Economic valuation is an important step within the Natural Capital Workflow because it helps quantify how changes in marine ecosystem assets and services may affect people and society. Within the workflow, valuation builds on earlier steps that identify assets, link them to ecosystem services, and assess their condition.
Economic valuation is not intended to replace ecological reasoning or conservation priorities. However, it does increase the chance of the protection and restoration being prioritised above environmentally damaging activities when it comes to decisions about the management of the marine environment. Valuation can make natural capital considerations more visible across planning, policy and offshore development decisions. Economic assessment provides a consistent way to compare the scale of benefits, the consequences of environmental change, and the implications of different management choices. This supports more transparent and balanced decision-making.
The economics page sets the foundation for tools such as the Marine Natural Capital Costings Calculator, which is being developed to support early appraisal of potential impacts and opportunities.
Marine Natural Capital Hub: Workflow
Economics in the Natural Capital Workflow
Economic valuation in marine natural capital assessments relies on clear evidence about how habitats contribute to annual flows of benefits and to stocks such as stored carbon. Economic values depend on earlier workflow steps that define assets, services and condition.
Marine valuation approaches include replacement cost, avoided damage, value transfer, socio-economic cost of carbon storage, assessments of carbon stores. See the below section for definitions.
Primary valuation is preferred, although UK value transfer is often used where ecological and socio-economic conditions are comparable. Values reflect marginal change and are interpreted within the local ecological and spatial context. Marine environments vary, so estimates should not be applied uniformly across broad areas.
Economic approaches draw on guidance described in the UK Green Book and Enabling a Natural Capital Approach supplementary material. These frameworks help quantify how changes in habitat extent, service delivery or condition may affect people and the wider economy. It also supports early appraisal within marine planning and offshore development. Economic approaches provide a consistent basis for exploring benefits and for identifying where additional ecological evidence is needed.
We are developing a Marine Natural Capital Calculator which is outlined in the section below.
How we calculate economic values
- Start with the biophysical change. We quantify changes in extent, condition and pressure exposure using spatial evidence, then link these to service delivery pathways.
- Select a method that matches the ecosystem service and evidence.
- Market and observed values are used where appropriate (for example provisioning services).
- Non‑market approaches are used where benefits are not priced, including:
- Non‑traded carbon values for climate regulation, applied to sequestration as an annual flow and stored carbon as a stock at risk.
- Replacement cost proxies for functions society would otherwise pay for (for example nutrient remediation or sediment stabilisation).
- Avoided damage where habitats reduce losses (for example coastal protection).
- Value transfer where primary valuation is not feasible and suitable evidence exists from comparable contexts, used most often for cultural and recreation values.
- Adjust for condition, not just extent. Where evidence allows, we scale service delivery using condition proxies, so a degraded asset is not assumed to deliver the same benefits as a healthy one. This includes approaches that relate condition classes or thresholds to relative levels of service delivery.
- Bring values onto a consistent time basis when needed. For appraisal and comparison, annual flows can be discounted to present values using standard government discounting conventions, and key uncertainties are explored with sensitivity testing.
JNCCs Marine Natural Capital Costing Calculator
JNCC is developing a Marine Natural Capital Costing Calculator to support the comparative valuation of marine habitats and ecosystem services, with an objective of providing more complete economic evidence to support decision-making at the beginning of the offshore development planning process.
The tool combines ecological evidence with economic valuation to demonstrate how different marine habitats contribute to societal wellbeing. It is being designed to provide indicative values for environmental damage, loss of ecosystem services, and changes in carbon storage. This will help decision makers understand the scale of benefits at risk and support more sustainable offshore spatial planning and management.
The tool draws on value transfer, socio-economic cost of carbon storage, and evidence on carbon stores within UK marine sediments. We make use of UK relevant data sources (such as the ONS Natural Capital Accounts) and established natural capital methodologies.
Users with basic training will be able to input spatial information on habitat extent, condition, and potential pressures from proposed developments. The tool will then generate indicative economic values for changes in service delivery and carbon stocks. The tool will be delivered as a user-friendly interface that can be used by an analyst with basic training, and include functionality for simple scenario testing
The tool is currently in development and will be made available through the Marine Natural Capital Hub once testing and validation are complete.
JNCC Outputs
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Natural Capital Investment Plan – Turks & Caicos (RESEMBID)
“Natural‑capital‑driven finance and investment planning for fisheries, carbon, tourism and cultural values.” -
Natural capital in the UK Overseas Territories
“Valuation, vulnerability mapping and ecosystem‑service assessment across Caribbean and South Atlantic OTs.”
mNCEA Outputs
- ME4501 - A Natural Capital Account for the Industrial Sandeel Fishery (Natural England)
- ME4502 - North Sea carbon, Fishing, Marine Protected Areas and Offshore Wind Farms Trade-offs (Cefas)
- ME4505 - Using the Natural Capital Approach to review the value of English saltmarshes as nursery grounds for commercially important fish. Case study: Sea bass Dicentrarchus labrax (L.) (Cefas and Environment Agency)
- ME4506 - Opportunistic sediment sampling in the North Sea for Blue Carbon to begin to address evidence gaps for carbon stocks and fluxes in UK continental shelf sediments (Cefas)
- ME4507 - Review of the cultural values provided by UK fisheries (mNCEA proof-of-concept) (Natural England)
- ME4510 - Systematic review and SWOT of marine natural capital approaches (mNCEA proof-of-concept) (JNCC)
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