An ecosystem is a complex of interconnected living organisms inhabiting a particular area or unit space, together with their environment and all their interrelationships and relationships with the environment having well-maintained ecological processes and interactions. It is characterized by abundance of individual species populations, interspecies relationships, activity of organisms, physical and chemical characteristics of environment, flows of matter, energy and information, and the changes of these parameters with time. The ecosystem provides various vital benefits for our survival such as food; soil production, erosion and control; climate regulation; water purification; bioenergy, etc. these benefits and services are referred to as ‘Ecosystem services’ and are very crucial for the survival of humans and other organisms on the earth.

The structural and functional components of the ecosystem include physical features (such as water, sediment and soil profile, the gradient of conditions in water body), biotic compositions (like species, number of individuals and their biomass), etc. The ecosystem can be broadly categorized as aquatic and terrestrial ecosystem, on the basis of their major source and sink of nutrient, i.e., water or land. Aquatic ecosystem with rich nutrient contents is substantially different from terrestrial ecosystem. Both these ecosystems are dependent upon each other, as there is an overlap of the functional boundary between the two, irrespective of the physical boundaries. The Terrestrial ecosystem mainly comprises of forests whereas the Aquatic ecosystem can be broadly classified into marine and freshwater ecosystems.

Hassan et al (2005) distributed the ecosystem goods and services into four different categories which were also explained by Fischlin et al (2007) in their report. These categories can be summarized as below:

1. Supporting services – such as primary and secondary production and biodiversity; a resource that is increasingly recognized to sustain many of the goods and services that humans enjoy from the ecosystem.

2. Provisioning services – it includes products i.e., food (including roots, seeds, nuts, fruits, spices, fodder), fibre (including wood, textiles) and medicinal and cosmetic products.

3. Regulating services – which are of immense importance to the human society such as (a) carbon sequestration, (b) climate and water regulation, (c) protection from natural hazards such as floods, avalanches or rock-fall, (d) water and air purification and (e) disease and pest regulation.

4. Cultural services – which satisfy human spiritual and aesthetic appreciation of ecosystems and their components.

  Economic valuation of Ecosystem goods and services: The economic valuation is a tool to aid and improve wise use and management of natural resources by providing a means for measuring and comparing the various benefits of resources. The resources are quantified based on the goods and services made possible by ecosystem’s functions. The economic worth of goods or services, generally measured in terms of what individuals are willing to pay for. The value of the benefit is determined by its price, i.e., the amount of money for which it will be exchanged. The value of a benefit is the price of that product in the open market and the worth of that benefit to a potential buyer. This is measured in economic terms as willingness to pay. In other words, the economic value of the ecosystem services/commodity is measured by people's willingness to pay (WTP) for those benefits (http://wgbis.ces.iisc.ernet.in/energy/water/paper/ecodoc2004.htm). 

Economic valuation is an effective method to understand the significance of ecosystem goods or services provide by nature. The strength of the economic valuation methods is that their concept of value incorporates the relationship between humankind and ecosystem products (Winkler, 2006).

The most comprehensive study for economic valuation of ecosystem goods and services is by Costanza et al (1997) where they estimated the current economic values for 17 different ecosystem services for 16 different biomes based on earlier published studies and some original calculations. They classified the world ecosystems into two major classes namely Marine ecosystems (including estuaries, seagrass/algae beds, coral reefs, and shelf systems) and terrestrial ecosystems (including two types of forest (tropical and temperate/boreal), grasslands/rangelands, wetlands, lakes/rivers, desert, tundra, ice/rock, cropland, and urban). Their study estimated that the annual value of the ecosystem services of the terrestrial and aquatic biomes of the world was in the range of US$16–54 trillion with an estimated average of US$33 trillion. This value was found to be 1.8 times higher than the current gross national product (GNP) value for the world. About 63% of the estimated values of ecosystem services was found to be contributed by the marine ecosystems while about 38% of the estimated values was found to be contributed by the terrestrial ecosystems, mainly from the forests and wetlands.

De Groot et al., (2002) have given an integrated framework (Figure 1) for assessing the ecosystem goods and services. According to this framework, the ecosystem which involves complex structures and processes can be divided into a limited number of ecosystem functions which, in turn provide the goods and services that are valued by humans. The ecosystem functions can be broadly classified into four different functions namely – Regulation, Production, Habitat and Information. The value of the ecosystem functions, goods and services can be roughly divided into three types – ecological, socio-cultural and economic values.

1. Ecological value - The capacity of ecosystems to provide goods and services depends on the related ecosystem processes and components providing them and the limits of sustainable use are determined by ecological criteria such as integrity, resilience, and resistance (De Groot et al., 2002). The ‘Ecological Value’ or importance of a given ecosystem is, therefore, determined both by the integrity of the Regulation and Habitat Functions of the ecosystem and by ecosystem parameters such as complexity, diversity, and rarity (De Groot et al., 2000).

