Ecosystems provide the foundation for all human survival, since they produce the food, air, soil, and other material supports for life. Everyone, rich and poor, urban and rural, depends on the goods and services that ecosystems provide.

But the rural poor have a unique and special relationship with ecosystems that revolves around the importance of these natural systems to rural livelihoods. By livelihoods, we mean the whole complex of factors that allow families to sustain themselves materially, emotionally, spiritually, and socially. Central to this is income, whether in the form of cash, or in the form of natural products directly consumed for subsistence, such as fish, fuel, or building materials.

As this chapter will show, the rural poor derive a significant fraction of their total income from ecosystem goods and services. We refer to such nature-based income as environmental income. Because of their dependence on environmental income, the poor are especially vulnerable to ecosystem degradation.

Of course, environmental income is not the only important component in rural livelihoods. A poor family’s total income is generally derived from at least four different sources:

• environmental income (including small-scale agriculture),
• income from wage labor (such as agricultural labor) and home businesses,
• remittances (money or goods sent from relatives outside the community), and
• other transfer payments, such as assistance from state agencies.

All these sources are important, and none can be ignored without losing sight of the reality of the rural economy. However, this chapter’s primary concern is exploring how environmental income fits into rural livelihoods. This includes asking how important it is compared to other types of income, where it comes from, how it is obtained, and what role it plays in the total livelihoods of the poor. Even though this chapter dwells primarily on income, it does so with the cognizance that maximizing income is only one component of a total livelihoods approach to development.