Landscapes generate a wide range of valuable ecosystem services, yet land use decisions often ignore the value of these services. Using the example of the UK, we show the significance of land use change not only for agricultural production but also for emissions and sequestration of greenhouse gases, open-access recreational visits, urban green space and wild species diversity. We use spatially explicit models in conjunction with valuation methods to estimate comparable economic values for these services, taking account of climate change impacts. We show that, while decisions which focus solely upon agriculture reduce overall ecosystem service values, highly significant value increases can be obtained from targeted planning incorporating all potential services and their values, and that this approach also conserves wild species diversity.One Sentence Summary: Valuation of ecosystem services within land-use planning creates significant gains relative to current, market-dominated, decision making. Main Text:The Millennium Ecosystem Assessment (1) provided important evidence of the ongoing global degradation of ecosystem services and highlighted the need to incorporate their value into the economic analyses which underpin real-world decision-making. Previous studies have shown that the overall values of unconverted natural habitats can exceed the private benefits following conversion (2, 3), that knowledge of landscape heterogeneity and ecological processes can support cost effective land planning (4-7), that trade-offs in land-use decisions affect values from ecosystem services and biodiversity at local level (8, 9), and that current land use is vulnerable to the impacts of global change (10, 11). In the UK National Ecosystem Assessment (NEA) (12), a comprehensive assessment of the UK's ecosystems was linked to a systematic, environmental and economic analysis of the benefits they generate. Here we show how taking account of multiple objectives in a changing environment (including, but not restricted to, climate change) fundamentally alters decisions regarding optimal land use. The NEA analyses are based upon highly detailed, spatially-referenced environmental data covering all of Great Britain. These data supported the design and parameterization of models of both the drivers and consequences of land use decisions, incorporating the complexity of the natural environment and its variation across space and time (13). Model outputs provide inputs to economic analyses which assess the value of both marketed and non-marketed goods (Table 1).The NEA specifically addressed the consequences of land use change driven by either just agricultural or a wider set of values, all within the context of ongoing climate change. To assess this, raw data on land use and its determinants were drawn from multiple sources to compile a 40 year dataset, spatially disaggregated at a resolution of 2km grid squares (400ha) or finer across all of Great Britain, forming more than ½ million sets of spatially referenced, time specific...

It has become essential in policy and decision-making circles to think about the economic benefits (in addition to moral and scientific motivations) humans derive from well-functioning ecosystems. The concept of ecosystem services has been developed to address this link between ecosystems and human welfare. Since policy decisions are often evaluated through cost-benefit assessments, an economic analysis can help make ecosystem service research operational. In this paper we provide some simple economic analyses to discuss key concepts involved in formalizing ecosystem service research. These include the distinction between services and benefits, understanding the importance of marginal ecosystem changes, formalizing the idea of a safe minimum standard for ecosystem service provision, and discussing how to capture the public benefits of ecosystem services. We discuss how the integration of economic concepts and ecosystem services can provide policy and decision makers with a fuller spectrum of information for making conservation-conversion trade-offs. We include the results from a survey of the literature and a questionnaire of researchers regarding how ecosystem service research can be integrated into the policy process. We feel this discussion of economic concepts will be a practical aid for ecosystem service research to become more immediately policy relevant.

English and Welsh farm-level survey data are employed to estimate stochastic frontier production functions for eight different farm types (cereal, dairy, sheep, beef, poultry, pigs, general cropping and mixed) for the period 1982 to 2002. Differences in the relative efficiency of farms are explored by the simultaneous estimation of a model of technical inefficiency effects. The analysis shows that, generally, farms of all types are relatively efficient with a large proportion of farms operating close to the production frontier. However, whilst the frontier farms of all types are becoming more efficient through time because of technical change, it is also the case that the efficiency of the average farm for most farm types is increasing at a slower rate. In addition, annual mean levels of efficiency for most farm types have declined between 1982 and 2002. The factors that consistently appear to have a statistically significant effect on differences in efficiency between farms are: farm or herd size, farm debt ratios, farmer age, levels of specialisation and ownership status. Copyright 2006 Blackwell Publishing Ltd.