In this study, we examined the impacts of urbanization on the natural landscape and ecosystem services of the Muthurajawela Marsh and Negombo Lagoon (MMNL) located in the Colombo Metropolitan Region, Sri Lanka, with the goal to help inform sustainable landscape and urban planning. The MMNL is an important urban wetland ecosystem in the country but has been under the immense pressure of urbanization where the natural cover (e.g., marshland and mangrove areas) is continuously being converted to urban use (e.g., residential and commercial). Here, we estimated and assessed the changes in the ecosystem service value (ESV) of the MMNL based on land use/cover (LUC) changes over the past two decades (1997–2017). Considering two plausible scenarios, namely a business-as-usual (BAU) scenario and ecological protection (EP) scenario, and using a spatially explicit land change model, we simulated the future (2030) LUC changes in the area and estimated the potential consequent future changes in the ESV of the MMNL. The results revealed that from 1997 to 2017, the ESV of the MMNL decreased by USD 8.96 million/year (LKR 1642 million/year), or about 33%, primarily due to the loss of mangrove and marshland from urban expansion. Under a BAU scenario, by 2030, it would continue to decrease by USD 6.01 million/year (LKR 1101 million/year), or about 34%. Under an EP scenario, the projected decrease would be lower at USD 4.79 million/year (LKR 878 million/year), or about 27%. Among the ecosystem services of the MMNL that have been, and would be, affected the most are flood attenuation, industrial wastewater treatment, agriculture production, and support to downstream fisheries (fish breeding and nursery). Overall, between the two scenarios, the EP scenario is the more desirable for the sustainability of the MMNL. It can help flatten its curve of continuous ecological degradation; hence, it should be considered by local government planners and decision-makers. In general, the approach employed is adaptable and applicable to other urban wetland ecosystems in the country and the rest of the world.
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