Defining and classifying ecosystem services for economic valuation: the case of forest water services

The Millennium Ecosystem Assessment (MA) has become widely accepted as a framework for understanding and assessing the benefits that ecosystems provide to human well-being. Its classification of services into the categories of provisioning, regulating, supporting and cultural, has been increasingly widely adopted. However, several authors have recently argued that the MA's definition and classification of services may not be the most appropriate for monetary assessments. This paper seeks to understand in greater depth the sources of problems arising from the use of the MA's definition and classification of services for economic valuation. Firstly, we review and disentangle the critical literature to date. Secondly, we undertake a practical examination of existing primary valuation studies, which we analyse according to the MA classification and then compare with an output based-classification. We use water ecosystem services provided by tropical forests as an example for our analysis. Our results provide further evidence of the risk of double counting and the problems related to the secondary use of valuation estimates, as a consequence of service overlapping and service ambiguity. (C) 2012 Elsevier Ltd. All rights reserved.