Institutionalizing environmental valuation into policy

Phelps, Jacob; Dermawan, Ahmad; Garmendia, Eneko


Monetary valuation of the environment is increasingly embedded in policy. Despite broad claims that valuation is policy-relevant, there is widespread frustration that it has not widely improved environmental outcomes, that it obscures many other types of values, and presents unintended consequences. We argue that this is, in part, because of a tendency to overlook the mechanics of how valuation tools and data are embedded into the institutions (regulations, norms, rules, schemes) that mediate decision-making. Discussions of how valuation engages with policy are often anecdotal and rarely systematic. This manuscript responds with a structured analysis of valuation within 7 Indonesian government institutions. By analyzing the legislative provisions that deal with valuation within each agency, we explore the challenges of institutionalizing valuation into policy. We consider the difficulties of: defining what is (and isn't) valuable, specifying methods, and identifying policy objectives. We found broad gaps and inconsistencies in the aims, definitions, methods, and treatment of non-market goods and services. We identify a need for broadened thinking about the role of valuation data within everyday environmental governance, including how it is codified and operationalized. To this end, we provide a framework of the cascade relationship between environmental management, ecosystem goods and services, human wellbeing, and their relationship to environmental governance, which uncovers the mechanics of how valuation can inform decision-making via different institutional arrangements. We call for a critical, yet also more pragmatic and field-based interrogation, of how and why valuation is conducted by decision-makers, in order to improve our understanding of its social and environmental implications.