Flows from Environment to Economy

After completing this Circular, readers will be able to compile accounts for flows from the environment to the economy in the context of ocean accounting. These flows encompass ecosystem services (the contributions that marine and coastal ecosystems make to benefits used in economic and other human activity) as well as natural resource inputs extracted from the ocean environment. Understanding and measuring these flows is essential for three purposes: revealing the economic dependencies on ocean ecosystems, informing sustainable management of marine resources, and integrating environmental considerations into economic decision-making.

This Circular covers (1) the classification and measurement of provisioning, regulating, and cultural ecosystem services in marine contexts, (2) the treatment of natural resource inputs such as fish, water, and energy, (3) the compilation procedure for physical supply and use tables (PSUTs) for ecosystem services, (4) worked examples with synthetic data for coastal zones, and (5) approaches to the monetary valuation of flows from environment to economy. For the treatment of flows from economy to environment (residuals, emissions, waste), see TG-3.4 Flows from Economy to Environment.

Essential prerequisites:

Flows from the environment to the economy are the channel through which ocean ecosystems contribute to human well-being and economic production. The SEEA framework distinguishes two main categories of such flows: ecosystem services, which are the contributions of ecosystem assets to benefits, and natural resource inputs, which are physical materials extracted from the environment for use in economic processes. Both categories are essential for ocean accounting. Marine ecosystem services include fish provisioning, coastal protection, carbon sequestration, and recreation, whilst natural resource inputs include harvested fish, abstracted seawater, and extracted seabed minerals.

Ecosystem services are the contributions of ecosystems to the benefits that are used in economic and other human activity. The SEEA Ecosystem Accounting framework defines ecosystem services as flows between ecosystem assets and economic units, where economic units encompass businesses, governments, and households. In the marine context, ecosystem services include the provision of fish and other harvested biomass, the regulation of climate through carbon sequestration, the protection of coastlines from storms and erosion, the filtration and purification of water, and the provision of recreational and cultural experiences.

Classification of ecosystem services

The SEEA EA presents a reference list of ecosystem services organised into three main sections, summarised in Table 3.1.1 below.

This classification builds upon and is compatible with the Common International Classification of Ecosystem Services (CICES), which provides a hierarchical structure for ecosystem service classification. For ocean accounting, each category has particular relevance. A summary of key marine ecosystem services and their classification is presented in Table 1.

Table 1: Selected marine ecosystem services by category (adapted from SEEA EA Table 6.3). *Nursery habitat is a potentially intermediate service (see Section 3.1 on nursery services); compilers should take care to avoid double counting with provisioning services.

To illustrate how ecosystem services vary across marine and coastal ecosystem types, Table 1a presents a worked example mapping selected ecosystem services to four representative ecosystem types. Compilers are encouraged to develop similar mappings for their accounting area, following the SEEA EA Technical Recommendations guidance to “create a table showing which ecosystem services are likely to be supplied from different ecosystem types for their country or target ecosystem accounting area”. The services listed below follow the three categories defined in SEEA EA Table 6.3: provisioning services, regulating and maintenance services, and cultural services.

Table 1a: Illustrative ecosystem services by marine ecosystem type

Abiotic flows from the marine environment (seawater abstraction for desalination and cooling, extraction of seabed minerals and aggregates, and capture of offshore wind, wave, and tidal energy) are recorded separately as contributions from the environment following the SEEA EA framing in Table 6.1. These abiotic flows are distinct from ecosystem services: they arise through abstraction and extraction of resources from geophysical or geological sources rather than being underpinned by ecological characteristics and processes. Compilers are encouraged to record abiotic flows alongside ecosystem services to enable joint analysis of environmental trends, but they should not be classified within the three ecosystem service categories.

Expanded reference: SEEA EA ecosystem services and ocean relevance

Table 1b provides an expanded reference mapping the ecosystem services from SEEA EA Table 6.3 to their relevance for ocean and coastal accounting. This table is intended to assist compilers in identifying which services from the reference list are most pertinent to their marine accounting area and in selecting appropriate measurement priorities.

Table 1b: SEEA EA ecosystem services and their ocean relevance

Table 1b: SEEA EA ecosystem services mapped to ocean accounting relevance, based on the reference list in SEEA EA Table 6.3.

Provisioning services in marine ecosystems

Fish provisioning services represent the ecosystem contributions to the growth of wild fish and other aquatic organisms that are harvested. This service reflects the role of marine ecosystems in supporting fish populations through provision of habitat, food, and suitable environmental conditions. The SEEA EA notes that “provisioning services are recorded in contexts both of cultivation and of non-cultivation”. For wild-capture fisheries the ecosystem provides the service, whilst for aquaculture the ecosystem contribution is distinguished from cultivated inputs. For detailed guidance on fisheries stock assessment and the relationship between ecosystem services and fish harvests, see TG-6.7 Fisheries Accounting: Integrating Stock Assessment.