2. Socio-Cultural value - In addition to ecological criteria, social values and perceptions play an important role in determining the importance of natural ecosystems, and their functions, to human society (De Groot et al., 2002). In a report by English Nature (1994), social reasons are mentioned as playing an important role in identifying important environmental functions, emphasizing physical and mental health, education, cultural diversity and identity (heritage value), freedom and spiritual values.

3. Economic value - Economic value can be defined as the most that a person is willing to give up in other goods and services in order to obtain a good, service, or state of the world. In a market economy, money is a universally accepted measure of economic value, because the amount that someone is willing to pay for something tells how much of all other goods and services they are willing to give up to get that item. Thus their willingness to pay reflects the economic value (Turpie et al., 2010; Ramachandra and Rajanikanth, 2003).

Figure 1: Assessment of ecosystem goods and services

TERRESTRIAL ECOSYSTEM

Terrestrial ecosystem includes living organisms at the level of individual, population and community, interacting with the surrounding environment on land. The terrestrial ecosystems are also referred to as biomes, to indicate a large geographical region having a definite climate pattern, to which the plants show a similar physiological adaptation. Among the terrestrial biomes, forests occupy nearly 27% of the land surface, which was about 50% of the earth’s surface prior to the development of civilizations (FAO, 1993). Similar is in the case of Western Ghats of India, a Biodiversity Hotspot of the World, wherein the forest cover is less than one third of its total geographic area(1,60,000 km2) and the tropical forest cover in the region occupies about 9% (15,000 km²).

The forests are most important natural resources and have been of great importance to human beings since prehistoric days. The forests function as major terrestrial interface between the atmosphere and earth. Forests contain a vast amount of earth’s biodiversity and its terrestrial carbon stores. In addition, they are recognized as major buffers to climate change because they can absorb energy efficiently and dissipate a large fraction of heat in the evaporation of water. They are also an important source of raw materials, food and other services for human population and hence, we are largely dependent on it. Besides this, the forests serve as the centers of rich biodiversity and repository of genetic wealth providing excellent opportunities for research activities and eco-tourism. They are also key players in environment purification as they contribute largely in carbon sequestration. They are economically, ecologically and socially important to us in many ways.  However, due to increasing burden of population on forests, they have suffered large scale destructions in past many years and their area has also decreased considerably. This has created a debate and concern all over the world about its protection and conservation.

Approximately 1/3rd of earth’s total area is covered by the forests. According to the recent forest report, the forest cover in India is 20.5% of the total geographic area. The total forest cover area in India is 675538 sq.km. Out of total forest cover, 12.67% is dense forest cover, 7.88% is open forest cover, 1.4% is scrub lands and 0.14% is mangroves. In Karnataka the total forest cover area is 36991 sq.km. which forms about 19.3% of total geographical area of the state. Out of the total recorded forest area in the state, 73.88% is categorized as Reserve forests, 10.15% is protected forests and remaining 15.97% is unclassed forest area. In terms of ‘percentage of recorded forest area’ to the total geographic area, Karnataka ranks 18th in the country (State of Forest Report, 2001, FSI, MoEF, GOI).

The forests have various protective, productive, regulative and accessory functions. They generate a large variety of goods and services which are beneficial to the mankind. The economic valuation of these services is related to the individual’s willingness to pay for these services. However, the willingness to pay is determined by various motivations which may range from self-interest to concern for future generations and concern for environment and other living beings. These values can be classified as

1. Goods:  Direct usage of services - consumptive and non-consumptive usage, e.g. timber, fuel wood, tourism;
2. Services: Indirect usage - watersheds, groundwater recharge, oxygen production, carbon storage, etc.

However, the economic valuation of loss of forests is hampered by following constraints:

DIRECT COSTS

1. Standing trees are valued at their present market value. Since, there is a marked prize-size relationship, young trees are undervalued;
2. Value of climber, creepers and medicinal plants is overlooked;
3. Price of forest land is not taken into account; and
4. Compensatory afforestation costs are misleading because a mixed forest cannot always be created within a 50 year accounting period.

INDIRECT COSTS

1. Intangible costs and benefits are difficult to quantify;
2. Undervaluation of goods consumed by poor are undervalued;
3. Cost of extinction of species are disregarded;
4. Costs of disregarding habitat carrying capacity are not taken into account.

Manoharan (2000) had suggested the following economic values of various kinds of forest land in India, after accounting for selected tangible and intangible benefits (Table-1).

Table 1: Economic values of various kinds of forest land in India

Sr. No.	Nature of forest land	Selected economic benefit	Value of annual flow of goods & services per hectare (Rs.)		Present value of goods & services per hectare (Rs.)
			Mini.	Max.	Mini.	Max.
1.	Plantation/Single species forest (teak, sal forests, etc.) (Crown density < 40%)	Timber	2701	9270	33660	115525
2.	Multi-species plantation/open forests (Crown density 10-40%)	Timber + NTFP	3239	12227	40365	152375
3.	Dense forests (Crown density > 40%)	NTFP + Ecological functions + carbon store	21287	322957	265283	4024758
4.	Protected Areas	Eco tourism + ecological functions + carbon store	21425	340444	267003	4242685

The various goods and services provided by the forests and their economic importance can be discussed as below:

