11. Market-based Instruments and Ecosystem Services

Opportunity and Experience to Date

  1. Steve Wratten3,
  2. Harpinder Sandhu4,
  3. Ross Cullen5 and
  4. Robert Costanza6
  1. Stuart M. Whitten1 and
  2. Anthea Coggan2

Published Online: 20 JAN 2013

DOI: 10.1002/9781118506271.ch11

Ecosystem Services in Agricultural and Urban Landscapes

Ecosystem Services in Agricultural and Urban Landscapes

How to Cite

Whitten, S. M. and Coggan, A. (2013) Market-based Instruments and Ecosystem Services, in Ecosystem Services in Agricultural and Urban Landscapes (eds S. Wratten, H. Sandhu, R. Cullen and R. Costanza), A John Wiley & Sons, Oxford. doi: 10.1002/9781118506271.ch11

Editor Information

  1. 3

    Bio-Protection Research Centre Lincoln University, New Zealand

  2. 4

    School of the Environment Flinders University, Australia

  3. 5

    Department of Accounting, Economics and Finance Lincoln University, New Zealand

  4. 6

    Crawford School of Public Policy Australian National University, Australia

Author Information

  1. 1

    CSIRO Ecosystem Sciences, Canberra, Australia

  2. 2

    CSIRO Ecosystem Sciences, Brisbane, Australia

Publication History

  1. Published Online: 20 JAN 2013
  2. Published Print: 25 MAR 2013

ISBN Information

Print ISBN: 9781405170086

Online ISBN: 9781118506271



  • ecosystem services;
  • market friction MBIs;
  • market-based Instruments (MBIs);
  • price-based MBIs;
  • quantity-based MBIs


Market-based instruments (MBIs) are measures designed to signal to land managers the rewards or consequences for certain actions in much the same way as markets do. MBIs offer a new way for governments to bring about an increased level of supply of environmental goods. This chapter first defines what MBIs are and identifies generic conditions under which they are likely to be successful. Next, it describes the range of MBIs available and their conceptual structure. The chapter presents a number of examples of successful MBIs for ecosystem services as an indication of the range of market forms that have been developed to date. The examples of successful MBIs are price-based MBIs, quantity-based MBIs, and market friction MBIs. The chapter closes with some observations on key design requirements and future research required to support successful MBI design and delivery.