Aquaculture provisioning services represent ecosystem contributions to the growth of cultivated aquatic organisms. Marine aquaculture depends on ecosystem services including water quality maintenance, nutrient cycling, and waste assimilation. The distinction between wild-capture and aquaculture is important: for aquaculture, part of the biomass growth results from cultivated inputs (feed, seed stock) whilst the ecosystem provides supporting services. The SEEA EA describes this as distinguishing “the contributions made by cultivated inputs from the contributions made by ecosystem assets”. Detailed treatment of aquaculture accounts is provided in TG-3.9 Aquaculture Accounts.

Other biomass provisioning services include contributions to the growth of seaweed, shellfish, and other harvestable marine organisms. Seaweed harvesting, for example, depends on ecosystem services that support algal growth, including nutrient availability and suitable water temperature and light conditions.

Water supply services in the marine context relate primarily to the abstraction of seawater for desalination, cooling, and other industrial uses. Whilst seawater itself is typically treated as an abiotic flow rather than an ecosystem service (see Section 3.2), the quality of seawater (its temperature, salinity, and freedom from pollutants) may be influenced by ecosystem processes.

Regulating and maintenance services in marine ecosystems

Global climate regulation services represent ecosystem contributions to the regulation of the global climate through carbon sequestration and storage. Marine ecosystems contribute substantially to the global carbon cycle: the ocean absorbs approximately 25—30% of anthropogenic CO2 emissions, whilst coastal ecosystems such as mangroves, seagrass meadows, and salt marshes sequester carbon at rates far exceeding terrestrial forests. This ‘blue carbon’ function is increasingly recognised as an ecosystem service. The SEEA EA states that “global climate regulation services represent a final ecosystem service with the user typically recorded as the global community or, where the focus is on a national ecosystem accounting area, the rest of the world”.

The treatment of global climate regulation services raises questions about national attribution. Following SEEA EA para 6.60, when compiling national accounts the service is recorded as supplied by domestic ecosystems and used by the rest of the world (RoW), with the entry in the use table appearing in the RoW column. Countries may additionally record domestic benefits from climate regulation where quantifiable, but should avoid double counting between global and local climate regulation services.

Nursery population and habitat services are the ecosystem contributions to the maintenance of populations of species through provision of critical habitat. Many commercially important fish species depend on coastal ecosystems such as mangroves, seagrass meadows, and estuaries as nursery habitat. The SEEA EA treats nursery services as potentially intermediate services: “the nursery population services supplied by seagrass meadows are an input to the supply of fish biomass provisioning services, which in turn contribute to the benefit of marketed fish”. Treating nursery services as intermediate makes the case for recording both final and intermediate ecosystem services, so that the contributions of coastal ecosystems to commercial fisheries are fully captured.

Pollination and seed dispersal services in marine contexts include the dispersal of marine plant propagules and the maintenance of genetic connectivity among populations. Whilst less prominent than in terrestrial ecosystems, these services contribute to the resilience and productivity of marine ecosystems.

Soil and sediment retention services represent ecosystem contributions to preventing erosion and maintaining sediment stability. In coastal areas, vegetation such as mangroves and seagrasses stabilise sediments, reducing erosion and maintaining the physical integrity of coastal ecosystems.

Cultural services in marine ecosystems

Marine cultural services reflect the experiential, spiritual, and intellectual contributions of ocean ecosystems to human well-being. Many of these contributions (cultural and spiritual values, non-market recreational benefits, subsistence provisioning) are not mediated through market transactions. In the Ocean Accounts Framework (TG-0.1), these non-market ecosystem contributions correspond to Edge E10 (ecosystem services to society beyond the economy), complementing the market-mediated services captured by Edge E9. These include:

Recreation-related services encompass the ecosystem contributions to recreational activities such as swimming, diving, snorkelling, fishing, and wildlife watching. Coral reefs, beaches, and marine protected areas attract tourists and recreational users, and that use generates economic activity. The SEEA EA notes that “recreation-related services are considered final ecosystem services since they are directly enjoyed by people”. For guidance on marine tourism and recreation accounts, see TG-6.14 Marine and Coastal Tourism Accounting.

Visual amenity services represent the contribution of ecosystems to aesthetic enjoyment through scenic views and landscapes. Coastal seascapes and marine environments contribute to the amenity value of coastal properties and destinations.

Education, scientific, and knowledge services encompass ecosystem contributions to research, education, and the generation of knowledge. Marine ecosystems are sites of scientific discovery and environmental education, and they are associated with traditional knowledge and cultural significance for coastal communities.

Spiritual, artistic, and symbolic services represent contributions to cultural identity, spiritual practices, and artistic inspiration. For many coastal and island communities, the ocean has profound cultural and spiritual significance. The SEEA EA notes that recording these services may involve “indicators of the physical characteristics associated with the supply of the service” rather than direct measurement of service flows.

Figure 3.2.1 illustrates the structure of flows between the environment and the economy as presented in the 2025 SNA (Figure 35.4). Natural inputs flow from the environment to the economy, whilst residuals flow from the economy back to the environment. Economic units within the economy produce and consume products. Recording both directions of this flow structure is necessary for ocean accounts that close the environment-economy circuit.

