Are diverse ecosystems more valuable? Economic value of biodiversity as result of uncertainty and spatial interactions in ecosystem service provision

- Economic value of biodiversity results from uncertainty and spatial interactions.
- Insurance, option and spill-over value are attributable to biodiversity.
- Biodiversity poses specific methodological challenges for economic valuation.
- The methodological challenges help identify suitable valuation methods.

Economic valuation mostly focuses on specific ecosystems, species or the services they provide. The diversity within ecosystems is viewed as a valuation object less frequently. In this paper, it is argued that the economic value of biodiversity highlights the relevance of the temporal and spatial dimensions in ecosystem service provision. A framework is presented in which the economic value of biodiversity is the result of uncertainty about the future, regarding both supply of and demand for ecosystem services, and of spatial interactions between ecosystems. Three sources of biodiversity's economic value are distinguished in this context: insurance value, option value and spill-over value. Furthermore, the paper introduces biodiversity-specific methodological challenges (importance of non-market ecosystem goods; uncertainty and subjectivity; complexity and abstractness) which can be used to identify suitable methods for the economic valuation of biodiversity.