2.1. Pragmatism and Governance Trends

Markets for biodiversity represent a response to the enduring crisis of biodiversity conservation and continuing failures to act on it. One of the reasons for their emergence is the impatience with and despair over the policies of states in managing and legislating biodiversity or, at the very least, their poor enforcement – a trend that has lasted over many decades. Even if government policies have in some cases been effective in reducing the rate of exploitation of land, they have largely failed to encourage the sustainable management of biodiversity over the long term. Many frame the key puzzle of biodiversity conservation as a question of how to ‘compensate guardian communities for forgoing opportunities from profitable exploration in order to have them conserve a resource of global benefit’.^{Footnote 18}

The creation of appropriate incentives to encourage this redistribution (‘incentivization’) played an important role in the discussion about the creation of market mechanisms. In closing the gap between private and public benefits, public sector funding has proved to be insufficient^{Footnote 19} and other, more ‘decentralized’, options have been explored since the 1980s.^{Footnote 20} But while, for some, practices such as trophy hunting, debt relief, bioprospecting and ecotourism all represent positive examples of a new management paradigm of ‘community-based conservation’, others contest these as a ‘false conservation’ and as part of an agenda that primarily serves the capital and (Western) elites.^{Footnote 21}

In the last decade, the effects of environmental change have begun to be assessed not only in terms of natural sciences but also more holistically, by examining their impacts on society and the economy. The increasing recourse to economics has been used both as additional justification for action, supplementing scientific evidence, and as a means of better communicating the implications of the environmental crisis to target groups. In the field of biodiversity conservation, the support for incentivization was further strengthened by attempts to estimate the (global) value of ecosystem services and natural capital.^{Footnote 22} Far from being simply exercises in economic accounting, these endeavours directly addressed the question of an appropriate policy response. They advanced the idea of economic and financial interventions being powerful regulatory instruments and explicitly called for the ‘greater use of economic instruments and market-based approaches in the management of ecosystem services’.^{Footnote 23}

More broadly, the idea of relying on markets and private funds in biodiversity governance should be linked to the prevalent governance method, which began in the West in the 1990s, of transferring regulatory power away from the state, the reduction of public expenditure and the growing responsibilities of the private sector.^{Footnote 24} This strategy gained additional prominence in environmental law towards the end of the 1990s as a result of the experience in the climate regime where non-state actors were involved in a number of mechanisms, both treaty-mandated and voluntary.^{Footnote 25} Mounting evidence convinced the policy-makers of the comparable economic justification for also scaling up biodiversity issues, and invited them to replicate relevant aspects of the climate model.

2.2. International Institutions

The effort of finding workable incentives for the conservation of biodiversity emerged in slightly different contexts in different institutions, but these diverse processes can be pooled and described as one overall picture. In order to illustrate this, I will examine the development of discourses and actions for the international conservation of biodiversity as these took place in three institutional formats: the Convention on Biological Diversity (CBD),^{Footnote 26} the United Nations Environment Programme (UNEP), and the International Union for Conservation of Nature (IUCN). These institutions play a leading role in conservation more generally and, in this particular case, in setting the agenda for market mechanisms. They differ starkly in their membership, institutional goals, priorities and activity, among other things. My aim in outlining the work of these institutions is to demonstrate that what is going on can be viewed as a single global move towards an ‘incentivization’ of nature.

The CBD’s appetite for couching measures for conservation of biodiversity as incentives results from explicit treaty provisions^{Footnote 27} as well as the States Parties’ growing motivation to employ a more economic approach to the implementation of the treaty. There is increased recognition of the fact that built-in incentives of sustainable use and benefit sharing^{Footnote 28} represent an insufficient motive for biodiversity conservation. Economic incentives are seen as a way of overcoming the treaty’s weaknesses of very few strict obligations, the absence of enforcement mechanisms, and insufficient buy-in/participation by the private sector.^{Footnote 29} A further motive for the development of incentives is that they overcome the scarcity of financial resources awarded by the principal financing mechanism of the treaty, the Global Environmental Facility, in the form of grants to developing states.^{Footnote 30} Developed states have been continuously demanding that the financial mechanism should be more performance-based, thus closer to a trade exchange rather than aid flows.^{Footnote 31}