3.2 Natural Resource Inputs

Natural resource inputs are physical flows from the environment that are moved from their location in the environment as part of economic production processes. The SEEA Central Framework describes natural inputs as encompassing “all physical inputs that are moved from their location in the environment as a part of economic production processes or are directly used in production”. For ocean accounting, key natural resource inputs include:

Aquatic resources extracted through capture fisheries represent the primary natural resource input from marine ecosystems. The SEEA CF recommends measuring extraction as gross catch (the total live weight of fish caught, including discarded catch but excluding pre-catch losses) to capture the full impact on marine resources. The relationship between natural resource inputs (recorded in physical flow accounts) and changes in aquatic resource stocks (recorded in asset accounts as described in TG-3.1 Asset Accounts) provides an important consistency check. Specifically, extraction flows recorded in the PSUT should equal extraction entries in the asset account.

Water abstraction includes the removal of seawater and coastal water for use in economic processes. Whilst seawater stocks are not recorded in asset accounts due to their scale, abstraction flows are relevant for understanding industrial use of marine resources, particularly for desalination and cooling. The SEEA CF notes that “the focus of the SEEA is the inland water system, with provision for the inclusion of sea or ocean water abstracted for production and consumption”.

Energy from natural inputs includes energy captured from marine renewable sources such as tidal, wave, and offshore wind. The SEEA Energy framework describes energy from natural inputs as comprising “flows of energy from the removal and capture of energy from the environment by resident economic units”. These flows are recorded in the physical supply and use tables for energy and represent a growing component of ocean-based economic activity.

Relationship to ecosystem services

The relationship between natural resource inputs and ecosystem services requires careful treatment to avoid double counting. The SEEA EA clarifies this relationship:

• Natural inputs in the SEEA CF include inputs of timber, aquatic resources (e.g. fish), and other biological resources “but only in cases where the production process does not entail cultivation or is unmanaged since cultivated biological resources are produced within the economy”.
• Provisioning services in the SEEA EA are recorded in both cultivation and non-cultivation contexts, reflecting the ecosystem contribution to biomass growth.

For fish, for example, the natural resource input is the harvested catch (a physical flow of biomass from environment to economy), whilst the ecosystem service is the contribution of the marine ecosystem to the growth of that fish population. The two perspectives are complementary: the natural input approach focuses on extraction flows, whilst the ecosystem service approach focuses on the ecosystem’s productive contribution. The SEEA EA states that “natural resource residuals represent those flows of natural resources that are extracted or harvested and immediately returned to the environment. Examples include discarded catch in fishing”.

The matrix is constructed from the same input data as the extent account in TG-3.1 Asset Accounts but presented in a way that makes the direction of each conversion visible. For ocean accounting, this pattern can be extended as a cross-classifier between opening/closing extent and flow categories: each cell of the matrix can be paired with the change in supply of ecosystem services or natural resource inputs attributable to that conversion. For example, the cell at the intersection of [opening: mangrove] x [closing: aquaculture pond] is associated with reductions in coastal protection, carbon sequestration and nursery services, and a corresponding increase in aquaculture provisioning recorded in the SUT.

Structural template — ecosystem type change matrix linked to flow categories (after SEEA EA Table 4.2). Table 1c presents a blank template. Rows are opening ecosystem types, and columns are closing ecosystem types. The total of each row equals the opening extent for that type, and the total of each column equals the closing extent (the accounting identity from SEEA EA para 4.34). Where the EAA total area is unchanged between the two points in time, total row sums equal total column sums.

Table 1c: Ecosystem type change matrix — structural template (after SEEA EA Table 4.2)

Table 1c: Structural template of the ecosystem type change matrix; off-diagonal cells record area converted between ecosystem types; diagonal cells record unchanged area. Cells are blank for compiler population. Structure follows SEEA EA paras 4.34—4.35 and Table 4.2.,

Worked instance, from the conversions in the Section 3.4 coastal zone. The extent account there records mangrove losing 4.0 km² to aquaculture conversion and 2.5 km² to storm erosion, and seagrass losing 0.5 km² to conversion and 1.8 km² to erosion, against managed and natural expansion of 3.3 km² and 1.5 km² respectively. Populating the matrix (km², opening rows against closing columns):

Table 1f: Ecosystem type change matrix, worked (hypothetical coastal zone, 2025, km²)

Read the rows and columns against the extent account and the two agree: mangrove closing extent 493.5 unchanged + 2.5 gained from restored pond area + 0.8 gained by natural expansion = 496.8, which is the closing figure in Table 5 of TG-3.1. The matrix adds what the extent account cannot show — that the 6.5 km² of mangrove reduction went to two different places, 4.0 to aquaculture and 2.5 to bare seabed, and that these have different service consequences and different reversibility.

Paired with the flow change:

Table 1g: Flow-category change paired to the conversion cells of Table 1f

The pairing separates the two kinds of loss a planner should treat differently. Conversion to aquaculture trades one set of services for another and the trade can be appraised. Conversion to bare seabed is loss without compensation, and in this zone it accounts for 4.3 km² of the 8.8 km² reduction — nearly half.

