Creating Markets for Ecosystem Services

Abstract

Ecosystem services are the functions performed by ecosystems that lead to desirable environmental outcomes, such as air and water purification, drought and flood mitigation, and climate stabilisation. Markets rarely exist for them. This study examines how newly defined property rights have been used to create markets in Australia and the United States. The Commission found that creating these markets - such as tradeable credits for carbon sequestration - can be an effective way for governments to achieve their environmental goals.

Keywords: regulation, ecosystems, environment, biodiversity, salinity, climate

JEL Classification: Q, R