Environmental (including Ecosystem) Goods and Services

1. Outcome

This Circular provides comprehensive guidance on compiling indicators of environmental goods and services, including ecosystem services, within the context of ocean accounting. Ecosystem services represent the contributions that marine and coastal ecosystems make to benefits enjoyed by people and the economy--from provisioning services such as fish and other harvested biomass, to regulating services such as coastal protection and carbon sequestration, to cultural services such as recreation and amenity values.^[1] Understanding and measuring these flows is essential for demonstrating the economic dependencies on ocean ecosystems, informing sustainable ocean management, and integrating environmental considerations into economic decision-making.

This Circular establishes an indicator framework aligned with the SEEA Ecosystem Accounting (SEEA EA) reference list of ecosystem services, providing guidance on measurement approaches for provisioning, regulating, and cultural service indicators in both physical and monetary terms.^[2] The guidance covers the derivation of indicators from ecosystem service flow accounts, the selection of appropriate measurement units, and the interpretation of physical versus monetary indicators for different policy applications.

The methodology supports critical decision use cases for governments managing ocean resources. It enables ocean-related EGSS measurement by identifying industries and activities engaged in environmental protection and resource management related to ocean ecosystems, following the Classification of Environmental Protection Activities (CEPA) and Classification of Resource Management Activities (CReMA). It supports green economy and blue economy monitoring by revealing the economic value of ecosystem services embedded in ocean-based industries such as fisheries, aquaculture, and tourism. It facilitates environmental protection expenditure tracking by enabling compilation of expenditure on ocean ecosystem restoration, coastal protection infrastructure, and marine conservation activities, classified according to CEPA categories. It informs marine spatial planning by quantifying the ecosystem service flows associated with different ocean uses and ecosystem types, supporting trade-off analysis and allocation decisions (see TG-1.2 Marine Spatial Planning).

By applying this guidance, readers will be equipped to compile robust indicators of marine ecosystem services that reveal the value of ocean ecosystems to national economies and human well-being. This Circular is distinct from TG-3.2 Flows from Environment to Economy, which covers the underlying supply and use table methodology for ecosystem service accounts; the present Circular focuses on compiling summary indicators from those accounts. The guidance supports the valuation framework described in TG-1.9 Safe Usage of Monetary Valuation and builds on the asset-service linkages established in TG-3.1 Asset Accounts.

2. Requirements

This Circular requires familiarity with:

• TG-0.1 General Introduction to Ocean Accounts -- for the conceptual framework connecting ecosystems to economic activity
• TG-0.2 Overview of Relevant Statistical Standards -- for the international statistical standards underpinning ocean accounting, including the SEEA EA and SEEA CF frameworks referenced throughout this Circular
• TG-3.1 Asset Accounts -- for understanding ecosystem assets and their relationship to service supply
• TG-3.2 Flows from Environment to Economy -- for the accounting structure underlying ecosystem service indicators, including physical supply and use tables

For detailed guidance on monetary valuation methods referenced throughout this Circular, see TG-1.9 Safe Usage of Monetary Valuation.

3. Guidance Material

Ecosystem services serve as the central concept connecting ecosystem assets to the production and consumption activity of businesses, households, and governments.^[3] The measurement of ecosystem services through ecosystem accounting is thus central to describing the integrated relationship between marine ecosystems and human activity. Indicators derived from ecosystem service accounts provide summary measures that can be used to track changes over time, compare across ecosystem types and regions, and inform policy decisions concerning ocean management and conservation.

This section establishes the indicator framework (Section 3.1), addresses the relationship between ecosystem services and the environmental goods and services sector (Section 3.2), then examines indicators for each major category of ecosystem services: provisioning (Section 3.3), regulating (Section 3.4), and cultural services (Section 3.5). Section 3.6 addresses the critical distinction between physical and monetary indicators and their appropriate applications. Section 3.7 presents the compilation procedure for deriving indicators from accounts, and Section 3.8 provides a worked example with synthetic data. This Circular builds on the accounting methodology presented in TG-3.1 Asset Accounts and TG-3.2 Flows from Environment to Economy, focusing specifically on indicator derivation and interpretation.

3.1 Ecosystem Services Indicator Framework

The SEEA EA provides a comprehensive framework for deriving indicators from ecosystem service accounts.^[4] Ecosystem service indicators can be derived from both the supply and use perspectives of the ecosystem services supply and use tables (SUTs), and can be expressed in physical or monetary terms. The supply and use table methodology is described in detail in TG-3.2 Flows from Environment to Economy; this section addresses the derivation of indicators from those accounts.

