital Project for support of the Natural Capital Data and Software Platform; the Turing Institute HSBC-ONS Economic Data Science Award Learning Tools for Land Use Analysis and Decision Support Utilising Earth Observation, Natural Capital and Economic Data; and the Fesler-Lampert Endowment for Ecological/Environmental Economics, University of Minnesota, for support. Publisher Copyright: {\textcopyright} 2020 National Academy of Sciences. All rights reserved.",

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Using gross ecosystem product (GEP) to value nature in decision making

Abstract

Bibliographical note

Keywords

UN SDGs

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