VALUATION OF ECOLOGICAL RESOURCES AND FUNCTIONS

Ecological resources are natural resources that provide certain necess ary but overlooked system maintenance functions within ecosystems, Env ironmental economics is in search of an appropriate analysis framework to determine economic values of such resources. This paper presents a framework that estimates and compiles the components of value fora na tural ecosystem. The framework begins with the ecological processes in volved, which provide functions within the ecosystem and services valu ed by humans. We discuss the additive or competive nature of these val ues, and estimate these values through conventional and unconventional techniques. We apply the framework to ecological resources in a shrub -steppe dryland habitat being displaced by development. We first deter mine which functions and services are mutually exclusive (e.g., farmin g vs soil stabilization) and which are complementary or products of jo int production (e.g., soil stabilization and maintenance of species). We then apply benefit transfer principles with contingent valuation me thodology (CVM), travel cost methodology (TCM), and hedonic damage pri cing (HDP). Finally, we derive upper-limit values for more difficult-t o-value functions through the use of human analogs, which we argue are the most appropriate method of valuation under some circumstances. Th e highest values of natural shrub-steppe habitat appear to be derived from soil stabilization.