Description

Summary: The objectives of this study was to assess the development of the market for environmental services in Indonesia through a review of literature on related projects and researches. The assessment follows the typology of environmental services developed by van Noordwijk et al (2003). The focus of the assessment was on the identity of the buyers and sellers of environmental services, the payment/rewards, mechanisms, intermediaries, transaction costs, and other actors. Also included was identifying the stage of development of the environmental service markets.

By documenting the development of the market in environmental services, it is expected that concerned stakeholders will better understand the stages of development of the markets of environmental services in Indonesia, and to identify possible gaps in knowledge in recognizing the potential markets for environmental services and developing appropriate transfer mechanisms.

The review reveals that the development of environmental services in Indonesia is still at an early stage. However, there are many initiatives, emerging projects and research related to the development of markets for environmental services. Meanwhile, each environmental service market (watershed protection, carbon sequestration, biodiversity conservation and landscape beauty) shows different levels of market development. We found that in terms of all four markets in Indonesia the one for landscape beauty is relatively more progressive.