Does economic valuation really influence policy?

Economic valuation of ecosystems aims to highlight the economic importance of ecosystems and the services they provide, with an eye toward influencing decision-makers to improve management to preserve services. However, through an ongoing review of actual policy influence by coastal ecosystem valuations in the Caribbean, we are coming to believe that such influence happens infrequently. In Jamaica, for example, we identified more than a dozen published coastal valuations and none had demonstrable policy influence.

Our review has also revealed several bright spots as a result of valuation studies:

  • Belize saw both fruitful NGO advocacy and improved coastal policy-making.
  • The Bonaire Marine Park adopted, and later increased, user fees—making it one of the few self-financed marine parks in the Caribbean.
  • St. Maarten established the Man of War Shoal Marine Park.
  • The Florida Keys National Marine Sanctuary recovered millions of dollars for reef restoration after ship groundings—just one of several U.S. examples.

We are learning that context matters. The elements of success include local demand for valuation, a clear policy question, strong local partnerships, access to decision-makers, good governance and study areas with a high dependence on coastal resources. It is also clear that methodology matters. Valuation should be done on a scale appropriate to the policy question, with efficient implementation, possibly including use of standardized methods that are matched to the policy question, and with strong stakeholder engagement throughout. Absolute accuracy is not always essential, as many stakeholders use valuation results as a ballpark figure to guide decision-making. However, clear presentation of methods and limitations is critical in order to address critiques and legitimize results.

We need to ask ourselves some tough questions and work towards designing and applying valuation studies that will yield meaningful impacts.

  • Should future valuations only focus on locations where preconditions for success already exist (e.g., strong partnerships, good governance, high coastal resource dependence)?
  • Why have developed countries achieved greater policy influence than developing countries?
  • Even if economic valuation can be useful, is the return on investment worthwhile? Would you achieve greater impact by investing in other tools for decision-making and policy influence?

Do you have examples where valuation of tropical coastal ecosystems has influenced policy or investment? If so, please share. We are still compiling examples and deriving key factors for success, and look forward to sharing our final results with you all.

Author bio: 
Lauretta Burke leads the Coastal Team within the People and Ecosystems Program of the World Resources Institute (WRI). Lauretta is a geographer and spatial analyst, who specializes in providing information and tools to improve management of coastal ecosystems. This body of work includes spatial analysis of threats to coral reefs (under the Reefs at Risk series) and economic valuation of coastal ecosystems (under the Coastal Capital series). See for all reports and methodologies.




Azur (


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Here an example of how a combination of and Ecosystem Services Valuation and a Multicriteria Analysis influenced policy in the tropics.

Check out the work done by the ECOTICOS project in Costa Rica. The team included both “ticos” and “ecos” across international borders including Gund Institute economist Joshua Farley and other UVM researchers; the Costa Rican conservation organization Fundacion Neotropica led by local expert Bernardo Aguilar; Eduard Muller from the Escuela Latinoamericana de Areas Protegidas; the University for International Cooperation; the University of Costa Rica; Earth Economics, a U.S.-based analysis group with close ties to UVM’s Gund Institute; CeNAT, the Costa Rican analog to NASA; Florida Institute of Technology and others. This breadth contributed to their success.

Best regards, Azur


So how do you weigh an airport against the goods and services provided for free by nature? What is the value of large-scale industrial development compared to more diffuse economic activity like traditional mussel harvests, or plans for small-scale businesses by local entrepreneurs? What happens to the eco-tourists if swamps dry up and birds fade away? What is the global value of the tons of carbon stored in the mangrove? And why should local job-seekers or officials care?

“In a complex ecological economic system, it is extremely difficult to answer such questions and impossible to answer them definitively,” Moulaert notes, “yet it is imperative to try.”


Linwood Pendleton

Good points Lauretta! I think

Good points Lauretta!

I think one challenge for getting valuation data to be more influential in policy-making is that few valuation studies are conducted in response to a policy question or a request from a policy maker.  As a result, the values estimated are often not the ones needed for the policy decisions at hand.  The one exception to this rule is valuations done for the purposes of natural resource damage assessment.  In the U.S., these values consistently play a role in the setting of fines and required mitigation that result from a coastal pollution event.

One assumption sweeping the coastal and ocean community, in fact much of the world, is that wealth accounting for ecosystem values will lead to better policymaking.  This may work, but the risk averse side of me says let's try it in a limited, iterative manner first.  We need to work out the kinks so we can figure out what measures (values), at what scale, and what frequency of collection will prove most useful for policy making.