3.1.1 Classification structure

The reference list of ecosystem services in SEEA EA organizes services into three broad categories:^[5]

1. Provisioning services -- ecosystem contributions to the growth of biomass and other materials that are extracted or harvested from ecosystems for use in economic activity
2. Regulating and maintenance services -- ecosystem contributions that regulate biological processes and influence climate, hydrological, and biochemical cycles, thereby maintaining environmental conditions beneficial to individuals and society
3. Cultural services -- the experiential and intangible contributions of ecosystems, related to the perceived or actual qualities of ecosystems, that support a range of cultural benefits

For ocean accounting, each category encompasses distinct marine ecosystem services with specific measurement requirements and indicator possibilities. Table 1 summarises the key marine ecosystem services within each category and their indicative measurement units. The selection in Table 1 reflects the ecosystem services most commonly relevant to marine and coastal contexts and is not exhaustive. The SEEA EA reference list (Table 6.3) includes additional services such as wild animals and plants provisioning (covering non-fish marine species and marine bioprospecting for genetic material), storm mitigation services (where these are analytically distinct from coastal protection), and soil and sediment retention services.^[6] Compilers should consult the full SEEA EA reference list and include additional services where they are significant for their national ocean accounting context.

Table 1: Marine ecosystem services indicator framework (adapted from SEEA EA Table 6.3)^[7]

3.1.2 Indicator types

Three main types of indicators can be derived from ecosystem service accounts:^[8]

Flow indicators measure the quantity of ecosystem services supplied or used during an accounting period. These are the primary indicators derived from ecosystem service SUTs and represent the most direct measure of ecosystem contributions to benefits. Examples include tonnes of fish harvested (provisioning), tonnes of carbon sequestered (regulating), and visitor-days (cultural services).

Capacity indicators measure the potential or sustainable level of ecosystem service supply. The SEEA EA defines ecosystem capacity as "the ability of an ecosystem to generate an ecosystem service under current ecosystem condition, management and uses, at the highest yield or use level that does not negatively affect the future supply of the same or other ecosystem services."^[9] Capacity indicators are particularly important for sustainability assessment, as they allow comparison of actual flows against sustainable thresholds. The relationship between ecosystem condition and service capacity is addressed in TG-3.1 Asset Accounts.

Derived indicators combine ecosystem service data with other information to produce policy-relevant ratios and indices. Examples include ecosystem service intensity indicators (ecosystem services per hectare or per unit of ecosystem asset value), sustainability ratios (actual flow divided by sustainable capacity), and dependency ratios (share of industry output dependent on ecosystem services).

For practical compilation purposes, compilers may find it useful to distinguish headline indicators from supporting indicators. Headline indicators are a small number of high-level summary measures intended for national reporting and policy communication--for example, Gross Ecosystem Product, total fish provisioning services, and aggregate coastal protection value. Supporting indicators provide the disaggregated detail needed for analytical work and are typically reported in supplementary tables. The SEEA EA notes that headline indicators "provide a summary of key features of ecosystems that can be monitored over time" while detailed indicators "provide more comprehensive information for use by researchers and policy analysts."^[10] Compilers should design their indicator sets with both audiences in mind, ensuring that headline indicators are traceable to the supporting detail in the underlying accounts.

3.1.3 Spatial allocation

Many ecosystem services, particularly regulating services, are generated at landscape or seascape scale involving multiple ecosystem types.^[11] For indicator purposes, allocation of service flows to specific ecosystem types may be required. The SEEA EA notes that "a number of ecosystem services, particularly regulating and maintenance services but also some cultural services, are generated at landscape scale in the sense that this involves a range of ecosystem assets of different types."^[12]

For ocean accounting, spatial allocation is particularly relevant for:

• Coastal protection services supplied by combinations of coral reefs, mangroves, and seagrass (see TG-6.1 Coral Reef Accounts, TG-6.2 Mangrove and Wetland Accounts, and TG-6.3 Seagrass Accounts)
• Water purification services involving multiple coastal ecosystem types within estuaries
• Nursery habitat services that span mangroves, seagrass meadows, and nearshore waters

3.2 Environmental Goods and Services Sector (EGSS)

The Environmental Goods and Services Sector (EGSS) framework complements the ecosystem services accounting framework by identifying the industries and activities engaged in producing goods and services for environmental protection and resource management purposes.^[13] While ecosystem services flow from ecosystems to economic units, EGSS represents the economic response--the industries and activities that produce goods and services aimed at environmental protection (following CEPA) or resource management (following CReMA).

3.2.1 Relationship to ecosystem services

The SEEA Central Framework describes EGSS as comprising "the producers of environmental protection and resource management goods and services" and notes that "the output of the EGSS equals the sum of the supply of environmental protection services and resource management services."^[14] For ocean accounting, the relevant EGSS activities include:

Table 2: Ocean-related EGSS activities and their connections to ecosystem services

The connection between EGSS and ecosystem services is indirect but analytically important. EGSS output represents economic expenditure on activities that maintain, enhance, or restore the capacity of ecosystems to supply services. For example, expenditure on marine protected area management (CEPA 6) supports the maintenance of ecosystem condition, which in turn sustains the capacity of coral reef, mangrove, and seagrass ecosystems to supply provisioning, regulating, and cultural services. Fisheries management expenditure (CReMA 12) aims to maintain fish stocks within sustainable limits, thereby protecting the capacity of marine ecosystems to supply fish provisioning services on an ongoing basis.

