The use of different measures to compensate the environment when human development projects take place has been frequently discussed in both Europe and the USA. This paper reviews the use of environmental compensation in Germany, the USA, the Netherlands, the UK and Sweden. In Germany compensation methods have been used since the 1970s. In the USA there are requirements for mitigation and compensation measures for wetland losses. In the Netherlands, the compensation measures are focused on certain protected areas. In the UK there are few legal instruments that formally require environmental compensation. In Sweden the new environmental legislation has made it possible to legally demand environmental compensation measures to gain permits for exploitations. However, these new Swedish requirements have only been available since 1999 and the use of compensation measures needs to be developed. In this article we argue that the German environmental compensation practice is most developed and is worth further study in order to develop the use of environmental compensation methods in the Swedish planning system. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.