WOOD RESOURCE FROM FORESTS:

The forest trees play the most important role in all the functions of forests. The trees are felled on a large scale for using their wood as timber and firewood. The wood of the trees in forests is very hard, strong, durable and hence, many species of trees are preferred for their wood as it is used as timber wood. Broadly two types of timber uses are distinguished - commercial and non-commercial. World industrial roundwood production expanded substantially between 1960 and 1990 from some 1 billion m³ to 1.6 billion m³ but has since fallen back to some 1.5 billion m³ in the late 1990s (Barbier et al, 1994; FAO, 2000). Since the timber is marketed, its valuation is easy to derive. The timber wood is mainly used for construction of houses, doors, windows, planks, boats, furniture, railway sleepers, carriages, carts, cabinets, etc. Trees like Tectona grandis (Teak), Shorea robusta (Sal),  Mangifera indica (Mango),  Cedrus deodara (Deodar),  Swietena mahogany (Mahogany),  Dalbergia sisoo (Shisham), Azadirachta indica (Neem) and many other trees are have lot of economic importance because of the various uses of their wood.

The rural people and the tribal people are also mainly dependent upon the wood obtained from forests as a source of fuel. They collect the firewood from the forests and burn it to cook food, heating water, providing light and heat, prepare charcoal, etc. FAO (2000) statistics suggest that some 1.86 billion m³ of wood is extracted from forests for fuel wood and conversion to charcoal. The use of wood as fuel is a very old practice and almost dates back to establishment of the civilizations. Though this practice has almost died down in urban civilizations, but for people living in villages and rural areas, firewood is most easy, cheap and readily available source of energy. The benefits of using wood fuel are that it does not cause pollution and the left over wood ash can be used as fertilizer in fields. The practice of making charcoal from burning firewood and selling it in markets is also an important livelihood of rural people. The local values of fuel wood and charcoal can be highly important in terms of local economy.

NON-TIMBER FOREST PRODUCTS (NTFP):

Though the forests serve as a storehouse of wood used for various purposes, but there are also equally important non-wood products that are obtained from the forests. The botanical and other natural products, other than timber extracted from the forest system are referred to as Non-Timber Forest Products (NTFPs). These are also referred as all the resources/products that may be extracted from forest ecosystem and are utilized within the household or are marketed or have social, cultural or religious significance (FAO, 1990). These include plants and plant materials used for food, fuel, storage and fodder, medicine, cottage and wrapping materials, biochemical, as well as animals, birds, reptiles and fishes, for food and feather. Unlike timber-based products, these products come from variety of sources like: fruits and vegetables to eat, leaves and twigs for decoration, flowers for various purposes, herbal medicines from different plant parts, wood carvings and decorations, etc. People have been using NTFPs since many years and it forms an important part of local and regional economics. The values of NTFPs per hectare when calculated might not be very high, but these products are of critical importance as source of income and employment for rural people living around the forest regions, especially when crop growing season is not there. The United Nations Food and Agriculture Organization has claimed that at least 150 non-timber product are found in the International Markets. The NTFPs can be broadly classified into following types:

• EDIBLES - The fruits, nuts and berries collected from various plants are eaten widely. Fruit of Artocarpus heterophyllus is cooked as food while fruits of Emblica officinalis are used as pickles. Wild herbs and spices are also used in various food items. The mushrooms which have a large diversity form an important and integral part of edible items obtained from the forests. They are a rich source of protein and have also been found to possess health benefits. Ecosystem people collect many different wild mushrooms from the forests and use it as edible items.

• MEDICINAL PRODUCTS - Plants have been exploited on a large scale for their medicinal properties since ages. The early humans were totally dependent upon the plants for healing and curing of various disorders. Today also in villages and other rural areas around the forests, the plants growing in forests serve as medicines. Every village has a ‘Vaid’ or a Herbal Practitioner who has knowledge of regional medicinal plants and treats the patients. The production of herbal drugs has also increased manifold in last few years. Many ethno medicinal studies have proved the importance of medicinal plants present in forests and now these plants have been explored and exploited for preparation of various medicines. The herbal drug is a multi-million industry and is totally dependent upon the plants obtained in forests for their medicinal benefits. Medicinal plants like Adhatoda vasica, Ficus religiosa, Emblica officinalis, Vitex negundo, Terminalia chebula, Rawolfia serpentina, Asparagus racemosus, Acorus calamus, etc. are widely used as ethno medicine by various tribes and rural people across different parts of Western Ghats.

•  ANIMAL PRODUCTS - A large amount of honey is also extracted from forests by rural people from honeybees in the forests and it is sold in the market too. Honey is one of most important NTFP consumed by rural and urban people and is of great economic value. It has lots of medicinal values as well as is used in preparation of variety of food items. Besides this, many insects are also collected from forests and used as food delicacies. The collection of Lac from Lac insects is also an important NTFP and has a good price in the market. The skin of some animals is used for leather and fur. Some wild animals are also domesticated as pets like wild dogs and cats. The silkworms are collected for obtaining silk which is a highly priced NTFP in the market. The earthworms are used as bait for catching fishes and also used in agricultural fields. Lot of fishes are obtained from rivers in forests which are eaten as food and also used for obtaining some oil, making delicacies like pickles and sold in market.