3.2.2 Compilation approach for ocean EGSS indicators

EGSS indicators are derived from supply-use tables extended to incorporate environmental protection and resource management activities. The SEEA CF describes the compilation approach as involving three steps: (i) identifying relevant industries and activities using CEPA and CReMA classifications; (ii) measuring the output of environmental goods and services by those industries; and (iii) measuring the use of those goods and services by final demand categories and intermediate consumption.^[15]

For ocean accounting, key data sources include:

• Government budget data on expenditure by environment and fisheries ministries, classified according to CEPA (e.g., marine protected area management, coastal pollution control) and CReMA (e.g., fisheries stock assessment, aquaculture extension services)
• Industry surveys of businesses engaged in environmental consulting, marine monitoring, coastal restoration, and other ocean-related environmental services
• Specialized ocean accounts for fisheries management (TG-3.6 Fisheries Accounts), aquaculture (TG-3.9 Aquaculture Accounts), and offshore energy (TG-3.10 Offshore Energy Accounts) that provide detail on resource management activities

Compilers should distinguish between:

• Primary EGSS producers -- units whose principal activity is environmental protection or resource management (e.g., marine consulting firms, government environmental agencies)
• Secondary EGSS producers -- units whose principal activity is not environmental, but which produce environmental goods and services as a secondary output (e.g., aquaculture facilities providing fish nursery habitat management as ancillary environmental activity)
• Ancillary EGSS producers -- units producing environmental services for own final use (e.g., manufacturing plants operating in-house wastewater treatment for coastal discharges)

The distinction matters for indicator interpretation: primary and secondary producers contribute to measured EGSS output and value added, while ancillary production is recorded as intermediate consumption within the producing unit.

3.3 Provisioning Service Indicators

Provisioning services represent ecosystem contributions to the growth of biomass and materials that are extracted or harvested for use in economic activity.^[16] In the marine context, provisioning services encompass fish and other aquatic organisms, aquaculture production, seaweed and algae, and other biomass such as mangrove timber. The underlying accounting methodology is described in TG-3.2 Flows from Environment to Economy.

3.3.1 Fish provisioning indicators

Fish provisioning services represent the ecosystem contributions to the growth of wild fish and other aquatic organisms that are harvested by capture fisheries.^[17] Key indicators include:

Physical flow indicators:

• Gross catch (tonnes): Total live weight of fish caught, including retained catch and discarded catch but excluding pre-catch losses. The SEEA CF recommends gross catch as the preferred measure of extraction.^[18]
• Landings (tonnes): Live weight equivalent of fish brought to port, commonly available from fisheries statistics
• Catch by species group (tonnes): Disaggregated catch data by major species categories (pelagic, demersal, crustaceans, molluscs)
• Catch by ecosystem type (tonnes): Allocation of catch to supplying marine ecosystem types (e.g., continental shelf, pelagic, coral reef associated)

Capacity and sustainability indicators:

• Sustainable yield (tonnes): Maximum catch that can be taken without reducing long-term stock productivity
• Exploitation rate: Ratio of actual catch to sustainable yield; values above 1.0 indicate depletion
• Stock status index: Proportion of stocks within biologically sustainable limits

The relationship between fish provisioning services and asset accounts is fundamental: extraction recorded in the ecosystem service SUT should correspond to extraction entries in the aquatic resource asset account as described in TG-3.1 Asset Accounts.^[19] This provides an important consistency check for ocean accounts.

Compilers should note that illegal, unreported, and unregulated (IUU) fishing presents a significant challenge for provisioning service indicators in many ocean accounting contexts. The SEEA CF addresses illegal extraction in the context of asset accounts, recommending that "all activities, whether legal or illegal, should be included within the production boundary" provided they can be estimated.^[20] For indicator purposes, IUU catch should be included in estimates of total extraction where feasible, as omitting it would understate provisioning service flows and overstate the sustainability of fish stocks. Where direct estimates of IUU catch are unavailable, compilers should document the likely direction and magnitude of bias and consider sensitivity analysis using available estimates from regional fisheries management organisations or FAO assessments.

3.3.2 Water and other provisioning indicators

While provisioning of water from marine sources is typically treated as an abiotic flow rather than an ecosystem service, ecosystem contributions to water quality and regulation may be relevant:^[21]

Water-related indicators:

• Freshwater provision from coastal ecosystems (cubic metres): Where coastal wetlands contribute to freshwater supply
• Desalination intake volume (cubic metres): Seawater abstraction for desalination (treated as abiotic flow)

Other biomass provisioning indicators:

• Seaweed and algae harvest (tonnes): Ecosystem contribution to growth of harvested seaweed
• Shellfish harvest (tonnes): Wild shellfish collection
• Mangrove timber provisioning (cubic metres): Wood harvested from mangrove ecosystems

3.4 Regulating Service Indicators

Regulating and maintenance services represent ecosystem contributions that regulate biological processes and maintain environmental conditions beneficial to people and society.^[22] Marine regulating services are particularly significant for ocean accounting, encompassing critical ecosystem contributions that are often "invisible" in conventional economic measures. The underlying accounting methodology is described in TG-3.2 Flows from Environment to Economy.