UNEP’s work on economic incentives can be placed in the context of its broader mandate of assisting particularly developing and transition countries through the improvement of their national laws. In all its work, and especially during the 1990s, UNEP actively promoted the use of economic incentives in its portfolio of policies.^{Footnote 32} The extension of incentives into the field of international biodiversity management thus seems a continuation of its work in national contexts. UNEP endorses market mechanisms as efficient, cost-effective and innovative.^{Footnote 33} An equally important aspect of their appeal – especially from the perspective of this continually underfunded institution – is the prospect of these mechanisms generating funds for conservation. Support for the economic approach to environmental policy culminated in UNEP’s launch of the ‘green economy’ concept in 2009–10, which essentially aims to reframe the global economy from a carbon intensive ‘brown economy’ towards a more sustainable one, based on the market-based solutions.^{Footnote 34}

The IUCN’s support for incentivization is expressed through a variety of methods and institutional programmes. Since the nineties, the IUCN has supported work on economic policies through one of its six expert Commissions. In 2002 or thereabouts, the organization began to systematically develop close contacts with businesses,^{Footnote 35} most of which were very responsive to its advances.^{Footnote 36} A few years later, the IUCN started to elaborate on the idea of payment for ecosystem services, also in the international context. Much of this work has been carried out in cooperation with UNEP and the CBD Secretariat. In the run-up to Rio+20, the IUCN subscribed to the concept of ‘green economy’, with the aim of integrating the value of nature into economic policy and practice, and of benefiting from private sector leadership and innovation.^{Footnote 37}

The institutional and substantive context in which the idea for market mechanisms for biodiversity conservation has evolved shows that these new regulatory tools have attempted to respond to a set of interrelated expectations. They seek to represent incentives that encourage the action of stakeholders as opposed to limiting it by coercive and prescriptive obligations, and they aim to achieve integration of biodiversity into existing economic structures rather than oppose them. Accordingly, market mechanisms do not actually present new facts, but ‘speak the right language’, which is used by the stakeholders – the language of the market. They also tap into new sources of funding. Finally, they provide a means of integrating the private sector into the regime alongside states.

The assumption embedded within the incentivization approach is that the fundamental problem for the degradation of biodiversity lies in the fact that the full value of nature is not recognized by the economic accounts with which we operate.^{Footnote 38} The rhetoric of the need for internalization of externalities has been diffused among businesses, governments and non-governmental organizations (NGOs) as a platform needed to conserve biodiversity.^{Footnote 39} The notions of ‘(restoring) natural capital’, ‘(investment in) ecological infrastructure’ and ‘(payments for) ecosystem services’ are some of the building blocks of a new lexicon,^{Footnote 40} transforming conservation from a risk or liability to a ‘potential profit centre’.^{Footnote 41} Changing the reference of the discourse about the conservation of nature from one about values, rights and duties to one of an economic imperative raises controversy. Some applaud it for allowing biodiversity conservation to act as ‘a viable business proposition in its own right’^{Footnote 42} while others lament it for ‘fit[ting] perfectly with the possibilities for maximising the earnings generated by obligatory consumption’.^{Footnote 43}

The economic repackaging of the biodiversity project has found its way deep into the institutional structures and the central themes of work by conservation organizations, including large transnational NGOs. Some of those that today have a programme or section devoted to market mechanisms, ‘green economy’ or business involvement are the World Wildlife Fund (WWF),^{Footnote 44} Conservation International (CI),^{Footnote 45} the World Resources Institute (WRI)^{Footnote 46} and the Nature Conservancy.^{Footnote 47}

The discourses about incentives and market mechanisms represent both a project that has come into being with the active engagement of the major agenda-setting institutions and a consensus that now exists between them; this collective development is taking place across these institutions simultaneously. Only a few NGOs, associated with a more grassroots movement, usually located in the global South, oppose the movement.^{Footnote 48}

The purpose of the overview of ideational embedding and expectations of market mechanisms goes beyond that of setting the scene. Contextual developments help to reveal that a whole new way of thinking about the biodiversity problem had been induced. I claim that discourses, in both their institutional and substantive dimensions, act not only as precursors to the regulatory tools of market mechanisms, but also as an integral part of law and regulation. If we understand environmental governance not only as a rational process of instrumental character and analytical effort, but also as a social and political phenomenon, we must recognize that the choice of how to frame the biodiversity problem influences policy outcomes.^{Footnote 49} Contouring the biodiversity problem as one of insufficient integration in the dominant political economy, based on the market and governance structures which are heavily influenced by private actors, means that the solutions have to be sought within the same framework.

