• Different ecosystem service definitions and interpretations create too much ambiguity. • The cascade model is used as framework, and Systems Ecology as theoretical basis. • The notions of biomass information and interaction enrich a refreshed conceptualization. • The cascade framework shifts from a ‘two dimensional’ to a ‘telescopic’ perspective. • This perspective can emphasize the ecological dimension and its complex reality.

In this paper we present a case study of integrated ecosystem and economic accounting based on the System of Environmental Economic Accounting — Experimental Ecosystem Accounts (SEEA-EEA). We develop accounts, in physical and monetary terms, for the water purification ecosystem service in Europe over a 20-year time period (1985–2005). The estimation of nitrogen retention is based on the GREEN biophysical model, within which we impose a sustainability threshold to obtain the physical indicators of capacity – the ability of an ecosystem to sustainably supply ecosystem services. Key messages of our paper pertain the notion of capacity, operationalized in accounting terms with reference to individual ecosystem services rather than to the ecosystem as a whole, and intended as the stock that provides the sustainable flow of the service. The study clarifies the difference between sustainable flow and actual flow of the service, which should be calculated jointly so as to enable an assessment of the sustainability of current use of ecosystem services. Finally, by distinguishing the notion of ‘process’ (referred to the ecosystem) from that of ‘capacity’ (pertaining specific services) and proposing a methodology to calculate capacity and flow, we suggest an implementable way to operationalize the SEEA-EEA accounts.

• The capacity account should link ecosystem condition with ecosystem services accounts. • Asset accounts for ecosystems differs from asset accounts for natural resources. • Capacity is calculated for individual ecosystem services and not for ecosystems. • Capacity represents a virtual stock providing annual flows of ecosystem services. • Capacity as “virtual stock” differs from ecosystem assets.