Broadly, the term ‘environmental markets’ refers to market-based arrangements whereby environmental goods or services (e.g. tree planting, pest control) are delivered in exchange for payment.
Whether for biodiversity, water, carbon, or other environmental services, environmental market schemes have been around in varying forms for decades. Commonly these schemes are enabled through dedicated frameworks, which identify a specific set of activities that need to be completed in exchange for payment. Engagement to deliver these activities can be determined through a variety of mechanisms, including tenders, reverse auctions, fixed price offerings, or via an open marketplace. Depending on scheme, the set of activities may result in the generation of environmental credits or units that can be sold, and in others, the issuance of a certificate verifying that environmental works have been completed in line with an agreed standard (e.g. Nature Repair Market). Participation in environmental market schemes is most often voluntary, but in some instances can be required as part of government regulation (e.g. biodiversity offsets).
Environmental markets can provide opportunity for landholders to earn income in exchange for delivering environmental goods or services for another party. For example, a landholder may be able to receive payments for managing pests or weeds in alignment with an agreed methodology, or for undertaking an environmental planting as part of a carbon farming project.
The opportunities presented through environmental markets are of growing interest to regional NRM organisations. This is because environmental markets can open up new funding sources for the environment, helping to repair and restore degraded land, and protect healthy landscapes that may otherwise be difficult to achieve.