3.4.1 Global climate regulation indicators

Global climate regulation services represent ecosystem contributions to reducing concentrations of greenhouse gases in the atmosphere through carbon sequestration and storage.^[23] Marine ecosystems play a critical role in the global carbon cycle, and "blue carbon" ecosystems such as mangroves, seagrass meadows, and salt marshes are increasingly recognized for their climate mitigation potential.

The SEEA EA identifies two components of global climate regulation services:^[24]

Carbon retention reflects the ability of ecosystems to accumulate and retain carbon stocks, supplying a service through the avoided emission of carbon to the atmosphere. The indicator for carbon retention is the stock of carbon held by ecosystem assets at the beginning of the accounting period.

Carbon sequestration reflects the ability of ecosystems to remove carbon from the atmosphere for long-term storage. The indicator is net carbon uptake over the accounting period, typically measured as net ecosystem carbon balance.

Key indicators:

• Carbon stock (tonnes C): Total carbon stored in blue carbon ecosystems (mangroves, seagrass, salt marshes), including above-ground biomass, below-ground biomass, and soil carbon
• Carbon sequestration rate (tonnes C/year): Net annual carbon uptake by marine and coastal ecosystems
• Carbon stock by ecosystem type (tonnes C): Disaggregated carbon storage by ecosystem type (mangroves, seagrass, tidal marshes, marine shelf sediments)
• Carbon retention service (tonnes C): Opening stock of carbon, serving as proxy for the flow of retention services

For blue carbon ecosystems, the SEEA EA recommends that measurement scope include carbon stored to a maximum of two metres below the surface in the case of organic carbon-rich soils such as those found in mangroves and seagrass meadows.^[25] Related asset information is recorded in TG-3.1 Asset Accounts.

The treatment of global climate regulation services raises questions about user attribution. The SEEA EA notes that the user of global climate regulation services is "the global community or, where the focus is on a national ecosystem accounting area, the rest of the world."^[26] For national ocean accounts, this implies that the bulk of carbon sequestration services should be attributed to the rest of the world as the beneficiary, reflecting the global public good nature of climate regulation. However, a country may also derive domestic benefits from its own contribution to global climate stability. In practice, compilers should record the full physical flow of carbon sequestration in the supply table (attributed to domestic ecosystem types) and allocate the use to "rest of the world" in the use table. For monetary valuation, the exchange value approach would value the service at the price that would be agreed between a willing buyer and seller, which in practice is typically approximated using observed carbon market prices or abatement cost methods. The indicator implications are that physical indicators of carbon sequestration represent domestic ecosystem contributions, while monetary indicators should be interpreted carefully given that the beneficiaries are predominantly global rather than domestic.

3.4.2 Coastal protection indicators

Coastal protection services represent ecosystem contributions to reducing the impacts of coastal hazards including storms, waves, and erosion.^[27] Coral reefs, mangroves, seagrass beds, salt marshes, and coastal dunes all provide natural flood and storm protection. The SEEA EA notes that coastal protection services are "final ecosystem services" provided by "linear elements in the seascape (e.g. coral reefs, sand banks, dunes or mangrove ecosystems along the shore) to protecting the shore and thus mitigating the impacts of tidal surges or storms on local communities."^[28]

Physical indicators:

• Coastline protected (kilometres): Length of coastline benefiting from ecosystem-based coastal protection
• Area protected (hectares): Coastal land area with reduced flood risk due to ecosystem services
• Wave attenuation (%): Percentage reduction in wave energy provided by coral reefs, mangroves, or seagrass
• Population protected (number): Coastal population within areas benefiting from ecosystem-based protection

Capacity indicators:

• Protection capacity index: Measure of ecosystem condition relative to optimal protective function
• Vulnerability reduction: Change in coastal vulnerability attributable to ecosystem services

The measurement of coastal protection services depends on the likelihood of hazard events and the presence of assets or population at risk.^[29] Even where hazard probability is high, no ecosystem service flow is recorded if there are no potential damages to be avoided. Detailed guidance on coastal protection ecosystem accounts is provided in the thematic circulars: TG-6.1 Coral Reef Accounts, TG-6.2 Mangrove and Wetland Accounts, and TG-6.3 Seagrass Accounts.

3.4.3 Other regulating service indicators

Water purification indicators:

• Nutrient retention (tonnes N, P): Quantity of nutrients removed or retained by coastal ecosystems
• Sediment retention (tonnes): Sediment captured by coastal vegetation before reaching marine waters
• Water quality improvement index: Composite measure of ecosystem contribution to water quality

Nursery and habitat maintenance indicators:

• Nursery habitat extent (hectares): Area of mangroves, seagrass, and other ecosystems providing nursery functions
• Recruitment contribution (%): Estimated proportion of commercial fish recruitment dependent on coastal nursery habitat
• Habitat connectivity index: Measure of connectivity among nursery, juvenile, and adult habitats

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."^[30] This highlights the importance of recording both final and intermediate ecosystem services to fully capture the contributions of coastal ecosystems to commercial fisheries.