• MISCELLANOUS - The wild flowers are used for decorations and some of them are offered to the Gods. The ferns are also of great ornamental importance and are cultivated for their beautiful appearance. The wood is used to make beautiful carvings and decorations and sold in market. The fibers obtained from bamboo, wild jute, coconut are used for stuffing things, preparing baskets, covering rooftops, etc. The dyes are also obtained from various plants e.g. orange colored dye is obtained from Butea monosperma and blue colored dye is obtained from  Indigofera sp. Gums and resins are also obtained from bark of some trees, which are sold in markets. Research has also proved that many plants in the forests have potential of producing hydrocarbons and biodiesel which can be used as substitute for fossil fuels. Many plants are also used in rites, rituals and magico-beliefs while many animals and trees are also worshipped.

• ECOTOURISM AND RECREATIONAL VALUES OF FORESTS - The Ecotourism is a much growing and popular activity and is a potential valuable usage of forests without extracting anything from it. However, care should be taken that such tourism activities are sustainable and do not harm the ecological carrying capacities of the forests. The ecotourism is also economically very useful to the local people living in and around the forest areas as they can gain net profit by participating and assisting in such activities. The ecotourism also is a source of profit for tour organizers who do not live near the forests and yet earn lots of money from it. The forest department also gets good amount of revenue from this to maintain and upkeep the forests and wildlife in proper shape. However, the values of ecotourism vary from place to place and the extent of attraction in the forests.  

• BIODIVERSITY: The forests of the world harbour very large and complex biological species diversity and hence, it becomes a complex thing to assign a specific definition or explanation for it. The species diversity is an indicator for biological diversity and the species richness increases as we move from the poles to the equatorial region. The tropical forests are the richest source of biodiversity and are probably thought of containing more than half of world’s biodiversity. However, there is a confusion between the values of biological resources and values of biodiversity. The values of biodiversity refer to values of the information and insurance. The existing species are results of long evolution processes that have been occurring over several billion years. Since these evolutionary processes have occurred in different environmental conditions, the existing species contains a significant stock of information related to these processes and environment. There also occur interactions between different species in nature. The information stored by this diversity can be used develop goods and services for benefit of mankind. However, only a part of valuable information is known and there is a lot of potential still left in forests to harness more valuable information.

• ENVIRONMENTAL AND ECOLOGICAL IMPORTANCE OF FORESTS: Many studies have suggested enormous potential function of forests to store carbon. However, there is also distinguishing between the carbon stored in a standing forest and carbon sequestered in a growing forest. The former case has a high economic value associated with it and is greatly affected if the forests get burned or are cleared for some purpose. The forests which are preserved and not under threat have carbon storage values but are often not realized, while if a forest which is under some kind of threat in coming future, its carbon storage value can be realized through protective measures. However, when forest land conversion takes place, the entire carbon storage values are lost. A number of studies have been taken place and are going on to record the carbon stored and sequestered in different types of forests. Today, immense potential can be observed for development of carbon trading markets in view of increasing climate change and this would be having a great economic significance.

One more important role of the forest trees is soil binding and prevention of soil erosion. The roots of the trees bind the soil together by great force and prevent it from running - off in conditions of high rains. The roots of trees are also a preferred place for living of many important fungi and bacteria. These microbes benefit the trees as well as enrich the soil by their degradation activities. The leaves and twigs of plants and trees when they detach and fall on the ground, the micro flora of soil starts degrading it and converts it into humus which enriches the forest soil. This humus provides nutrition for germinating plants and serves as substratum for mushrooms and ferns and also give shelter to large number of insects. Forests are also the houses of large number of insects, animals, birds and plants ranging from cryptogams to angiosperms.  The forests also play a key role in hydrological functions and water cycle. Large amount of trees ensures higher transpiration rates and greater aerodynamic roughness of forests compared to agriculture and pasture lands ensures increased humidity and moisture convergence leading to increased probabilities of cloud formation and rainfall generation (André et.al., 1989).  Forests have both tangible and intangible effects which should be covered in any kind of impact assessment. But, it is not easy to assign economic values to intangible effects. There have also been some attempts to quantify and evaluate the environmental costs of loss of forests. The notional values assigned to some parameters contributing to ecological balance (Das, 1980) are given in the Table 2.

Table 2: Environmental benefits derived from a medium sized tree of 50 tonnes during its 50 years life span, excluding values of timber, fruit and flowers

		Single tree	FOREST	TYPE
Sr.No		Rs. (Lakh)	Tropical Rs/ha (lakh)	Sub-tropical Rs/ha (lakh)
1.	Oxygen production	2.50	22.50	20.50
2.	Conservation of Animal protein	0.20	1.80	1.64
3.	Control of soil erosion	2.50	22.50	20.50
4.	Recycling of water and control of humidity	3.00	27.00	24.60
5.	Shelter for birds, squirrels, insects, plants	2.50	22.50	20.50
6.	Control of air pollution	5.00	45.00	41.00
	Total	15.70	141.30	128.74

NTFPs collection in Uttara Kannada district - About 80% of the Uttara Kannada district is forested and harbors a very rich diversity of flora and fauna. Many local people and tribals in the region are dependent upon the collection of NTFPs and their selling as an important source of income. They also make use of many plant species as traditional medicines. Some studies have been carried out to document the NTFPs collected from Uttara Kannada district and the people dependent upon it.

