Valuing environmental functions in developing countries

The interface between ecology and economics is the valuation of environmental goods, services and attributes. The total economic value of an ecosystem is derived by estimating monetary values for it's direct use, indirect use, option and non-use values. Recent advances have been made in the economic valuation of direct, option and non-use values. Much less attention has been paid to measuring the indirect use value provided by environmental functions. These values may be particularly significant in developing countries. This paper details the challenge presented by valuing environmental functions to ecologists and economists and synthesizes the methodological advances that have occurred. Using tropical forests, wetlands and biodiversity as illustrations, the application of this methodology to valuing the functions of complex natural systems is investigated and existing studies reviewed. Conclusions on further research are presented.