Erosion control indicators:

• Sediment stabilisation (hectares): Coastal area with reduced erosion due to ecosystem services
• Erosion rate reduction (%): Percentage reduction in erosion attributable to vegetation

3.5 Cultural Service Indicators

Cultural services represent the experiential and intangible contributions of ecosystems that support a range of cultural benefits.^[31] Marine cultural services reflect the variety of ways people connect to and identify with ocean ecosystems. The SEEA EA notes that cultural services are defined based on "the perceived or actual qualities of ecosystems whose existence and functioning contribute to a range of cultural benefits."^[32]

3.5.1 Recreation indicators

Recreation-related services are the ecosystem contributions to recreational activities through the biophysical characteristics and qualities of ecosystems that enable people to use and enjoy the marine environment.^[33]

Physical indicators:

• Visitor-days (number): Total person-days of recreational visits to marine and coastal ecosystems
• Recreational fishing trips (number): Fishing trips undertaken for recreation rather than commercial purposes
• Diving/snorkelling visits (number): Visits to coral reefs and other underwater attractions
• Beach visits (number): Recreational visits to coastal beaches and shores

Activity-specific indicators:

• Recreational catch (tonnes): Fish caught during recreational fishing activities (also recorded as provisioning service)
• Whale/dolphin watching trips (number): Marine wildlife tourism activities
• Marine protected area visits (number): Recreational visits to MPAs

The SEEA EA notes that where biomass is harvested in a recreational context and retained for consumption, "the quantity of the associated biomass should be included as part of biomass provisioning services. At the same time, there would be a connection to the measurement of cultural services."^[34] This means that recreational fishing generates both a cultural service flow (the recreational experience) and a provisioning service flow (the harvested biomass). Both flows should be recorded in the accounts, but care is needed when presenting indicators to avoid misleading double-counting in aggregate measures. In practice, the physical indicator for the cultural service should be expressed in units that capture the recreational experience (visitor-days or trips), while the physical indicator for the provisioning service should be expressed in harvest units (tonnes). Monetary indicators require particular attention: the cultural service value (willingness to pay for the recreational experience) and the provisioning service value (resource rent on the harvested biomass) capture distinct economic contributions and should be presented separately rather than summed without explanation.

3.5.2 Amenity indicators

Visual amenity services represent ecosystem contributions to local living conditions through sensory benefits, especially visual appreciation of seascapes.^[35]

Physical indicators:

• Coastal property premium index: Measure of property value differentials attributable to marine views and coastal proximity
• Seascape quality index: Composite measure of visual amenity characteristics
• Blue space accessibility (population within distance): Population with access to coastal recreational areas

3.5.3 Spiritual, scientific, and educational indicators

Scientific and educational indicators:

• Research publications (number): Scientific outputs associated with marine ecosystem research
• Educational visits (number): School and university visits to marine educational sites
• Traditional knowledge documentation: Records of indigenous and local knowledge associated with marine ecosystems

Spiritual and symbolic indicators:

• Sacred site extent (hectares): Marine and coastal areas of spiritual significance
• Cultural heritage sites (number): Marine and coastal sites of cultural and historical significance

The measurement of cultural services associated with indigenous and traditional knowledge requires particular care. The SEEA EA provides limited specific guidance on this topic, but the broader framework recognises that cultural services include "spiritual, artistic and symbolic services" that reflect the significance of ecosystems in cultural, spiritual, and identity contexts.^[36] For ocean accounting, compilers should recognise that indigenous and local communities often hold deep cultural and spiritual connections to marine ecosystems that may not be adequately captured by conventional indicators. Engagement with indigenous and local communities should be undertaken in accordance with the principle of free, prior, and informed consent (FPIC), and indicators should be co-designed with communities where cultural and spiritual values are being measured. Compilers should avoid reducing complex cultural relationships to simplistic quantitative indicators and should consider qualitative supplementary information to accompany any quantitative measures. Where traditional ecological knowledge contributes to the understanding of ecosystem condition or service flows, this should be acknowledged and appropriately attributed.

3.6 Physical vs Monetary Indicators

Ecosystem service indicators can be expressed in physical units or monetary terms. Both perspectives provide valuable but distinct information for policy and analysis.^[37] The choice between physical and monetary indicators depends on the analytical purpose, data availability, and policy context. TG-1.9 Safe Usage of Monetary Valuation provides detailed guidance on the valuation concepts and methods underlying monetary indicators.