Bhat et al (2003) monitored the yield and its attributes of sixteen non-timber forest product species for three years in the Western Ghats part of Uttara Kannada district in Karnataka and found that in most species, the yield between two consecutive years was significantly different. There was also a significant difference in fruit number between years, indicating that most tropical tree species exhibit supra-annual cycle of reproduction. They also found that the coefficients among the yield attributes were consistent; however the correlation with yield was highly variable, indicating that annual variations may be because of the environmental attributes that influence yield.

Murthy et al (2005) carried out the inventorisation and estimation of the quantity of the NTFPs collected by the locals and forest department and also calculated the income derived from NTFP gathering. A questionnaire based survey was carried out in 21 villages engaged in NTFP collection from four different forest zones in the district viz. evergreen, semi-evergreen, moist deciduous and dry deciduous. They found that the NTFPs were collected from 59 different plant species in the evergreen forests, 40 different plant species in the semi-evergreen forests, 12 different plant species in moist deciduous and 15 different plant species in dry deciduous forests. They also found that 42–80 NTFP species of medicinal importance are marketed in herbal shops of Sirsi and Kumta in Uttara Kannada district. The financial estimation of NTFPs gathered in different households from different forest zones revealed that the financial value realized per household was Rs 3445 in the evergreen zone and Rs 3080 in the moist deciduous zone, while in the semi-evergreen and dry deciduous zones, an income of Rs 1438 and Rs 1233 was realized respectively.

Bharath Kumar (2010) studied the impact of non-timber forest products on Siddi’s tribal economy in Uttara Kannada district by employing multistage random sampling in four ranges of forest in Yellapur forest division in Uttara Kannada district. The results highlighted that the Siddi tribal people derived significant income and employment from collection of NTFPs with the men being dominant in the collection and  marketing of NTFPs while the women being dominant in the processing activities. It was suggested that the development of agriculture as an economic occupation and providing the households with more wage employment opportunities would increase the household income and reduce the pressure on NTFPs.

SR. NO.	TYPE OF PRODUCE	PLANTS THAT YIELD PRODUCE	REMARKS
1.	Leaves	Cinnamomum sp. (Dalchini), Butea monosperma (Phalas), Corypha umbraculifera (Talipot Palm), Diospyros melanoxylon (Bidi leaves)	Found in Natural forests
2.	Gums, Resins	Lannea coromandelica, Pterocarpus marsupium, Canarium strictum, Vateria indica, Hopea odorata, Ailanthus malabaricum, Dipterocarpus spp., Kingiodendron pinnatum, Garcinia Morelia	Found in Natural Forests
3.	Oil seeds	Pongamia glabra (Karanj, Honge), Madhuca indica (Mohua), Mangifera indica (Mango), Calophylum inophylum	Found in wild as well as is cultivated
4.	Essential oils	Lemon grass, Citronella grass, Palm rosagrass (leaf grass), Khus grass (roots), Eucalyptus citriodora (leaves), Mammea spp. (Flower buds)	Grasses are cultivated by farmers
5.	Fibres and flosses	Bombax malabarica (Semal, Buruga), Ceiba pentandra (Kapok), Sterculia villosa, Agave sp., Ananas comosus	Ananas and Agave are cultivated
6.	Drugs and Spices	Myristica fragrans, M. malabarica, Zanthoxylum ovalifolium (Ara madala), Zanthoxylum rhetsa, Mesua ferrea (Nagkesar), Cinnamomum spp. (fruits and bark), Piper nigrum, P. longum, Asparagus racemosus, Artemisia sp., Rauvolfia serpentine, Salacia chinensis, Caesearia esculenta, Gymnema sylvestre, Apama siliquosa, Terminalia bellerica, T. chebula, Phyllanthus emblica, Phyllanthus niruri, Centella asiatica, Coleus spp.	Almost all from natural forests except Piper nigrum, Artemisia spp., Coleus and Myristics fragrans
7.	Edible produces	Garcinia indica (Kokam), Garcinia gummigutta (Upage, Punarpulli), Artocarpus lakoocha (Wate), Carissa caranda (Kavalikai), Mangifera indica, Zizyphus spp. (wild ber), Eugenia jambolana, Young bamboo culms, edible mushrooms, many other plants	Partly cultivated and partly from natural forests
8.	Binder “Gigatu” in perfumery industries	Persea macrantha (= Machilus macrantha)
9.	Detergents	Acacia concinna (Shikakai), Sapindus laurifolius (Soapnut)	Partly cultivated
10.	Animal products	Honey and Wax	Mainly collected from forests

AQUATIC ECOSYSTEMS

The Aquatic ecosystems consist of groups of interacting organisms dependent on one another in the aquatic or water environment for nutrients and shelter. Aquatic ecosystems are broadly classified into marine ecosystems (oceans, seas, estuaries, mangroves, etc.) and freshwater ecosystems (rivers, ponds, streams, puddles, etc.). Life forms in an aquatic ecosystem usually contain a wide variety of ecosystems usually contain a wide variety of organisms including bacteria, protozoan, fungi; bottom dwelling organisms such as insects, larvae, snails; large plants such as grasses and reeds; and also fish, amphibians, reptiles, birds and mammals. The assemblages of these organisms vary across ecosystems because of diverse habitat and environmental conditions in each ecosystem that tend to affect species distribution.