Pairing extent-change cells with flow-category change. For each populated off-diagonal cell in the matrix above, compilers should record (in a parallel table or metadata layer) the associated change in flows attributable to the conversion, classified by SEEA EA service category (provisioning, regulating and maintenance, cultural) and by SEEA CF natural resource input category where relevant. SEEA EA para 4.23 notes that conversions imply “the supply of a different set of ecosystem services”. The extent-change matrix therefore bridges the asset (extent) account and the ecosystem services supply table compiled in Section 3.3 below.

This pattern supports three analytical uses: (a) decomposing observed changes in ecosystem service supply into an area effect (extent change) and an intensity effect (per-area service flow change driven by condition), (b) identifying the conversions that are responsible for the largest shifts in total service supply across the accounting area, and (c) attributing changes in flows to managed versus unmanaged conversions for policy interpretation. SEEA EA para 4.31 notes that the change matrix may be extended to classify conversions by reasons for change (e.g., urban expansion, salinisation, afforestation), and the same extension applies when pairing the matrix with flow categories.

3.3 Physical Supply and Use Tables: Structure and Compilation Procedure

Two distinct accounts are compiled under this heading and should not be confused. The SEEA CF physical supply and use table (CF Table 3.1) records natural inputs entering the economy, products moving within it, and residuals returning to the environment, in one structure. The SEEA EA ecosystem services supply and use table records the contributions of ecosystem assets to economic units. They answer different questions about the same harvest: the CF table records the tonnes of fish removed, the EA table records the ecosystem’s contribution to those fish having grown.

Section 3.2 named the categories of natural input. This is the table they are recorded in. Supply is by the environment, disaggregated by the asset the input is drawn from; use is by the extracting industry. Because natural inputs come from the environment rather than from a producing industry, the supply side has a single origin column, and the analytical content sits in the use side.

Table 1d: Natural resource inputs supply and use table — structural template (after SEEA CF Table 3.1)

The consistency check this table exists to make possible. For every input that is also an asset, the quantity recorded here must equal the extraction entry in the corresponding asset account in TG-3.1. Gross catch in the wild aquatic resources row equals the “Gross catch/harvest” reduction in TG-3.1 Table 1; offshore extraction equals the “Extraction” reduction in the mineral column of TG-3.1 Table 1a. A discrepancy is not a rounding matter — it means either the flow or the stock account has missed a removal, and the SEEA CF treats reconciling the two as a primary quality control.

Using the worked coastal zone of Section 3.4 and the fish stock account in TG-3.1 Section 3.7:

Table 1e: Natural resource inputs, worked fragment (hypothetical coastal zone, 2025)

Seawater abstraction is a natural input but seawater is not an asset, because the SEEA CF excludes it from the asset boundary on grounds of scale (Section 3.2). Abstraction is therefore recorded as a flow with no corresponding stock reduction, and no cross-check applies to that row.

3.3.2 Ecosystem services supply and use tables

Physical supply and use tables (PSUTs) provide the accounting structure for recording flows from the environment to the economy in physical terms. The SEEA Central Framework describes the PSUT as organising information on “the extraction or capture of inputs from the environment, the flows of products within the economy, and the flows of residuals to the environment”.

The general structure of a PSUT for ecosystem services follows the supply and use framework of national accounts, extended to incorporate ecosystem assets as suppliers:

Supply table — records the supply of ecosystem services by ecosystem type and the supply of products by economic units. For ecosystem services, supply is attributed to the ecosystem assets that generate the services.

Use table — records the use of ecosystem services by economic units (industries, government, households) and the use of products as intermediate consumption and final demand. Users of ecosystem services include the economic units that directly benefit from or incorporate the services into their production or consumption activities.

The SEEA EA describes the ecosystem services supply and use account structure as having multiple “quadrants” that capture:

• Supply of ecosystem services by ecosystem type (ecosystem assets as suppliers)
• Use of ecosystem services by economic units (businesses, governments, households)
• Supply of products by industries (standard SNA scope)
• Use of products by economic units (standard SNA scope)

Table 2 presents a simplified structure of an ecosystem services supply and use table.

Table 2: Simplified structure of ecosystem services supply and use table (adapted from SEEA EA Figure 7.1)

Ecosystem services supply-use table: worked template

Table 2a provides a detailed supply-use table template that compilers can adapt for their ocean accounting area. The supply table records ecosystem service quantities by marine ecosystem type, and the use table records which economic units benefit from each service. Total supply must equal total use for each service (the accounting identity).

Table 2a: Ecosystem services physical supply-use table template

SUPPLY TABLE (Physical units by service type)

USE TABLE (Same physical units)

Table 2a: Ecosystem services physical supply-use table template for ocean accounts (adapted from SEEA EA Table 7.1)

The supply-use accounting identity (Total Supply = Total Use for each service) provides a built-in quality check. Compilers should begin with provisioning services where data are most readily available, then progressively extend to regulating and cultural services as methods and data improve.

