Food security is high on the global policy agenda. Demand for food is increasing as populations grow and gain wealth to purchase more varied and resource-intensive diets. There is increased competition for land, water, energy, and other inputs into food production. Climate change poses challenges to agriculture, particularly in developing countries (1), and many current farming practices damage the environment and are a major source of greenhouse gases (GHG). In an increasingly globalized world, food insecurity in one region can have widespread political and economic ramifications (2).

Monitoring Land Use: Land-use decisions are based largely on agricultural market values. However, such decisions can lead to losses of ecosystem services, such as the provision of wildlife habitat or recreational space, the magnitude of which may overwhelm any market agricultural benefits. In a research project forming part of the UK National Ecosystem Assessment, Bateman et al. (p. 45 ) estimate the value of these net losses. Policies that recognize the diversity and complexity of the natural environment can target changes to different areas so as to radically improve land use in terms of agriculture and greenhouse gas emissions, recreation, and wild species habitat and diversity.

The central challenge of the 21st century is to develop economic, social, and governance systems capable of ending poverty and achieving sustainable levels of population and consumption while securing the life-support systems underpinning current and future human well-being. Essential to meeting this challenge is the incorporation of natural capital and the ecosystem services it provides into decision-making. We explore progress and crucial gaps at this frontier, reflecting upon the 10 y since the Millennium Ecosystem Assessment. We focus on three key dimensions of progress and ongoing challenges: raising awareness of the interdependence of ecosystems and human well-being, advancing the fundamental interdisciplinary science of ecosystem services, and implementing this science in decisions to restore natural capital and use it sustainably. Awareness of human dependence on nature is at an all-time high, the science of ecosystem services is rapidly advancing, and talk of natural capital is now common from governments to corporate boardrooms. However, successful implementation is still in early stages. We explore why ecosystem service information has yet to fundamentally change decision-making and suggest a path forward that emphasizes: (i) developing solid evidence linking decisions to impacts on natural capital and ecosystem services, and then to human well-being; (ii) working closely with leaders in government, business, and civil society to develop the knowledge, tools, and practices necessary to integrate natural capital and ecosystem services into everyday decision-making; and (iii) reforming institutions to change policy and practices to better align private short-term goals with societal long-term goals.

Gross domestic product (GDP) summarizes a vast amount of economic information in a single monetary metric that is widely used by decision makers around the world. However, GDP fails to capture fully the contributions of nature to economic activity and human well-being. To address this critical omission, we develop a measure of gross ecosystem product (GEP) that summarizes the value of ecosystem services in a single monetary metric. We illustrate the measurement of GEP through an application to the Chinese province of Qinghai, showing that the approach is tractable using available data. Known as the “water tower of Asia,” Qinghai is the source of the Mekong, Yangtze, and Yellow Rivers, and indeed, we find that water-related ecosystem services make up nearly two-thirds of the value of GEP for Qinghai. Importantly most of these benefits accrue downstream. In Qinghai, GEP was greater than GDP in 2000 and three-fourths as large as GDP in 2015 as its market economy grew. Large-scale investment in restoration resulted in improvements in the flows of ecosystem services measured in GEP (127.5%) over this period. Going forward, China is using GEP in decision making in multiple ways, as part of a transformation to inclusive, green growth. This includes investing in conservation of ecosystem assets to secure provision of ecosystem services through transregional compensation payments.

The paper seeks to contribute to the expanding literature on ecosystem service assessment by considering its integration with economic analyses of such services. Focussing upon analyses for future orientated policy and decision making, we initially consider a single period during which ecological stocks are maintained at sustainable levels. The flow of ecosystems services and their contribution to welfare bearing goods is considered and methods for valuing resultant benefits are reviewed and illustrated via a case study of land use change. We then broaden our time horizon to discuss the treatment of future costs and benefits. Finally we relax our sustainability assumption and consider economic approaches to the incorporation of depleting ecological assets with a particular focus upon stocks which exhibit thresholds below which restoration is compromised.