Aquatic ecosystems contribute to a substantial proportion of the planet’s biotic productivity as about 30% of the world’s primary productivity comes from autotrophs like phytoplankton to large plants, which are self-synthesizers of food materials from solar energy present in the oceans and rivers. Aquatic ecosystems are essential contributors to the diversity and productivity of biosphere, which are incredibly diverse and provide goods and services to the human civilization and welfare. To human welfare, the aquatic ecosystem provides major services like water supply for drinking, cooking, washing, other household uses, power generation, other industrial uses, irrigation (agriculture), parks, aquaculture, supply of goods other than water such as fish, waterfowl, mussels, shellfish, crayfish, timber products and non-extractive benefits include biodiversity, flood control, transportation, recreational, swimming, boating, maintaining ecosystem quality, bird and wildlife habitat and enhanced property values.  

Wetlands: Wetlands are among the most important ecosystems that are valuable as sources, sinks, and transformers of a multitude of chemical, biological, and genetic materials. The interaction of man with wetlands is the first humanizing system initiated in the process of evolution and development of many civilizations. Societies have enjoyed an ancient association with wetlands and have learned to obtain multiple benefits- natural resources, amenities and environmental services. They are also among the world’s most productive environments and serve as cradles of biological diversity, providing water and primary productivity upon which a large number of animals and plants depend for their successful survival. In spite of the high importance and much legislation for their protection, they have been degraded largely due to negligence of the authorities and people and continue to be threatened. Hence, Economic valuation helps to compare the real costs and benefits of ecosystem use and degradation, and allows more balanced decision-making regarding the protection and restoration versus degradation of wetlands (Turpie et al, 2010).

The main types of ecosystem goods, services and attributes that would be associated with aquatic ecosystems can be described as below:

Table 3: Types of services provided by inland wetlands, based on Costanza et al., 1997 and the Millennium Assessment (2003)

Types of Services		Description
Provisioning Services	Water	Provision of water for livestock or domestic use
	Food, medicines	Production of wild foods and medicines
	Grazing	Production of grazing for livestock
	Raw materials	Production of fuel, craftwork materials, construction materials
	Genetic resources	Medicine, products for materials science, genes for resistance to plant pathogens and crop pests, ornamental species
Regulating Services	Climate regulation	Carbon sequestration.  Wetlands are believed by some to be carbon sinks that contribute towards reducing carbon emissions
	Water regulation	Flood attenuation – Reduction of the amplitude and velocity of flood waters by wetlands, reducing downstream damage
		Groundwater recharge – Differential recharge to groundwater relative to surrounding vegetation types
		Dry season flows – Moderating the seasonality of downstream
	Sediment retention	Retention of soil and fertility within an ecosystem
	Waste treatment	Breaking down of waste, detoxifying pollution; dilution and transport of pollutants
	Regulation of pests and pathogens	Change in ecosystem health affects the abundance or prevalence of malaria, bilharzia, liver fluke, black fly, invasive plants, etc.
	Refugia	Critical breeding, feeding or watering habitat for populations that are utilised elsewhere.
Cultural Services	Abundance, rarity and beauty of species, habitats and landscapes	Providing opportunities for : Cultural activities and heritage; Spiritual and religious activities and wellbeing; Social interaction; Recreational use and enjoyment; and Research and education.

Riverine Ecosystems: The freshwater covers only 2.7% of the Earth’s surface, of which 66% by volume is in snow and ice, 29% in groundwater, 2.5% in lakes and rivers and less than 0.001% in reservoirs (Shiklomanov 1999). Rivers therefore cover a very small part of the Earth, yet they are intricately linked to the vast area of the planet that lies within river basins, as well as the coastal and near-shore marine ecosystems that are dependent on freshwater inputs (Bergkamp et al, 2000). They are the central elements in many landscapes and are important natural corridors for the flows of energy, matter and species (Malanson, 1993). Asian Rivers and associated wetlands were one of the cradles of human civilization and have played a crucial role in determining the social, economic and political situation of the people ever since the humans appeared 500,000 years ago in the Asian mainland (Subramanian, 2006). Since ages, people residing in all the regions depend upon the rivers and associated wetlands for their water requirements ranging from drinking and other household purposes to recreation.

