Nature and the Marketplace: Capturing the Value of Ecosystem Services

Heal explains how one might put a value on an ecosystem, or parts thereof. It's a relatively recent approach that attempts to avoid a tragedy of the commons with respect to the environment, be it local or even global. A very useful idea described is the trading of pollution permits. The latter are rights to pollute. The premise is that instead of a government trying to mandate a minimum pollution level, it lets a free market determine this, by giving monetary value to permits. So that a company has incentive to develop or use innovative ways to minimise its pollution. Hence being able to sell any net gains to others. This also avoids the government trying to set a value on a permit. The book suggests that carbon permits might be crucial in battling global warming.