There is no shortage of coastal and marine ecosystem valuations (see  What is scarce is meaningful valuation studies that make a difference.  






Peter Edwards

Thanks for this timely piece

Thanks for this timely piece Lauretta!

As you posit, Context and Methodology do indeed matter.

Unfortunately I have no recent examples where the valuation of tropical ecosystems has resulted in policy or investment.  I have read about its application to Bonaire’s marine parks, I have read about resource damage settlements in Belize and its incorporation in to PES schemes in Central and South America.

However I will attempt to answer some of the questions you posed (from the perspective of a Caribbean national working in a developed country).

Should future valuations only focus on locations where preconditions for success already exist (e.g., strong partnerships, good governance, high coastal resource dependence)?

This relates to the issue of both context and method.  Context – I know of one example (Jamaica) where the “demand” for valuation approaches may possibly increase because of environmental regulations that require the incorporation of Natural Resource Valuation (NRV) approaches into the EIA process.  This has not completely been thought out but the government is trying to move ahead.  However this is where Methodology matters.  There is no one size fits all; stated/revealed preference, damage avoidance, bio-economic modeling?.  In many developing countries, the use of these techniques is not currently considered in cases where there is an environmental insult (ship grounding, oil spills, smoke/dust nuisances).  There is clearly a need, for the incorporation of polluter pays principle that is based on the internalization of negative environmental externalities by the "producer".  However the absence of any integration between internationally binding agreements, local laws/acts and lack of awareness by the judiciary has resulted in no current “demand” for these valuation approaches.  This is another area for public education and sensitization - yes I said it, get the lawyers involved!

Why have developed countries achieved greater policy influence than developing countries?

I can’t answer this definitively but I will guess that in some cases this may be due differences as it relates to the increased propensity for litigation in developed nations as compared to developing countries.  However, there are a few examples where civil society has begun to the use of the legal system to push for payment for lost ecosystem services and other public bads.  Perhaps this will increase the need for credible natural resource economic valuation.  Maybe developing countries are now experiencing their own “Rachel Carson – Silent Spring” awakening(s).

Even if economic valuation can be useful, is the return on investment worthwhile? Would you achieve greater impact by investing in other tools for decision-making and policy influence?

I think economic valuation should be part of that suite of tools. As you correctly stated Lauretta, the welfare estimates produced from valuation need not be “accurate to the nearest decimal point” but properly conducted studies (with the essential caveats and limitations clearly articulated) will contribute to better decision making.

I think our challenge is to continue to educate decision makers (including career civil servants and elected/political individuals) on the breadth of valid and theoretically consistent valuation approaches that exist.  There is no one size fits all but context and methodology do matter.



Excellent points, Lauretta! I

Excellent points, Lauretta! I agree with the conditions that you outline in which valuation studies tend to be useful for influencing decision making. Another important consideration is that influencing decision making  and policy often requires a long-term, ongoing, and iterative process of negotiating and working with decision makers. Unfortunately, many times, resources are only available for the valuation study, not the months/years required to support the discussions, workshops, and  meetings necessary to integrate the results into decision making. In addition, it is important to note that  the economic values of some ecosystem services will be easier than others to integrate into decision making- in some cases, biophysical or other measures may be sufficient or superior for influencing decisions. So, to answer your question about whether valuation is a useful tool, I believe it is, but, like any tool, it is important to understand whether it is the most appropriate tool for the goal or problem at hand. You've done a good job of fostering understanding of the factors that contribute to making valuation effective, or not. Thanks for this insightful, timely piece!

~Carter Ingram, Wildlife Conservation Society



Economic evaluation based on

Economic evaluation based on natural capital and ecosystem services is an attractive concept from an academic perspective.  It appears to me that in developed countries, natrural resource economics is more influential in policy making and in supporting legislation to implement public policies.  Traditional natural resource economics requires a lot of infrastructure and resources (people and dollars) to gather the data that is converted in information to support policy and legislation.

The question that I would pose is that for tropical, developing countries is the infrastructure and resources available to evaluate ecosystems services and natural capital present in these countries.  Certainly the academic efforts to evalauate ecosystems services and natural capital in the Gulf of Maine  greatly exceeds the capaibilities of the surrounding New England state governments.  It is hard for me to see how a developing country could do this on their own.  Thus international foundations and institutions  have a major capacity building challenge ahead of them to implement economic evaluation as a practical tool to support policy development and legislation at the local level.