The following step-by-step procedure guides the compilation of ecosystem services supply and use tables for ocean accounts:

Step 1: Define the accounting area and period. Specify the spatial extent (e.g., EEZ, coastal zone, sub-national region) and the accounting period (typically one year). Identify the marine and coastal ecosystem types present in the area, drawing on the ecosystem extent account (see TG-3.1 Asset Accounts).

Step 2: Select ecosystem services to be measured. Based on Tables 1a and 1b, identify which ecosystem services are relevant to the accounting area. Prioritise services with data availability, policy relevance, and economic significance. Begin with provisioning services (fish harvest, aquaculture), then expand to regulating services (coastal protection, carbon sequestration) and cultural services (recreation).

Step 3: Measure supply by ecosystem type. For each selected ecosystem service, estimate the physical quantity supplied by each ecosystem type during the accounting period. Data sources may include:

• Fish provisioning: fisheries statistics (gross catch allocated to fishing grounds by ecosystem type)
• Carbon sequestration: biophysical models applied to ecosystem extent and condition data (see TG-6.2 Mangrove and Coastal Wetland Accounting)
• Coastal protection: spatial analysis of coastal properties protected by different ecosystem types (see TG-4.1 Remote Sensing and Geospatial Data)
• Recreation: visitor surveys and site counts allocated to ecosystem types

Record supply quantities in the supply table. Ensure that units are consistent across ecosystem types for each service.

Step 4: Identify users of ecosystem services. For each ecosystem service, identify the economic units that use the service. Users are the direct counterparties in the interaction with the ecosystem:

• Fish provisioning: fishing industry (by ISIC division)
• Aquaculture provisioning: aquaculture industry
• Coastal protection: coastal property owners, local governments, households
• Carbon sequestration: rest of the world (following SEEA EA para 6.60)
• Recreation: households, tourism industry

Step 5: Estimate use by economic unit. Quantify the use of each ecosystem service by each user. Where direct measurement is not feasible, apply allocation methods:

• Provisioning services: use equals the quantity harvested by each industry (from production statistics)
• Coastal protection: allocate protected coastline to users based on property value, population, or area protected
• Recreation: allocate visitor-days to households and tourism businesses based on survey data

Record use quantities in the use table.

Step 6: Check accounting identity. For each ecosystem service, verify that Total Supply = Total Use. If the identity does not hold, review data sources and allocation assumptions. Common sources of discrepancy include:

• Unidentified users (e.g., recreation by non-residents not captured in surveys)
• Incomplete spatial coverage (e.g., fishing grounds extending beyond the mapped ecosystem extent)
• Measurement errors in supply or use estimates

Step 7: Document methods and assumptions. Record all data sources, allocation methods, and assumptions in metadata accompanying the accounts. Note areas where measurement quality is limited and where future improvements are planned. This documentation is essential for quality assurance and for interpreting the accounts in policy applications.

Step 8: Compile monetary accounts (if applicable). Apply valuation methods (see Section 3.5) to the physical supply and use tables to derive monetary accounts. The monetary valuation should be compiled separately from physical accounts to maintain transparency and let users assess the valuation assumptions.

Compiling the supply table

The ecosystem services supply table records the physical quantities of ecosystem services supplied by different ecosystem types. For each ecosystem service, the entry reflects the total flow over the accounting period (typically one year), measured in appropriate physical units.

Key considerations for compiling the supply table include:

Attribution to ecosystem types — Provisioning services are relatively straightforward to attribute to specific ecosystem types (e.g., fish provisioning to marine shelf ecosystems). However, “for some services, particularly regulating services such as carbon sequestration, the same service will be supplied by more than one ecosystem type”. The SEEA EA recommends that compilers “create a table showing which ecosystem services are likely to be supplied from different ecosystem types for their country or target ecosystem accounting area”.

Spatial allocation — For ecosystem services whose supply depends on interactions among multiple ecosystem types, “some allocation of ecosystem service flow between ecosystem types will be required”. This is particularly relevant for coastal protection and climate regulation services that may be supplied by a mosaic of ecosystem types.

Measurement units — Physical units vary by service type: tonnes for biomass provisioning, tonnes of carbon for climate regulation, hectares protected for coastal protection, visitor-days for recreation. The SEEA EA provides guidance on possible metrics for each service type.

Compiling the use table

Identifying users — Users are the economic units that directly interact with or benefit from the ecosystem service. For provisioning services, users are typically the industries that harvest or extract the resource. For regulating services, users may be more dispersed—coastal protection benefits property owners, local governments, and the broader community. The SEEA EA distinguishes between “users” (direct counterparties in the interaction with the ecosystem) and “beneficiaries” (the broader set of economic units that ultimately receive benefits).

Location of users — “While the supply of ecosystem services can be directly linked to a spatial area (e.g. to an ecosystem asset), there is no requirement that the location of the user is the same as the location of the area from which the ecosystem service is supplied”. This is especially relevant for regulating services and cultural services, where benefits may accrue to distant populations.

Supply equals use — In accounting terms, total supply must equal total use for each ecosystem service. This accounting identity ensures consistency and completeness and provides a basis for quality assurance of ecosystem service accounts.

