Who gets what in environmental policy?

•Policy analysis cannot ignore how costs and benefits are distributed.•Distributions should allow for diverging capabilities to benefit.•Open access limits reliance on consumer sovereignty in policymaking.•Realization-focused co-production by stakeholders improves results.

This paper shows how anticipated impacts of environmental projects and policies can be valued in terms of money as a common denominator, and costs and benefits assigned in an acceptable distribution. To that effect, a new mechanism design of situational contracting is introduced that generates information on willingness and ability to pay or to cooperate, in a realization-focused capability approach to fairness. The situational contract reveals preferences and merit considerations of the relevant stakeholders and deals with market failure in a structured combination of political guidance, expert opinions and co-production.