Green Markets: Environmental Regulation by the Private Sector



  • *This paper was prepared in the context of a larger research program that the author is conducting in collaboration with Neil Gunningham of the Australian Centre for Environmental Law, Australian National University. The author is grateful to the ANU Urban Research Program for its support, and to the Institute of Comparative Law in Japan at Chuo University for the use of its facilities during revision of the manuscript. In addition, the author wishes to acknowledge the helpful comments of Tim Bonyhady, John Braithwaite, Bob Goodin, Max Neutze, and three anonymous reviewers on earlier versions of this essay.


The article begins with a review of recent trends in the devolution of state functions to nongovernment institutions, and discusses how private interests may be enlisted in furtherance of public policy. It then outlines a variety of institutions and instruments which might comprise a system of regulation for environmental protection, and suggests some of the forms of interaction between them.

The focus then turns to commercial activity which can further the interests of environmental protection. It summarizes eight emerging trends in “green commerce” and concludes that in some settings, the constructive influence of commercial forces can exceed that wielded by government agencies.