The river related ecosystems encompass all the biotic and abiotic components of the environment linked to that river including not only the aquatic habitats associated with water in the river channel, but all the all the elements of the river catchment that contribute water, nutrients and other inputs to the river (Bergkamp et al, 2000). Many fresh water ecosystems have direct and indirect economic importance and the entire communities depend upon the functions provided by the fresh water ecosystems. A first attempt to synthesize existing knowledge on the monetary benefits of the services of ecosystems on a global scale was published in 1997 (Costanza et al. 1997).

Table 4: Global monetary values of freshwater and wetland functions (in US$ billion, 1994). (Functions based on de Groot 1997; values based on Costanza et al. 1997)

Ecosystem functions (goods & services)	Active or direct use values (mainly market prices)	Passive or indirect use values (mainly shadow price)	Per cent of Global Total (for a particular function)
REGULATION FUNCTIONS
Climate regulation & biogeochemical cycling (e.g. CO2)	?	44	3 %
Water buffering (e.g. flood prevention)	?	350(a)	40 %
Waste treatment	?	5,300	31 %
Biological control	?	14	3 %
HABITAT FUNCTIONS
Refugium function	?	(c)	(c)
Nursery function	62	62(a)	100 %
PRODUCTION FUNCTIONS
Water	840	840(a)	99 %
Food (mainly fish)	186	(b)	13 %
Raw materials & energy	40	(b)	6 %
Genetic material & medicines	(d)	(d)	(d)
INFORMATION FUNCTIONS
Aesthetic information (e.g. views)	?	5	2 %
Recreation and tourism	304	(b)	37 %
Cultural values (e.g. art, science)	(d)	(d)	(d)
Total (in US$ billion/year)	1,782	+          6,905	Average 26%

Notes:

1. The total value of the flood prevention, nursery function and water supply given in Costanza et al. (1997) was based on a combination of market and shadow prices. For simplicity, it has been estimated that 50% of the calculated value is included in market prices.
2. The values given for food, raw materials and tourism are based only on market prices. However, these resources also have an unknown (direct) consumptive use value (many people depend on freshwater systems for these resources directly, without market intervention).
3. In addition to active and passive use values, many ecosystem functions have so-called non-use or intrinsic value. In this study it is not attempted to place a monetary value on the intrinsic importance of nature but it could, in part, be derived from the money people are willing to spend to maintain the refugium function of natural ecosystems.
4. Freshwater and wetland systems are important sources of genetic material, medicines and cultural values but little or no information is available on the monetary value of these ecosystem functions.

This analysis shows that, world-wide, freshwater and wetland systems account for approximately 26% of the total economic value of all ecosystem services and it can be concluded that still only about 20% (US$ 1,782 billion) of the economic value of coastal and freshwater systems is accounted for in market pricing mechanisms (Bergkamp et al, 2000).

Economic valuation of Gundia river basin: Gundia river basin is situated along the narrow belt of evergreen and semi-evergreen climax and potentially related forests which are of two categories as per Pascal et al (1982) - Dipterocarpus indicus – Kingiodendron pinnatum- Humboldia brunonis type of low elevation (0-850 m elevation) and Mesua ferrea – Palacuim ellipticum type of medium elevation (650-1400 m). The Gundia basin is also rich in cardamom cultivation. This cash crop fetches high returns while also preserving the forests and watershed. Both small and big farmers of Gundia basin are engaged in cardamom cultivation, the dried fruit per kilogram fetches almost around Rs.1500/- The coffee estates, both small and big, like rest of central Western Ghats, constitute a major activity in the focal region.

The heavy rainfall exceeding 5000 mm in most places favor the growth of tropical evergreen forests. As the region is suitable for cash crops and rice much lands have been brought under them after clearing forests partially or entirely, the latter for especially rice and ginger. Partial clearances are for cardamom and coffee which are the most important crops in the basin. On the contrary, interspersed and dominating the landscape are tall evergreen trees in large patches as in Bisle Ghat, Kaginahare forest, Mallalli waterfalls gorge, Yethinahole forest etc.  The reed Ochlandra scriptora is common along the streams and river banks. It, along with Caryota urens form important fodder for elephants. The grasslands are widespread in the region and supports rich fauna of grazing animals. They constitute major grazing resources for the local livestock.

Considering the tangible and intangible benefits derived from fifty year old forests, based on the vales in Table - 2, value of eco-services provided by the forests in Gundia river basin works out to be 195 billion Rs./year (with food and water security) while aiding the livelihood of ecosystem people.

Coastal Ecosystem – Coastal and marine ecosystems are among the most diverse and productive systems in the world and are constituted by mosaic of natural ecosystems like mangroves, lagoons, rocks, sea-grass bed, estuaries & marsh, coral reefs etc. An estuary is a partially enclosed body of water where the rivers meet sea and the salinity is intermediary to that of marine and fresh water. This makes the estuarine ecosystems unique in their ecological and biological functions (Anoop and Sooryaprakash, 2008). Forming a dynamic zone of convergence between land and sea, the coastal regions of the earth serve as unique geological, ecological and biological domains of vital importance to a vast array of terrestrial and aquatic life (Wilson et al., 2005). Estuaries are one of the major specialized ecosystems where organic matter is built up in large quantities and offers ideal biotic conditions to sustain considerable aquatic population (Rao and Suresh, 2001). Estuaries and surrounding areas are transitory places where the landscapes change from land to sea and water quality from fresh to salty. Although influenced by the tides estuaries are protected from the ocean waves, winds and storms by reefs , barrier islands and land, mud or sand that define an estuaries seaward boundary (Madhyastha et al., 2002). More than 200 rivers are seen flowing towards the west coast of India and evolve as estuaries before joining the Arabian Sea (Ansari, 1977).