3.6.1 Physical indicators

Physical indicators express ecosystem services in appropriate natural units: tonnes of fish, tonnes of carbon, visitor-days, hectares protected, and so forth. Physical indicators have several important characteristics:^[38]

Advantages:

• Direct measurement of ecosystem contributions without reliance on valuation methods
• Comparable across time without adjustment for price changes
• Transparent and readily understandable for non-specialists
• Foundation for sustainability assessment (comparison of flows against ecological thresholds)
• No aggregation across different service types required or implied

Limitations:

• Cannot be directly aggregated across different ecosystem services
• Cannot be directly compared with standard economic measures (GDP, income)
• May not convey economic significance to policy audiences

The SEEA EA emphasises that "the ecosystem accounting framework is well suited to deriving a wide range of indicators from a single information base" and that physical accounts are foundational.^[39] Physical accounts should always be compiled as the primary output, with monetary valuation undertaken as a complement where appropriate and feasible. This principle is also emphasised in TG-1.9 Safe Usage of Monetary Valuation.

3.6.2 Monetary indicators

Monetary indicators express ecosystem services in currency units, enabling aggregation across service types and comparison with economic measures.^[40] Monetary valuation follows the exchange value concept of national accounts rather than welfare values, as described in TG-1.9 Safe Usage of Monetary Valuation.^[41]

Advantages:

• Enable aggregation across different ecosystem services (e.g., Gross Ecosystem Product)
• Comparable with standard economic measures (GDP, industry value added)
• Communicate economic significance to policy and business audiences
• Support cost-benefit assessment and trade-off analysis

Limitations:

• Valuation methods involve assumptions and uncertainties
• Exchange values do not capture full welfare significance of ecosystems
• May create misleading impression of commensurability with market goods
• Risk of misinterpretation if limitations not clearly communicated

The SEEA EA notes that "monetary values will not fully reflect the importance of ecosystems for people and the economy" and that "assessing the importance of ecosystems therefore requires consideration of a wide range of information extending beyond data on their monetary value."^[42]

Key monetary indicators:

• Gross Ecosystem Product (GEP): Aggregate monetary value of all final ecosystem services supplied by marine ecosystems within an accounting area over an accounting period^[43]
• Ecosystem service value by type: Monetary value disaggregated by provisioning, regulating, and cultural services
• Ecosystem service value per hectare: Intensity measure enabling comparison across ecosystem types
• Ecosystem service contribution to industry output: Value of ecosystem services used as inputs to specific industries (fisheries, tourism, aquaculture)

3.6.3 Valuation approaches by service type

Different valuation methods are appropriate for different ecosystem services.^[44] The SEEA EA establishes a preference order for valuation methods based on proximity to observed market prices. Detailed guidance on each method is provided in TG-1.9 Safe Usage of Monetary Valuation.

Table 3: Valuation approaches for marine ecosystem services (based on SEEA EA preference order)

For global climate regulation services, the preferred valuation approach uses observed carbon market prices or abatement cost methods, which align with the exchange value concept used in national accounts. The "social cost of carbon" (SCC)--which estimates the marginal damage from an additional tonne of carbon emissions--represents a welfare-based measure rather than an exchange value and is therefore not the preferred approach under SEEA EA guidance.^[45] However, the SCC may be used as an alternative where carbon market prices are not available or where the policy context specifically requires a damage-cost perspective. Where the SCC is used, compilers should clearly document that it represents a welfare value rather than an exchange value and note the divergence from standard accounting practice. This treatment should be consistent with the guidance provided in TG-1.9 Safe Usage of Monetary Valuation.

3.6.4 Presentation and interpretation

When presenting ecosystem service indicators, compilers should:^[46]

1. Present physical and monetary indicators together -- Physical accounts provide the foundation and should always accompany monetary values
2. Document methods and assumptions -- Clearly state the valuation methods used and key assumptions
3. Acknowledge uncertainties -- Communicate the confidence level and key sources of uncertainty
4. Avoid over-interpretation -- Monetary values represent exchange values, not the full importance of ecosystems
5. Provide contextual information -- Include data on ecosystem extent, condition, and trends to support interpretation

These principles are consistent with the guidance in TG-1.9 Safe Usage of Monetary Valuation on appropriate communication of monetary values.

3.7 Compilation Procedure for Ecosystem Service Indicators

This section describes the step-by-step procedure for compiling ecosystem service indicators from underlying accounts, data sources, and geospatial information. Understanding this workflow is essential for translating source data into policy-relevant indicators and maintaining consistency across the full accounting system.

Step 1: Identify priority ecosystem services and users

The compilation process begins with identifying which ecosystem services are most relevant to the national or subnational ocean accounting area, and which economic units and communities use those services. This scoping step should involve:

• Reviewing the SEEA EA reference list (Table 6.3) and selecting services relevant to the ecosystem types present (see TG-3.2 Flows from Environment to Economy, Table 1a for marine ecosystem services by type)
• Consulting with policy users to identify which services are priorities for management and monitoring
• Mapping ecosystem service users by institutional sector (industries, households, government, rest of world)

For ocean accounting, priority services typically include fish provisioning (used by fisheries industries), coastal protection (used by coastal property owners and government), carbon sequestration (used by the global community), and recreation (used by households).

