Environmental markets

Markets and market-mimicking procedures are increasingly used in environmental governance. Markets are institutional arrangements that involve the transfer of rights over goods and services between buyers and sellers using money as the medium of exchange. The direct use of markets is evident in the emissions trading regimes that have become the major approach to climate change mitigation policy and, more recently, in offsetting regimes for the protection of biodiversity. Market-mimicking procedures involve the monetary valuation of environmental goods and bads for the purposes of cost-benefit analysis (CBA).