EXIT

Taking a thick conception of institutions as a lens for thinking about PES highlights the importance of more subterranean modes of power in PES’s institutional creation and functioning. While this might seem esoteric, there are in fact some important lessons for policy and practice that emerge from this perspective. Most importantly, taking a thick view of institutions that embraces the myriad faces of power suggests that getting PES right is not just about getting the set of formal rules that constitute PES’s coercive apparatus right. Getting PES right also requires orchestrating (Lister et al., 2015) the informal networks that support the creation and maintenance of particular PES systems, considering how inequalities in resources can facilitate manipulation and domination (Carpenter, 2011). What is more, the analysis suggest that practitioners should be careful not only to carefully craft PES models in light of the identities and interests of the subjects of those institutions but also, ideally, to create institutions that themselves facilitate reflection and mutual self-construction (Agrawal, 2005), along the lines of the reflective institutions outlined by Schön (1991).

Linking institutional work with PES is particularly helpful given the characteristics of our contemporary environmental challenges. As Crutzen & Stoermer (2000, p. 17) argue, we should “emphasize the central role of mankind in geology and ecology” as we enter the Anthropocene. Debates about its definition notwithstanding (Lewis & Maslin, 2015; Steffen et al., 2011; Waters et al., 2016), the significance of the Anthropocene is that, as Crutzen and Schwägerl (2011) put it, “It’s no longer us against ‘Nature.’ Instead, it’s we who decide what nature is and what it will be.” The problem with this call to think of the human and nonhuman worlds as a common, mutually embedded, co-produced entity (Latour, 2004) is that it can simply be overwhelming. Hoffman (2016, p. 130), for example, argues that “[t]he Anthropocene is not a problem for which there can be a solution. Rather, it names an emergent set of geo-social conditions that already fundamentally structure the horizon of human existence.” While such a characterization is compelling, it is also built to incite vertigo. What is needed is a mechanism by which these large-scale processes can be better linked to the rest of the institutional iceberg.

While the academic literature on PES may have been relatively silent on the institutional work required to create and maintain such systems, this labor is certainly known to practitioners themselves. Here, the implications of Article #1 are that policymakers should not be lulled into a

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false sense of confidence or despair by the extant literature. On the one hand, they should not adopt a Field of Dreams perspective that “if you build it, they will come” and expect the institution of formal PES rules to be sufficient to create a functioning system. On the other, they should not necessarily despair that PES approaches are ineffective but, rather, should consider the deeper aspects of institutions that need to be drawn upon to make such systems work (Article #3).

Recognizing that long-range teleconnections between consumer demand and land use have an outsize impact on global land cover (Meyfroidt, et al., 2010), international organizations, governments, NGOs, and private firms have each actively worked to develop innovative interventions to improve sustainability across supply chains (Newton et al., 2013; Lemos & Agrawal, 2006), in effect attempting to re-embed the environmental externalities they generate. Typically, the academic literature on supply chains differentiates between PES-like systems and certification initiatives (e.g. Forest Stewardship Council certification). As argued above, however, the underlying logic of the two approaches are in fact fundamentally the same. Article #3 builds on this observation to make the case that PES systems could be an effective institutional way to push supply chains toward sustainability.

As Article #3 argues, however, the economistic model of institutions that has tended to prevail in the PES literature is too thin to serve as an adequate design for would-be institutional entrepreneurs and workers. Rather, a thicker, humanistic approach to institutions that recognizes their role in constructing meaning and identity might be more effective at tapping intrinsic motivations. That means practitioners might need to develop new skillsets, grounded as much in behavioral economics (Sunstein, 2014) as transaction cost economics. These might include knowledge of traditional practices and norms, development of expertise in stakeholder engagement, and a clear understanding of how meanings and habits can affect behaviors.

Such a move would help avoid a significant problem with standard certification approaches: voluntary certification initiatives are intended to mobilize consumers to pay a premium for improved sustainability, effectively another attempt to internalize externalities. This approach, however, risks creating two distinct supply-chains – one a niche, sustainable chain, and another a mass-market, unsustainable one (Article #4). Dual systems like these not only fail to reach the

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entire market, as certification systems may not become sufficiently widespread for their “network power” (Grewal, 2008) to make them a default standard, they also cannot benefit from economies of scale (Article #3). This problem is illustrated by the fact that, while the number of certified standards is increasing, the overall number of certified products remains in comparison a small fraction of global production. The Forest Stewardship Council (2016) for example, certifies only 8% of total wood production, while the Roundtable on Sustainable Palm Oil (2016) certifies only 17% of global palm oil production.