Becca Madsen

My gut reaction: [non-market

My gut reaction: [non-market economic] valuation helps larger government institutions with policy/decision-making for public good, but might not be as helpful for smaller institutions or private companies. Why do I think this? Because it's pretty darn hard to convince someone to spend money on something when there is no black-and-white dollar returns to the spender. I'd call it 'grey' dollar returns. I've been thinking about this a lot - which ecosystem service values could you actually realize in real money with pretty certain causality? - and I think it's a pretty small suite of activities. But for a larger government institution, 'grey' dollar returns might be sufficient.

Lots of good points above! Good cogitation all around.

Sylvia Tognetti

Hello Lauretta - Great

Hello Lauretta -

Great points. And I look forward to seeing the review to better understand what sets the bright spots apart. But as a general comment, it may help to think of value as a verb rather than as a bright shiny object.

Ultimately, ecosystem services only have value if people value them, i.e., are willing to pay. Which is unlikely unless they have rights that insure access to future benefits, and have confidence in the effectiveness of the measures being paid for. As a starting point for advocacy, it is important to ask more specific questions such as: value to who? And do they have rights? And who is benefiting from the status quo?

 And context has to be considered on various levels. In the broader context of austerity and rampant scientific disinformation, with budgets being cut for basic things like weather satellites, the case becomes a more difficult one to make. That doesn't mean it should not be done, but it does imply the need for rethinking or putting more emphasis on basic strategies for managing knowledge to enable learning among stakeholders, and communication about trade-offs.

Nicolas Pascal

Lauretta,  I think you are


I think you are raising a real question: the role of economic valuation for policy-makers? My response come specifically from my experiences on coral reef and mangrove ecosystem services valuation (ESV) around the world and I will quote a paper in press in which i have participated (Laurans et al): 

" Three very different roles have been identified for Coral Reef Ecosystem Services valuation :

(1) “decisive” ESVs are expected to allow an ex-ante choice over a given set of options by weighing the social and economic consequences of those options;

(2) “technical” ESVs are used to “fine tune” an economic instrument (such as setting payments for ecosystem services or environmental taxes);

(3) “informative” ESVs are valuations seen not as a measurement, but as an argument, meant to influence the public opinion and is the most frequently referred to in the ecosystem valuation literature. Most Coral Reef ESVs have been produced in the last perspective. No specific decision is explicitly targeted, but implicitly all types of decisions that potentially affect the environment. Here ESVs do not pretend to accurately measure a value, but rather to deliver a signal regarding the need to protect coral reefs, and the justification of conservation policies". (a list of concrete example is given at the end of the post). 

My personal opinion is that ESV should focus now on the second role (fine tune economic instruments) concentrating on Ecosystem services "marketable" and with a potential " wealthy buyer". A better identification of the underlying ecological processes and the spatial distribution of flows of E Services with their financial value should be the base for the negotiation of practical economic instruments. The scale is usually smaller than informative ESV and the level of precision required is not about financial values but about identifying clearly uncertainties about what "buyers" are purchasing... 

Hope my frenchy english is understandable and this post has brought new perspective in the discussion, 



Annexe: In that informative effort, Pacific CRESVs have targeted a varied list of stakeholders:


  1. Development banks, for which CRESVs intend to highlight “how conservation has helped the local or regional economy and the people who depend on the managed ecosystems” (e.g. the AFD cost-benefit analysis of community based marine managed areas in Vanuatu).
  2. Environmental agencies and conservation NGOs that need to justify “why do we need conservation here?” when arguments regarding the pristine nature and uniqueness of ecosystems are considered insufficient (e.g. the valuation of mangroves to raise awareness of the role of these ecosystems in human well-being ; or valuation of the costs of wild versus cultured live corals to inform public policy).
  3. Government planners to whom it is then suggested to incorporate "green" welfare accounting in their monitoring and planning activities, so as to change the compass, as is suggested by TEEB (2011). An example of this application is the use of the World Bank natural capital accounting approach in New Caledonia).
  4. Environmental government agencies that intend to assess and communicate the ecosystem services that their actions protect or improve. For instance, the results of the TEV in New Caledonia were used by the local environmental department to influence budget allocation.
  5. Last, local stakeholders such as customary chiefs or MPA managers could use the results to highlight benefits for the local users and members of the community. For example, the Fiji and Vanuatu MMA valuation helped put forward benefits and equity distribution that, perhaps, were not perceived by the inhabitants. They were used also as a tool in the community for making trade-offs between the short and medium term. "