Markets for Ecosystem Services

Ecosystems provide many services from which people benefit that cannot be bought or sold in the marketplace, such as clean water and erosion control. Unfortunately government regulation has not been sufficient to protect these services. An alternative policy approach is to create and develop market mechanisms that would improve the way ecosystem services are used. Such markets for ecosystem services (MES) and market-based instruments, though mainly intended to protect the environment, can also help alleviate poverty rather than exacerbate it when designed to be pro-poor.

Three international events in 2005, the UNEP High-Level Brainstorming Workshop for Multilateral Environmental Agreements for Mainstreaming Environment beyond MDG-7, the 2005 World Summit and the High-Level Brainstorming Workshop on Creating Pro-Poor Markets for Ecosystem Services, spurred research on the creation of pro-poor markets for ecosystem services in the multilateral environmental agreements. Links between the objectives of various multilateral environmental agreements (MEAs) and the Millennium Development Goals, for example, indicate considerable scope for the development of pro-poor markets for ecosystem services by MEA regimes. There is a need, however, to identify required processes and institutional mechanisms for the creation of MES.

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