Value of Ecosystem Service and Water

I have some thoughts about the second question we took in a poll during class, which is about whether the government should make decisions based on cost-benefit analysis including ecosystem services. I believe that ecosystem valuation can be complex and controversial because some people would say selling natural resources with a price tag is an inappropriate action. But creating markets for ecosystem services to make trade-offs in allocating resources, and using policy interventions and environmental variability to link to ecosystem services can provide sustainability of ecosystem services, and can make ecosystems more valuable to society. In today's class, I recognized the importance of water supply to ecological sustainability and that more industries and agriculture will increasingly compete for water resources today. In some areas, the lack of adequate quality and quantity of drinking water remains a serious health concern. So I believe that pricing water appropriately will encourage people to reduce waste and invest more in water infrastructure, especially for properly mitigating the costs of resource use for low-income people and encouraging governments to invest more in water and sanitation infrastructure.

I am envisioning a world where governments can support increased trade to more effectively manage the capacity of the environment and the rate of output of ecosystem services. But markets for ecosystem services are complex and subject to many uncertainties, not least because trade can have both positive and negative impacts on the environment, and because many of the services provided by ecosystems are public goods, property rights associated with ecosystems and their services are often not clearly defined. Suppose the property rights of natural resources are not clearly defined. In that case, they may be overused as public services or the effects of uncompensated side effects of human actions (e.g. anthropogenic pollution of water resources or illegal fishing, illegal exploitation of forests).

I support government enactment of bills to value ecosystems that can help resource managers deal with the effects of market failures. In the case of the Panama Canal, for example, a better solution could be to legalize private farmland uses around the Panama Canal to increase dry season water flows and reduce sedimentation. Policymakers can also best combine trade and environmental policies to create markets for environmental products and even develop sustainable import and export trade.