Practical guidance: Informal and unregistered beneficiaries of regulating services

Delineating the service providing and benefiting areas: coastal protection

SEEA EA §7.66 defines the service providing area (SPA) and the service benefiting area (SBA) as the spatial boundaries of supply and use for a given service. Coastal protection — a sub-service of flood control services in the Table 6.3 reference list — is the clearest marine case in which the two areas are distinct rather than coincident, and is set out here as the pattern to follow for other spatially separated services.

The counterfactual is what makes this service measurable: the model is run with current ecosystem extent and again with the ecosystems removed or degraded, and the difference is the service flow attributed to the SPA. Data sources and models for that counterfactual are in TG-4.1 Remote Sensing and Geospatial Data. The dependency and vulnerability indicators derived from these entries are in TG-2.3 Social and Livelihood Dependencies Section 3.4.

Physical units and measurement

The SEEA EA recommends that ecosystem services be measured in physical terms before monetary valuation. Physical measurement provides the foundation for understanding the actual flows between ecosystems and the economy, and supports the application of different valuation approaches.

For marine ecosystem services, relevant physical units include. Table 3.3.1 below summarises the recommended units.

For guidance on spatial data sources and methods for measuring ecosystem service supply, see TG-4.1 Remote Sensing and Geospatial Data and TG-4.2 Survey Methods for Ocean Economic Activity.

Worked example: supply-use entries under a spatial conversion scenario

Where a plan or appraisal converts one ecosystem type to another, the change has to be reflected consistently in the extent account and in the services supply-use table. This example traces those entries for a conversion scenario of the kind evaluated in TG-1.2 OA and Marine Spatial Planning Section 3.5.

Scenario: a marine spatial plan converts 500 ha of mangrove to an aquaculture zone.

Step 1: Extent account adjustment

In the ecosystem extent account for the mangrove ecosystem type:

• Opening stock: [baseline mangrove area, ha]
• Reduction — conversion to aquaculture: —500 ha
• Closing stock: [opening stock minus 500 ha]

In the extent account for the aquaculture zone land use category:

• Opening stock: [baseline aquaculture area, ha]
• Addition — conversion from mangrove: +500 ha
• Closing stock: [opening stock plus 500 ha]

Step 2: Services supply-use table adjustments

The supply-use table for ecosystem services records, by ecosystem type and service, the physical quantity supplied (by ecosystem) and used (by economic sector or final beneficiary). The following rows change:

Step 3: Cross-account consistency check

Verify that the service flow changes in Step 2 are reflected in:

• The economic account: reduced fish provisioning from mangrove-dependent fisheries (nursery habitat loss); increased aquaculture output
• The condition account: if extent loss reduces structural state variables (e.g., shoreline habitat complexity), update the condition index accordingly following TG-2.1 Section 3.4.1 and TG-3.1 Section 3.5.2

The full supply-use table structure and column definitions are given in Section 3.3 above; the extent-account entries are compiled following TG-3.1 Asset Accounts Section 3.5.1.

Scenario projections of this kind are estimates, not account entries. They should be labelled as projections and reconciled against the compiled accounts once the conversion has occurred.

3.4 Worked Example: Coastal Zone Ecosystem Services Account

This section presents a worked example of ecosystem services supply and use tables for a hypothetical coastal zone, using synthetic data to illustrate the compilation procedure described in Section 3.3. The example demonstrates how to organise data, apply allocation methods, and verify accounting identities.

The hypothetical accounting area is a 50km coastal zone with four ecosystem types: mangroves (500 ha), coral reefs (1,200 ha), seagrass meadows (800 ha), and open marine shelf (5,000 ha). The accounting period is one year (2025). Three ecosystem services are measured: fish provisioning (tonnes harvested), carbon sequestration (tonnes C per year), and coastal protection (km of coastline protected). Three user categories are identified: fishing industry, coastal properties, and rest of world (RoW).

Step 1: Supply table compilation

Fish provisioning (tonnes): Gross catch statistics indicate 2,400 tonnes of fish harvested from the zone. Spatial analysis of fishing grounds and ecosystem productivity estimates allocate catch as follows:

• Mangroves: 400 tonnes (nursery habitat for inshore species)
• Coral reefs: 600 tonnes (reef-associated species)
• Seagrass meadows: 300 tonnes (seagrass-associated species)
• Open marine shelf: 1,100 tonnes (pelagic and demersal species)

Carbon sequestration (tonnes C/yr): Biophysical models estimate annual carbon sequestration rates per hectare for each ecosystem type, then scale by extent:

• Mangroves: 500 ha × 2.5 tC/ha/yr = 1,250 tC/yr
• Coral reefs: limited sequestration (calcification offsets), estimated at 50 tC/yr
• Seagrass meadows: 800 ha × 1.5 tC/ha/yr = 1,200 tC/yr
• Open marine shelf: phytoplankton sequestration estimated at 500 tC/yr for the shelf area

Coastal protection (km): Spatial analysis identifies 30 km of coastline within the zone. Coastal protection service is attributed to ecosystems based on their position and protective capacity:

• Mangroves: 8 km (direct frontal protection)
• Coral reefs: 12 km (offshore wave attenuation)
• Seagrass meadows: 5 km (supplementary wave dampening in shallow areas)
• Open marine shelf: 0 km (no direct coastal protection function)
• Overlap: 5 km protected by multiple ecosystem types (mangroves + coral reefs). This is allocated 3 km to coral reefs (primary protection) and 2 km to mangroves (secondary protection) to avoid double counting.

