Biodiversity and Conservation

, Volume 23, Issue 1, pp 1–21 | Cite as

Market-based mechanisms for biodiversity conservation: a review of existing schemes and an outline for a global mechanism

  • Irene Alvarado-Quesada
  • Lars Hein
  • Hans-Peter Weikard
Review Paper


Continuous decline of biodiversity over the past decades suggests that efforts to decrease biodiversity loss have been insufficient. One option to deal with this problem is the use of market-based mechanisms for biodiversity conservation. Several studies have analysed such mechanisms individually, but there is no comprehensive review with a comparative assessment of the performance of various mechanisms. This paper presents (i) an analysis of the economic conditions under which markets for biodiversity can be expected to function; (ii) an analysis of the efficiency of five selected biodiversity markets in the light of market and contract theory; and (iii) an assessment of the potential to scale up local or national payment mechanisms for biodiversity conservation. Our analysis shows the difficulties that market-based mechanisms face, among which are the need to ensure long-term conservation and the lack of a standardized unit of measurement for biodiversity. We provide a number of recommendations on how to overcome these difficulties. We argue that the set-up of a global registry embedded within the framework of the Convention on Biological Diversity would facilitate measurement, reporting and verification of biodiversity credits to support market-based mechanisms.


Biodiversity conservation Biodiversity markets Market efficiency Biodiversity credits 



The authors thank E.C. van Ierland and an anonymous reviewer for constructive comments.


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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  • Irene Alvarado-Quesada
    • 1
  • Lars Hein
    • 2
  • Hans-Peter Weikard
    • 1
  1. 1.Environmental Economics and Natural Resources GroupWageningen UniversityWageningenThe Netherlands
  2. 2.Environmental Systems Analysis GroupWageningen UniversityWageningenThe Netherlands

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