Estuaries and inlets serve as places of relative shelter that also provided staging areas for harvesting food and fibre (Wilson et al., 2005). Estuaries provide an array of natural resource entitlements to rural communities and supply a variety of living and non-living resources, which offer opportunities for employment, income, amenities and pleasure to the local people (Thomson, 2003). Fishing is one of the major economic activities of the rural coastal communities (Thomson, 2003; Anoop and Sooryaprakash, 2008). Apart from these direct tangible flows of economic benefits, estuaries also provide a variety of indirect services to local communities and to the rest of the world which enhance the economic significance of these systems manifold. The capacity of estuaries to regulate various gases, climate, water currents and flow, soil erosion and sedimentation, retention and soil formation, nutrient cycling, waste treatment, pollination and thereby control the various biological processes is well recognized. Moreover, estuaries supply various kinds of recreation services and act as the primary pool of genetic resources. In fact, these diverse ecosystem functions along with the direct flow of benefits through the supply of various goods and services make these systems valuable to humanity. These services are enjoyed by human users almost free of cost or at a price much below the cost of acquiring alternate but similar services (Thomson, 2003; Anzari, 1977).

Thomson (2003) conducted detailed socio-economic surveys for valuation of various direct, indirect and non-use values of Kali estuary in Karnataka and Cochin estuary in Kerala. Various activities in the estuaries like fishing, wetland agriculture, prawn filtration, aquaculture, sand mining, navigation and ferry services, etc. were valued by market valuation methods whereas indirect use values of estuaries were estimated using travel cost methodology and the non-use economic values of estuaries were estimated using contingent valuation methods. The results revealed that 469 households were found to be engaged in gazani paddy cultivation in Kali estuary and generated an average annual income of Rs. 12,216,491 while in the case of Cochin estuary the income generated from Pokkary paddy cultivation was Rs. 5, 83, 97,238. The gross value generated by fishing activities in Cochin estuary was Rs. 6357.4 lakhs while the value generated in Kali estuary was Rs. 271.8 lakhs. Sand mining was found to be a popular activity in Kali estuary and it generated an average economic value of Rs. 276.37 lakhs. The clam fishery and lime shell collection is a live activity in Cochin and Kali estuary and generated a value of Rs. 176 lakhs and Rs. 39.87 lakhs respectively. The aquaculture was also a major economic activity in both the estuaries generating a total value of Rs. 17339.281 lakhs in Cochin estuary and Rs. 420.65 lakhs in Kali estuary. The aggregate value of Cochin estuary from the traditional, modern, recreational and non-use values was found to be Rs. 44380 lakhs while the aggregate value of Kali estuary from the traditional and modern activities was found to be Rs. 1163.56 lakhs.

The Aghanashini estuary lies in the Uttara Kannada district of Karnataka between 14.391° to 14.585° N and long. 74.304° to 74.516° E. Boominathan et al (2008) documented the diversity and distribution of edible bivalve species and carried out a questionnaire based survey in the households of bivalve collecting villages in the nearby areas. They quantified the bivalve collection per person per day and estimated the expenditure incurred in collection and value obtained from it.

Figure 1: Spatial distribution of clams, mussels and oysters in Aghanashini estuary

Bivalve collectors collect eight different species of edible bivalves and the edible bivalves were popularly categorized into clams, mussels and oysters. Estimates show that 2,347 individuals from 1,202 households were associated with bivalve harvesting; of which 1,738 were men and 609 were women, who belonged to 19 estuarine villages and 1,202 families. The Bivalve harvested in this estuary was estimated to be 22,006 t/yr, which generated a total primary annual net income of about Rs. 57.8 million (Rs. 57,018,710 from bivalve collection and Rs. 816,267 from supplementary products like empty shells and dried meat). The Aghanashini village, which accounted for the highest production of bivalves alone earned about Rs. 33 million (58% of total income). The average income for the male was Rs. 29,129 from 140 collection days for the study year 2006-07, whereas it was Rs. 10,497 for the female from 147 collection days.

Parts of the estuary were leased out for the mining of empty shells, which were used by various industries for the production of poultry-feed, lime, fertilisers, etc. The annual production of shells was found to be around 80, 000 to 100,000 t and the market price ranges from Rs. 750 to 950/t. About 186 ha of the estuary was estimated to be used for bivalve harvesting. Therefore, the average annual income per year for every hectare of bivalve harvesting area can be put at Rs. 306,552.

Table 5: Village, season and gender wise income per year from bivalve collection

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