Practitioners should remember the connections between ecosystems and livelihoods (Meadows, 1998; Millennium Ecosystem Assessment, 2005; Cobb and Rixford, 1998; Sojka, 2014; Persha et al., 2011; Angelsen et al., 2014; Reed et al., 2015; Article #1 and #4) extend beyond monetary considerations to include non-economic (Favretto et al., 2016; Madzwamuse et al. 2007; Article #4) and relational values (Chan et al., 2016; Article #4). For example, the role of religion and belief (Gómez-Baggethun et al., 2012; Gómez-Baggethun et al., 2010; Muradian, 2013; Article #1 and #4), which has a long history in the forest governance and advocacy literature (Berkes et al., 2000; Berkes et al., 1995), is now being integrated into PES debates (Muradian & Cardenas, 2015; Articles #1, #2, #3, #4). Such approaches have not only embraced the idea that both ecosystemic values and justice are contextual but also document clashes between local interests and aspirations of project designers and proponents linked to the environmental initiatives (Srang-Iam, 2012).

Article #3 takes a different direction from the arguments developed in Article #1, informed by

the observations in Articles #2 and #3. As noted above, the thin conception of institutions glosses over their important roles as emotional signals and sources of meaning and legitimacy. Article #3 suggests a way to harness those roles of institutions as a corrective for the limitations of existing PES models. By taking a more holistic model of institutions, this paper suggests, it is possible to think of a different approach to PES that would better incorporate supply chains and function more effectively in a teleconnected world. In particular, this approach understands that institutions can provide meaning and tap intrinsic motivations for sustainable behaviors. Rather than reducing agents to self-interested, boundedly rational actors, the PES mechanisms suggested here would tap other-regarding motivations held by targeted actors. In essence, Article #3 presents a model for what PES could look like if it engaged the rest of the

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institutional iceberg. This new model can provide a jumping off point for future discussions of PES.

Recognizing both these challenges and opportunities, practitioners no doubt already recognize that the formation of PES programs is, simply put, hard. Juggling biophysical performance and human interests and wellbeing is not the sort of straightforward activity that can be accomplished quickly or without great attention to detail. While there is unmistakably a sense of urgency for fixing global environmental problems, the mundane, intentional act of building institutions through institutions’ work takes time. That is to say, while this research points to several issues of interest to practitioners, it equally highlights that practitioners likely already know much that should be of interest to academics.

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Visual Abstract

Advancing the Payments for Ecosystem Service Discourse Through Institutional Theory

Research Problem: Design for Payments for Ecosystem Services (PES) programs have very “thin” models of institutions, largely derived from transaction cost economics, which leads would-be institutional workers to adopt a “field of dreams” approach to institution building: “if you build it, they will come.”

Research Question: How are institutions in support of PES

created? Article Research Question

A1) The Mundane Work of Building Payments for Ecosystem Services

How has institutional emergence figured in the PES literature to date, and with what effects?

A2) Institutional Working as Institutional Networking: Building Transnational Anti- Deforestation Efforts

What kinds of institutional work are undertaken during the emergence of PES, and by whom?

A3) Payments for Ecosystem Services: Rife with Problems and Potential—for Transformation towards Sustainability

What opportunities and deficiencies of PES as a mechanism are visible from existing experiments? A4) The “Teenage” Years:

Organizational Interests and the Evolution of Private Standards

How do concerns about reputational risk drive the emergence of private sustainability standards?

Theoretical Approach – Institutional Work

“Institutions are created through considerable, but mundane, effort expended in ongoing negotiations, experimentation, competition and learning, which resolve over time into shared conceptions of problems and solutions in organizational fields”

(Zietsma & McKnight, 2009: 145).

Methodological Assumptions – Scientific Realism

1) The physical world exists independently of our minds; 2) Nature is governed in different domains by different processes

Finding Implications for Academics Implications for Practitioners

A1) PES literature ignores some institutional work of creation and all institutional work of maintenance and disruption

PES studies must consider expanding concepts of institutional creation, maintenance work (or the lack thereof) to further deepen the institution

Developing procedures for ongoing management and maintenance of PES systems is critical for success

A2) Specialization in types of institutional work on the part of actors leads to centralized normative networks engaged in institutional work

Institutional work is a relational, not individualized, process

The construction of normative networks must always consider how resource imbalances disempower some actors A3) The current shortcomings of PES can be

overcome by broadening the initiative to include supply chains and resolving existing compensation bottlenecks

PES projects should rely on a broader understanding of institutions/methods for compensating and integrating into innovative economic structures

Sustainability certification systems can benefit from incorporating elements of tradeable permits to better link production and consumption

A4) While reputational concerns can motivate support for standards, the resulting standards may be a poor balance between the costs of reputation protection and environmental improvement

Brand image and reputational risk can motivate firm engagement in standards but do not guarantee sustained improvement

To avoid being trapped in a niche market, standards must become sufficiently widely adopted to become nearly reputationally obligatory

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