Markets for ecosystem services: new challenges and opportunities for business and the environment

Markets for ecosystem services: new challenges and opportunities for business and the environment

Market approaches for ecosystem conservation

The Millennium Ecosystem Assessment (MA) concludes that some two-thirds of the world’s ecosystem services are degraded or being used unsustainably. This briefing paper outlines the potential for mobilising business and markets to conserve nature. It argues that market mechanisms can be a powerful complement to existing strategies for conserving ecosystems, if used in the right way.

Three mechanisms to develop markets for ecosystem services are outlined in the paper:

  • direct payments: creating incentives for resource managers to supply ecosystem services 
  • tradable permits: using the market to manage environmental liabilities 
  • certification: helping consumers and investors make informed choices

Authors highlight key issues to consider as markets develop, including:

  • cultivating an ethic of environmental stewardship throughout the business world 
  • finding consensus on the roles and responsibilities of governments, business and other stakeholders 
  • defining environmental principles, standards and indicators appropriate for eco-enterprise and markets 
  • ensuring that markets for ecosystem services do not result in conservation for the rich at the expense of the poor 
  • monitoring and enforcing the environmental performance of business in credible ways