Ecosystem goods and services in the Netherlands, 2020

Natural Capital and ecosystem services

Many of the goods and services provided to society by nature and the landscape go largely unnoticed. Examples include coastal protection by the dunes, pollination of food crops by insects and the provision of clean drinking water by soil ecosystems. Here we use the collective term 'ecosystem services' to mean the capacity of ecosystems to provide goods and services. This capacity of ecosystems is usually divided into (1) the provision of goods, such as food and wood, (2) the regulation of processes, such as the purification of water, and (3) the supply of cultural services, such as natural areas where people can relax, walk or cycle.

Ecosystem services contribute to social and economic welfare

The goods and services supplied by ecosystems are vital components of social and economic welfare. Clean air, for example, is important in the prevention of respiratory diseases and a green environment encourages people to exercise and is therefore a benefit to health. Besides having beneficial health effects, the conservation and restoration of natural capital is also of economic importance. It generates economic returns, such as the sale of wood and fish, and creates added value for tourism and the housing market, as well as reducing healthcare costs. Greater use of nature-based solutions also ensures a more sustainable use of the natural world.

The volumes of ecosystem services do not meet demand and the discrepancy is widening

Trends in the supply of goods and services from ecosystems in the Netherlands over the past 20 years or so differ according to the type of ecosystem service (figure 1). None of the goods and services provided meets the total demand. By demand for ecosystem services we mean potential demand. An example is the demand for the ecosystem service natural pollination of agricultural crops, which consists of all crops that depend on pollination (e.g. apple trees). Some ecosystem services meet just a fraction of the demand, such as biomass for energy and air quality regulation. Dutch ecosystems meet more than half of the demand for non-drinking water (e.g. for household uses such as washing, agricultural uses such as irrigation, and industrial uses), soil fertility, pollination, outdoor recreation and natural heritage. Since 2000 the net trend in most ecosystem services (10 of the 17) has been negative: demand is rising faster than supply. For one ecosystem service - natural heritage - the discrepancy between supply and demand has remained about the same; for six services (wood, biomass for energy, water purification, air quality regulation, carbon sequestration, symbolic value of nature) the discrepancy is narrowing.

Demand for eight ecosystem services has increased. Climate change is one of the main causes of the growing demand for the ecosystem services non-drinking water, water storage, coastal protection, climate control in cities and erosion prevention; the demand for erosion prevention has increased as a result of agricultural intensification; and the demand for outdoor recreation has increased mainly because the urban population has grown and people have more free time as the population ages. The demand for wood, pest control, water purification, air quality regulation and carbon sequestration has declined. For the last three the decline in demand was due to lower emissions of pollutants and CO₂.

Besides these trends in demand, the supply side is also changing. There have been increases in the supply of provisioning services, particularly food, energy from biomass and wood. The ecosystem services of water storage, climate control in cities, air quality regulation and possibilities for outdoor recreation have increased because there has been a small increase in green space in urban areas. The provision of non-drinking water and the regulating services of soil fertility, pollination, and pest control have declined. These declines are mainly caused by agricultural intensification.

Delivery of services also possible via imports or technology

Where demand is not being met in full (figure 2) there are three possible scenarios. First, a number of ecosystem services can be imported to meet the unfulfilled demand. This is the case for wood, for example. However, these imports increase the ecological footprint in the exporting countries. It is generally not possible to import regulating and cultural services, because they have to be provided at the places where there is a demand for them. Second, technological alternatives can be used. For example, if there is a shortage of soil fertility, the application of chemical fertiliser and irrigation can bring crop yields up to the required levels and pesticides can be used where there is insufficient natural pest control. The disadvantage of this is that the use of technological alternatives leads to greater pressure on nature and the environment and can therefore endanger the provision of other ecosystem services. Third, where imports and technology cannot provide adequate alternatives, some of the demand for the ecosystem services in question may remain unsatisfied. This is especially the case for water purification, which means that most of the water bodies in the Netherlands do not meet water quality standards, and the failure to meet the required level of carbon sequestration is why the CO₂ concentration in the atmosphere is rising, with climate change as a consequence. For the natural heritage, it means that some species are threatened with extinction.

Natural areas make a major contribution to the supply of ecosystem services

Natural areas, agricultural land and urban areas all contribute to ecosystem services in their own way and to different degrees. Natural areas deliver the broadest range of ecosystem services. Relatively speaking, they also provide the largest proportions of many ecosystem services (see figure 3), despite the fact that the area of natural and semi-natural habitat is considerably smaller than agricultural and urban areas. The degree to which goods and services are supplied or can be combined in one place depends on the use of the land and how it is managed.

Policy on the conservation of natural capital and ecosystem services

There is a growing realisation that nature is the foundation of our economy and of our very survival (LNV, IPO 2020). At the global, European, national and provincial scales, therefore, goals have been formulated for the conservation, restoration and sustainable use of natural capital. The national, provincial and local governments in the Netherlands have set the goal of ensuring a strong and resilient nature that contributes to wellbeing - to social and economic welfare in the broadest sense (EZ 2013, LNV 2020). Besides establishing robust natural areas of good ecological quality, this also entails the sustainable use of natural resources, our natural capital (EZ 2014, EC 2020). Users of natural resources must no longer pass on the environmental costs to nature but themselves make a contribution to nature and biodiversity (MinBiZa 2020). This summary review of ecosystem services shows that nature in the Netherlands is not being used in a sustainable way: there is a discrepancy between the supply of ecosystem services and the demand for them, and for many ecosystem services (10 of the 17) this discrepancy is widening. The use of imports and technology to meet demand has many negative impacts on ecosystems outside and inside the Netherlands.

Many of the effects of natural capital on social and economic welfare are currently not included in policy considerations and decision-making. The ambition is to apply the attention and care for biodiversity and natural capital into the dicision making process of businesses and other parties through the develpment and application of methods and data by which stakeholders can weigh in their impact and dependence of natural capital (LNV 2019). As the World Bank has indicated, a new measure of economic output is needed: a measure that encompasses wellbeing in its entirety, including the value of our natural capital. The indicator presented here is a first step towards the development of such a measure.