Step 2: Assemble data sources

Once priority services are identified, compilers assemble the data sources required to measure supply and use in physical terms. Primary data sources include:

• Fisheries statistics from national fisheries agencies and FAO FishStatJ, providing catch data by species, gear type, and fishing zone
• Ecological monitoring data from field surveys measuring carbon stocks, water quality, and condition variables (see TG-4.2 Survey Methods)
• Remote sensing data for extent and condition of blue carbon ecosystems (see TG-4.1 Remote Sensing Data)
• Tourism statistics from visitor surveys at marine protected areas, coastal recreation sites, and diving operators
• Geospatial data on coastal population and assets at risk from flooding and erosion

Data quality should be assessed following TG-0.7 Quality Assurance, with particular attention to temporal consistency and spatial coverage.

Step 3: Compile physical supply table

The physical supply table records the quantity of each ecosystem service supplied by each ecosystem type over the accounting period. For each service:

• Quantify the physical flow in appropriate units (tonnes, cubic metres, visitor-days, etc.)
• Attribute the supply to the ecosystem type(s) that generate the service
• Where services are co-supplied by multiple ecosystem types (e.g., coastal protection by mangroves and coral reefs), allocate the flow using spatial analysis or modelling

The compilation follows the methodology described in TG-3.2 Flows from Environment to Economy, Section 3.3. The resulting supply table provides the basis for flow indicators disaggregated by ecosystem type.

Step 4: Compile physical use table

The use table records which economic units use each ecosystem service. For each service:

• Identify the direct users (industries, households, government, rest of world)
• Quantify the use in the same physical units as the supply table
• Ensure that total use equals total supply for each service (the accounting identity)

For provisioning services, users are typically industries that harvest the resource (fisheries, timber). For regulating services, users may be dispersed (coastal protection benefits property owners; climate regulation benefits the global community). For cultural services, households are typically the primary users.

The use table enables derivation of dependency indicators showing which industries and communities rely on specific ecosystem services.

Step 5: Derive physical flow indicators

From the compiled supply and use tables, derive flow indicators for reporting and analysis:

• Headline flow indicators: Total supply of each priority service, aggregated across all ecosystem types
• Disaggregated flow indicators: Supply by ecosystem type, use by sector
• Intensity indicators: Flow per hectare of ecosystem extent (requires linking to extent accounts from TG-3.1 Asset Accounts)
• Sustainability indicators: Actual flow compared to capacity or sustainable yield

Step 6: Apply monetary valuation (optional)

Where monetary indicators are required, apply valuation methods following the preference order established in TG-1.9 Safe Usage of Monetary Valuation:

• For services with observable market prices (e.g., fish quota values, carbon credits), apply observed prices
• For services embedded in market transactions (e.g., fish provisioning), apply resource rent method
• For services without markets (e.g., coastal protection, water purification), apply replacement cost or avoided damage cost methods
• For recreation, apply travel cost or consumer expenditure methods

For each valuation, document the method, data sources, key assumptions, and uncertainty.

Step 7: Calculate aggregate monetary indicators

From the monetary valuations, derive aggregate indicators:

• Gross Ecosystem Product (GEP): Sum of monetary values of all final ecosystem services
• GEP by service category: Provisioning, regulating, cultural
• GEP by ecosystem type: Marine shelf, pelagic, coastal wetlands, etc.
• Ecosystem service value added: GEP attributed to domestic ecosystem assets (excluding imports of services)

Step 8: Integration with other accounts and policy applications

The final step integrates ecosystem service indicators with other ocean accounts and policy frameworks:

• Cross-check with asset accounts: Ensure that extraction flows (e.g., fish harvest) recorded in service accounts match extraction entries in asset accounts
• Link to EGSS accounts: Compare ecosystem service values with expenditure on environmental protection and resource management
• Support SDG 14 monitoring: Derive indicators for SDG 14.4.1 (proportion of fish stocks within sustainable limits), 14.5.1 (marine protected area coverage, linked to service supply), and 14.7.1 (economic benefits from sustainable ocean resources)
• Inform budget processes: Provide evidence for natural capital budgeting (see TG-1.1 National Ocean Budgets)

3.8 Worked Example: Coastal Ecosystem Service Indicators

This section presents a worked example demonstrating how to compile ecosystem service indicators for a hypothetical coastal area. The example uses synthetic data for three marine ecosystem types (mangroves, seagrass meadows, and coral reefs) and illustrates the compilation procedure described in Section 3.7.

Scenario description

The accounting area is a coastal province encompassing 500 km² of mangrove forest, 200 km² of seagrass meadows, and 150 km² of coral reef systems. The area supports commercial fisheries, coastal aquaculture, and marine tourism. The accounting period is calendar year 2025.

