Market-based approaches to environmental management are all the rage. Claims that market mechanisms can encourage environmental protection and promote greater economic efficiency, whilst saving taxpayers money, are tantalising. In the forestry sector, policymakers are widely heeding this advice and shrinking command and control systems in favour of incentive mechanisms that seek to align private enthusiasm with the public good. In some cases, governments are even promoting the creation of markets where none existed before. In others, markets are evolving of their own accord.
In such times of change, it is difficult to stand back and take stock. Yet, it is during such times that guidance is most needed. Unanswered questions abound. What drives market development? How should markets be established? What costs are involved? Will markets improve welfare? Will some stakeholders benefit more than others? How does performance vary between market structures? What is the role for governments? In the rush to introduce market-based solutions to environmental problems, a particular concern is how markets are impacting on poorer groups.
This report attempts to shed light on these questions through a global review of emerging markets for carbon sequestration, biodiversity conservation, watershed protection, and landscape beauty. In total, 287 cases are reviewed from a range of developed and developing countries. While emphasising the enormous diversity of experiences throughout the world, the report also draws out cross-cutting lessons relating to market form, drivers, processes, and impacts. The report calls for both optimism and caution, with special attention given to potential pitfalls as well asopportunities facing poorer groups. Policymakers and practitioners seeking to address environmental and social problems in the forestry sector through market instruments would do well to consider the insights offered by this review.
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