Adjusted total: Mangroves 10 km, Coral reefs 15 km, Seagrass 5 km.

Supply table (Table 3a)

Table 3a: Supply of ecosystem services by marine ecosystem type (hypothetical coastal zone, 2025)

Step 2: Use table compilation

Fish provisioning (tonnes): All 2,400 tonnes are used by the fishing industry. Production statistics indicate industrial fishing operations harvest 1,800 tonnes and small-scale fishing operations harvest 600 tonnes.

Carbon sequestration (tC/yr): Following SEEA EA para 6.60, global climate regulation services are attributed to the rest of world (RoW). All 3,000 tC/yr are recorded as used by RoW.

Ecosystem dependency: The fishing industry depends entirely on marine ecosystem services for its inputs (2,400 tonnes of fish). This dependency can be expressed as a ratio of ecosystem service input to industry output value. A high ratio signals exposure to ecosystem degradation, not vulnerability. Whether a decline in the service would cause loss also depends on how sensitive the industry’s output is to that decline and on its capacity to substitute for the service or adapt; the accounts do not generally record substitutability or adaptive capacity, which need separate analysis (for the community-level equivalent, see the livelihood vulnerability index in TG-2.3 Social and Livelihood Dependencies).

Coastal protection value: The 30 km of protected coastline can be valued using replacement cost or avoided damage cost methods (see Section 3.5). The replacement cost of equivalent engineered coastal protection is estimated at USD 5 million per km of coastline, yielding a total replacement cost of USD 150 million for 30 km. Annualising this over a 20-year infrastructure lifespan at a 5% discount rate yields an annual equivalent service value of approximately USD 12 million per year (USD 0.4 million per km per year). Alternatively, avoided damage costs may be estimated from storm surge modelling.

Cross-stack linkages: These flow accounts connect downward to TG-4.1 Remote Sensing and Geospatial Data (ecosystem extent mapping), sideways to TG-3.1 Asset Accounts (ecosystem condition and capacity), and upward to TG-2.4 Ecosystem Goods and Services (indicator derivation). They inform sustainable yield calculations for fisheries (TG-6.7 Fisheries Accounting: Integrating Stock Assessment), blue carbon policy (TG-6.2 Mangrove and Coastal Wetland Accounting), and coastal zone management (TG-1.2 Marine Spatial Planning).

3.5 Monetary Valuation of Flows

Monetary valuation of ecosystem service flows enables comparison across service types, aggregation with other economic flows, and integration into economic decision-making. Because most ecosystem services are not traded in markets, most entries require estimation.

Where the method is specified. The value concepts, the SEEA EA five-level preference order, the methods available at each level, the methods that are not admissible in accounts, and a worked application across four marine services are all in TG-2.4 Environmental (including Ecosystem) Goods and Services Section 3.10, which is normative for the choice of method. TG-1.9 Safe Usage of Monetary Valuation covers whether and when to value at all, and how the resulting figures should be communicated. Asset-level valuation — the NPV of service flows, the discount rate and the horizon — is TG-3.1 Asset Accounts Section 3.3. None of that is restated here.

What this Circular specifies is how a monetary value attaches to a flow entry in the supply and use table, which is a different question from which method produced the number.

Attaching values to supply and use entries

Value the same physical flow that the physical table records. Each monetary entry corresponds cell-for-cell to a physical entry compiled under Section 3.3. Where the physical table splits a service across ecosystem types, or across final and intermediate uses, the monetary table carries the same split. A monetary total that cannot be decomposed back onto the physical rows is not a supply and use entry.

Value only what the physical account can support. Where a service has been recorded in physical terms but the compiler has no admissible method for valuing it, the monetary cell is left empty and flagged, not filled with a benefit-transfer figure carried over from another country. Physical accounts should always be compiled as the primary output.

The SEEA EA describes monetary valuation principles as “internationally recognised statistical principles and recommendations” (SEEA EA Preface, para 8) rather than a full international statistical standard. Compilers should document the methods, assumptions and uncertainties involved in their valuations.

Valuation of provisioning services

Provisioning services are generally the most amenable to valuation, as they contribute to marketed goods. The resource rent approach is commonly applied, estimating the ecosystem service value as the residual after deducting costs of labour, produced assets, and intermediate inputs from the value of output.

For fish provisioning services, the resource rent is calculated as:

Resource rent = Output value - Intermediate consumption - Compensation of employees - Consumption of fixed capital - Return on produced assets

This residual represents the return attributable to the natural resource input and the ecosystem’s contribution to fish growth. The SEEA EA notes that “exchange values for provisioning services are likely to be estimated based on observed market transactions”. The SEEA Valuation Guidelines elaborate that “the residual value and resource rent methods estimate the value for an ecosystem service by first taking the gross output value of the final marketed good to which the ecosystem service provides an input, and then deducting the cost of all other inputs”.