Step 1-2: Priority services and data sources

Through consultation with the provincial environment ministry and fisheries agency, five priority ecosystem services were identified:

Step 3: Physical supply table

Data from field surveys, remote sensing, and modelling were used to quantify the supply of each service by ecosystem type:

Table 4: Physical ecosystem service supply by ecosystem type, 2025

Interpretation: Coral reefs supply the largest share of fish provisioning (1,500 tonnes, 43% of total) and dominate recreation services (45,000 visitor-days, 87% of total). Mangroves supply the majority of carbon sequestration (4,000 tC/yr, 70% of total) and coastal protection (45 km, 45% of total). The three ecosystem types collectively protect 100 km of coastline, purify 200 tonnes of nitrogen annually, and sequester 5,750 tonnes of carbon.

Step 4: Physical use table

Users were identified from fisheries registration data, property cadastre, tourism statistics, and spatial analysis:

Table 5: Physical ecosystem service use by sector, 2025

Interpretation: The fisheries industry uses 2,800 tonnes of fish provisioning services (80% of supply), with aquaculture using the remainder (700 tonnes) as seed stock input. Coastal households benefit from 80 km of coastal protection (80% of supply), with the remaining 20 km protecting aquaculture ponds. All carbon sequestration services are attributed to the rest of the world, reflecting their global public good nature. Water purification benefits both aquaculture (150 tN/yr, 75% of service) and coastal households (50 tN/yr, 25%). Recreation is used primarily by local households (44,000 visitor-days, 85%), with tourism industry organizing 8,000 visitor-days (15%).

Step 5: Physical flow indicators

From the supply and use tables, headline and derived indicators were calculated:

Headline flow indicators:

• Total fish provisioning: 3,500 tonnes
• Total coastal protection: 100 km coastline
• Total carbon sequestration: 5,750 tC/yr
• Total water purification: 200 tN/yr
• Total recreation: 52,000 visitor-days

Intensity indicators (per km² of ecosystem extent):

• Mangroves: 8 tC/yr/km² (carbon); 90 m coastline protected/km²
• Seagrass: 8 tC/yr/km² (carbon); 150 m coastline protected/km²
• Coral reef: 10 tonnes fish/km²; 300 visitor-days/km²

Derived dependency indicators:

• Fisheries industry dependency on ecosystem services: 2,800 tonnes fish harvest (80% of industry catch attributed to ecosystem provisioning)
• Aquaculture dependency: 700 tonnes seed stock + 150 tN water purification inputs
• Coastal household dependency: 80 km coastal protection + 50 tN water quality maintenance + 44,000 recreation visitor-days

Step 6-7: Monetary indicators (illustrative)

For demonstration purposes, monetary values were estimated using the following approaches (see TG-1.9 Safe Usage of Monetary Valuation for method details):

Table 6: Monetary ecosystem service account, 2025

Interpretation: The Gross Ecosystem Product (GEP) for the coastal province is approximately USD 55.3 million in 2025, with coastal protection representing 90% of the total monetary value. This reflects the avoided damage approach, which captures the high value of infrastructure and population at risk in the densely populated coastal zone. Fish provisioning (USD 2.1 million) represents the resource rent accruing to the ecosystem (distinct from the gross value of fish landings, which includes labor and capital inputs). Carbon sequestration has relatively low monetary value (USD 287,500) due to low carbon prices, though the physical quantity (5,750 tC/yr) is substantial. Recreation services (USD 1.3 million) reflect consumer expenditure on marine-based tourism.

Step 8: Policy applications

The compiled indicators supported several policy applications:

Natural capital budgeting: The provincial government incorporated the GEP estimate (USD 55.3 million) into supplementary budget documents, comparing ecosystem service values with the provincial environment budget (USD 3.2 million) and demonstrating a 17:1 benefit-cost ratio for conservation expenditure.

SDG 14 monitoring: The fish provisioning indicator (3,500 tonnes harvest) was compared to the sustainable yield estimate (3,200 tonnes from stock assessment), revealing an exploitation rate of 1.09 (9% overfishing), which was reported under SDG 14.4.1.

Marine spatial planning: The ecosystem service supply data by ecosystem type were used to evaluate alternative coastal development scenarios, quantifying the trade-offs between converting mangrove areas to aquaculture (loss of carbon sequestration and coastal protection) versus maintaining natural ecosystems.

EGSS compilation: Government expenditure on marine protected area management (CEPA 6), fisheries monitoring (CReMA 12), and mangrove restoration (CEPA 4, CReMA 11) totaling USD 3.2 million was classified as ocean-related EGSS output, enabling comparison with the ecosystem service flows those expenditures aim to maintain.

3.9 Summary of Ecosystem Service Measurement Methods

Table 7 provides a summary of measurement methods for key marine ecosystem services, bringing together the physical measurement approaches and monetary valuation methods discussed in the preceding sections. This table is intended as a quick reference for compilers designing indicator programmes for ocean accounts.

Table 7: Ecosystem service measurement methods summary

4. Acknowledgements

This Circular has been approved for public circulation and comment by the GOAP Technical Experts Group in accordance with the Circular Publication Procedure.

Authors: GOAP Secretariat

Reviewers: Jessica Andrews, Kirsten Oleson

5. References