What might stimulate the development of ecosystem service markets?
Effective markets for ecosystem services are almost always associated with public policy or a regulatory framework. For example, the active carbon trading markets in Europe are a result of the greenhouse gas limitations set in the Kyoto Protocol. Wetland mitigation banking is a result of national policy and regulation. Cost savings associated with the use of forests and forestry practices as an alternative to engineering solutions may drive some ecosystem service trades. For example, it may be more cost effective for a municipality to pay upstream landowners to reduce erosion than to dredge sediment from dams and waterways. Other motives – altruism, improvement of corporate image, and philanthropy, for example – may also play a role in future market development. Investors are most attracted to ecosystem service markets that have universally accepted standards; an internationally fungible, tradable unit; risk mitigation; legal and financial accountability; an insurance product; and a sc