Valuation of regulating and maintenance services

Replacement cost method estimates the cost of replacing an ecosystem service with an engineered or artificial substitute. For coastal protection, this might involve comparing the protection provided by a coral reef or mangrove with the cost of constructing a sea wall or breakwater. The SEEA Valuation Guidelines note that “mangroves may be planted or restored as a ‘green infrastructure’ alternative to ‘hard’ engineered flood defences”. The validity of the replacement cost method depends on three conditions: “the substitute can provide exactly the same function of the good or service substituted for; the substitute is actually the least-cost alternative; and evidence indicates an actual demand for the substitute”.

Avoided damage cost method estimates value based on the damages that would occur in the absence of the ecosystem service. For coastal protection, this involves estimating the expected damages from flooding or erosion that are prevented by the ecosystem. The SEEA Valuation Guidelines state that “the validity of the avoided damage cost method depends on conditions including that the damages avoided can be related to a specific service; and that people would be willing to pay an amount to actually avoid the damage”.

Productivity change method estimates value based on the contribution of ecosystem services to the productivity of economic activities. This approach can be applied where ecosystem services (such as nursery habitat for fish) enhance the productivity of commercial fisheries.

For global climate regulation services, valuation typically applies the social cost of carbon or market prices from carbon trading systems. However, the SEEA EA notes that “global climate regulation services represent a final ecosystem service with the user typically recorded as the global community”, raising questions about attribution of values to national accounts. For guidance on carbon accounting and valuation in the marine context, see TG-6.2 Mangrove and Coastal Wetland Accounting.

The SEEA Valuation Guidelines describe the travel cost method as “based on measuring the costs incurred (and the foregone income) by households or individuals to reach a site and hence receive an ecosystem service from the site, usually in the context of recreation activity”. For marine recreation, this method has been applied to value diving and snorkelling at coral reefs, coastal fishing, and beach visits.

The methods above value a service. They do not, on their own, produce an account. SEEA EA Chapter 9 specifies the monetary supply and use account, which takes the physical table compiled in Section 3.3 and restates every cell in currency units at the exchange value of the service. It is the bridge between the physical service flows recorded here and the net present value of the ecosystem asset in TG-3.1 Section 3.5.3: the asset value is the discounted stream of the flows in this table, and cannot be compiled without it.

The unit value is an explicit column, not an implied one. Total monetary supply for a service equals its physical quantity multiplied by a unit exchange value, and the account records all three. Recording only the product hides which of the two moved. This is the same separation the revaluation entry provides in the asset account, and without it a rise in the value of a service is indistinguishable from a rise in the flow of it.

Table 2b: Ecosystem services monetary supply-use table — structural template (after SEEA EA Chapter 9)

MONETARY SUPPLY TABLE (currency units)

MONETARY USE TABLE (currency units)

Table 2b: Structural template of the monetary ecosystem services supply and use table. Rows and columns mirror Table 2a exactly. The preference level in the method column is the level from the hierarchy in Table 3.5.1 and in TG-2.4 Section 3.10, and recording it in the account is what lets a user judge how far a figure sits from an observed price.

Worked example, continuing the coastal zone of Section 3.4. Applying the unit values derived in that section’s interpretation to the physical quantities in Tables 3a and 3b:

Table 3d: Monetary supply of ecosystem services by marine ecosystem type (hypothetical coastal zone, 2025, USD/year)

Two cautions follow, and both should be carried into any use of these figures. First, the ranking is a ranking of unit values, and the three unit values here come from three different levels of the preference hierarchy: the fish rent is close to an observed price, the coastal protection figure is an annualised engineering cost, and the carbon figure is a policy parameter. Aggregating across levels is permitted but the composition should be disclosed. Second, USD 12 million of the USD 13.6 million total rests on a single replacement-cost estimate, so the total is about as reliable as that one number. Present the composition, not only the total.

Integration with ecosystem asset valuation

The monetary value of ecosystem services provides the basis for valuing ecosystem assets themselves. Under the net present value (NPV) approach, ecosystem asset value equals the discounted stream of expected future ecosystem service flows:

Ecosystem asset value = Sum of (Expected future ecosystem service flows / (1 + discount rate)^t)

This creates an important link between flow accounts (ecosystem services) and stock accounts (ecosystem assets) as described in TG-3.1 Asset Accounts.

Changes in ecosystem service flows—whether due to changes in ecosystem extent, condition, or external factors—directly affect ecosystem asset values. The concept of degradation in SEEA EA captures the loss in asset value attributable to decline in ecosystem condition and associated reduction in ecosystem service supply. The SEEA EA describes degradation as involving “measuring the value of degradation in terms of loss in future value of ecosystem services due to a decline in ecosystem condition”. This linkage between flow and asset accounts ensures consistency in the accounting framework and supports analysis of the sustainability of ecosystem use.