The Ecosystem Marketplace seeks to become the world's leading source of information on markets and payment schemes for ecosystem services; services such as water quality, carbon sequestration and biodiversity. We believe that by providing solid and trust-worthy information on prices, regulation, science, and other market-relevant issues, markets for ecosystem services will one day become a fundamental part of our economic and environmental system, helping give value to environmental services that have, for too long, been taken for granted.

Ever since the US launched the first large-scale market in an environmental commodity, sulfur dioxide, or SO2, markets have been revolutionizing the way governments approach environmental policy. Since then we have seen the creation of multi-million dollar markets in greenhouse gases, in wetlands, water pollution, and even in endangered species (read more >>). And these are just the formal markets. Throughout the world, countries like Costa Rica, Mexico , Australia, Colombia, Ecuador, and South Africa (to name but a few) have been setting up what might be considered "proto-markets"--systems of payment--for the services provided by ecosystems; systems that could one day become the precursors of larger, more traditional markets.

The potential of these markets can be seen in the European Union's Emissions Trading Scheme (EU ETS) which was officially launched in January of 2005. It is a standard cap-and-trade market established by the EU to allow it to meet its obligations under the Kyoto Protocol to the UN Convention on Climate Change. Twenty years ago the creation of a vibrant market in greenhouse gas emissions credits would probably have been considered fanciful, if not downright laughable. Today, the EU ETS exists and it traded an estimated $40 million dollars-worth of carbon credits in its first month of operation (read more >>). Credible observers are now predicting that the global carbon markets could be worth nearly $40 billion dollars by 2010, and $200 billion dollars sometime in the future. If they are right, carbon could one day become one of the world's largest commodity markets. While not all environmental markets are likely to be as large and robust as carbon, there are reasons to believe that markets for ecosystem services could one day be worth tens if not hundreds of billions of dollars worldwide.

The use of markets and market-like mechanisms to conserve and pay for ecosystem services is therefore no small movement; it is a large and growing global trend. And it is a trend that is no longer solely important to environmentalists, it is becoming of essential interest to small local communities, government regulators, businesses, and financiers around the globe. Whether you are struggling to make a living in a Mexican forest, striving to protect National Parks, or trading millions of dollars worth of carbon, these markets are for you.

But markets--and environmental markets in particular--do not run on will alone. They require sound policy, strong science, and most of all, timely and transparent information. For markets to work, people need to know they exist, and participants need to see, with clarity and ease, who is buying, who is selling, and at what price. There also needs to be a clear understanding of the policy changes that drive these markets, as well as the science that underpins them.

That is what this service, this Ecosystem Marketplace, is all about. We seek to become a one-stop-shop of timely and transparent information on the emerging markets and payment schemes for ecosystem services. We will cover information that is so essential to the proper functioning of any market: prices, transactions, how the services are measured, packaged and sold, as well as the location of buyers and sellers. Additionally, we will be convening policy change that affects these schemes and the impact of these markets on the ecosystems themselves and on low-income producers and community groups in developing countries.

Above all, we will strive to provide this information in a credible and un-biased fashion. We know that markets aren't perfect, that they don't always work to everyone's benefit, and that they can have some negative and unintended consequences. We will provide a steady flow of information on what works and what doesn't; which approaches to valuing the services of ecosystems really deliver on their double promise of a better environment and real return on investment, and which do not. We will attempt to point out the problems--not just the potential--of these emerging markets.

In providing this transparent and unfiltered market-relevant information, we hope not only to facilitate transactions (thereby lowering transaction costs), but also to catalyze new thinking and, why not, maybe even to spur the development of new markets. Our audiences, therefore, are many. They include traders in environmental commodities, government regulators, businesses affected by environmental regulation, banks and financiers, scientists, environmental and community development organizations, as well as low-income producers interested in tapping into these markets.

They all need to be involved for environmental markets to reach their full potential.

Examples of the markets and payment schemes we will be covering during the first phase of the Ecosystem Marketplace include:

  • Carbon-related schemes, such as:
    • The EU Emissions Trading Scheme (EU ETS)
    • The Chicago Climate Exchange
    • The New South Wales Greenhouse Gas Abatement Scheme; and
    • Kyoto related carbon markets (Clean Development Mechanism, Joint Implementation, etc.)
  • Water-related markets and schemes such as:
    • The US Wetland Mitigation Banking Industry
    • Nutrient trading and TMDL markets in the US
    • US Stream Mitigation markets
    • The Hunter River Salinity trading scheme in Australia
    • The Payment for Watershed services scheme in Mexico
    • The Payment for Forest services scheme in Costa Rica
  • Biodiversity-related schemes, such as:
    • Conservation Banking in the US (especially California)
    • Australian Biodiversity Offset Programs (e.g. Bush Tender); and
    • Voluntary Biodiversity offsets
  • Other Conservation transactions, such as:
    • Conservation easement deals in the US
    • Conservation reserve programs
    • Direct payments for conservation

In the future we will cover other conservation-related markets such as the markets for environmentally certified products (wood, coffee, etc.), and other, non-carbon, emissions trading markets.

Who We Are and Where We Come From

The idea for this information service arose at a meeting of a group that involved all these sectors of society; a group that calls itself  "The Katoomba Group". The work of The Katoomba Group was launched by Forest Trends, a DC-based environmental non-profit.

From its inception in the mountains surrounding Katoomba, Australia, in 1999, the group has expressly included more than just environmentalists and regulators, more than the "usual environmental suspects". Instead it has included forest product companies, businesses, bankers, grassroots activists, and journalists. And it has been truly global. It has brought together people from Australia, Mexico, Colombia, Sweden, Canada, U.K., Brazil, Indonesia, China, Japan, Uganda, the US, and dozens of other countries.

Our premise has always been that true markets markets capable of changing the way the world works while protecting our dwindling environment will only be created by marrying the vision, the innovation, and the experience found throughout the world and in all sectors of society. We hope the Ecosystem Marketplace can be a vehicle for real change for ecosystems, for businesses, and for local communities.

Please work with us to make this global information platform (which will take a variety of forms: web site, e-mail bulletin, newsletter) as useful as it can possibly be.

Without your help, this bold experiment cannot succeed.