Land-use change impacts on ecosystem services value: Incorporating the scarcity effects of supply and demand dynamics

We present a new model for quantifying the effects of changes in supply and demand on the scarcity value of ecosystem services under land-use change. We demonstrate its application by assessing the impact of rapid urbanization in the Guangzhou-Foshan Metropolitan Area (GFMA) in southern China from 1990 to 2010. Supply and demand curves were developed for both private-good and public-good ecosystem services based on published price elasticities. Change in ecosystem services supply was calculated using a well-established unit-value transfer method and change in demand was calculated as a function of population, wealth, and income elasticity. Naïve assessment (i.e. ignoring supply and demand effects on scarcity value) found a small (−4.4%) decrease in the value of physical supply of ecosystem services from US$4.631 billion in 1990 to US$4.430 billion in 2010. When the effects of changes in supply and demand were considered, the scarcity value of ecosystem services increased dramatically to US$33.774 billion (+629%) in 2010 driven by a strong increase in demand especially for public-good type services with poor substitutes, combined with a slightly reduced supply. A renewed focus on land-use planning is urgently required to ensure the sustainability of increasingly valuable ecosystem services for the wellbeing of burgeoning urban populations.