The discourse of incentivization furthers a belief that biodiversity loss and conflicts related to the use of biodiversity may be resolved if only we can access more financial resources and if markets can extend far enough to include areas of biodiversity and ecosystem services. This proposition directly contrasts with the claim that a lack of funding for biodiversity is a matter of distribution of government funds rather than insufficiency, as environmentally harmful subsidies today more than outweigh the funding available for biodiversity conservation.^{Footnote 50} This construction of the biodiversity problem silences many other demands expounded through the debates about biodiversity. The most salient among these are calls for the recognition and reparation of colonial injustices, for a social and political autonomy, territory, identity and a reformed economy.^{Footnote 51}

3.1. Business and Biodiversity Offsets Programme

The BBOP implements the model of so-called conservation banking born initially in the US in the 1990s.^{Footnote 54} It rests on the idea that project developers who are causing damage to habitats or species in the process of their economic activity should (make a commitment to) compensate by restoring an ecological value comparable to that which has been altered.

The BBOP is a network of partners: conservation organizations, corporations, finance companies and government bodies. It enjoys wide participation: its advisory board has over 50 members and its ‘learning network’ over 500 members. These numbers attest to the BBOP’s ambition to become a visible player in the biodiversity markets. Although not carrying out actual projects, the BBOP aims to influence the markets of biodiversity offsets by offering coherent guidance for project implementation, including indicators for the evaluation of individual projects.^{Footnote 55}

One of the BBOP’s central tenets is the principle of ‘mitigation hierarchy’, which seeks to ensure that all available mitigation measures are taken to avoid and minimize negative impacts as far as possible, and marks biodiversity offsets as a last resort option for developers. But, to many, the offsetting schemes are a more permissive alternative to an outright ban on damaging activities, granting the ‘licence to destroy’ which ‘could be used to justify avoidable destruction’.^{Footnote 56} The scheme claims to be neutral in that it ‘puts a cost on [an endangered species or habitat] for those who would harm it, and at the same time it creates a value for those who would conserve it’.^{Footnote 57} But in practice offsetting works for the developer, as it is applied only to projects above a certain threshold, it follows rather than precedes the destruction, and brings positive results only in very limited (ecological) circumstances.^{Footnote 58}

3.2. The Green Development Mechanism

The idea of the GDM emerges from the better-known Clean Development Mechanism (CDM)^{Footnote 59} of the climate change regime. Rather than carbon emissions, the ‘trading element’ in this mechanism is a component of biodiversity or an ecosystem service. Although the CDM has been beset with controversies since the very beginning,^{Footnote 60} it has nonetheless inspired the biodiversity community. In 2006, UNEP and the IUCN, in cooperation with the Secretariat of the CBD, began to look into the options for an ‘international payments for ecosystem services’ mechanism with a special emphasis on biodiversity and a broad range of ecosystem services.^{Footnote 61} In doing so, the Green Development Initiative (GDI) asserted itself as a coordinator of the GDM, operating from 2009. The GDI aimed to raise sufficient interest and support for the launch of the GDM at the 10^th Conference of the Parties (COP) of the CBD in 2010, but it failed to secure consensus.

The GDM was envisaged primarily as a tool that would fill the biodiversity financing gap, as public funds have been unable to do so.^{Footnote 62} It rests on the idea that any area with some biodiversity value (a coral reef, a forest, a wetland or organic farm, for example) may draw up a ten-year development plan, which is certified, registered and then put onto the market to be bought by companies or others interested in biodiversity ‘credits’.^{Footnote 63} The GDI’s main efforts are thus focused on establishing a standard and a registry that will support a certification process for biodiversity-responsible land management.

In advancing the idea of the GDM, the GDI is keen to maintain close links with the CBD and to present the GDM as a ‘spin-off instrument’ of this intergovernmental forum. The GDI purports to respond directly to the invitation by the CBD COP in 2008 to ‘come forward with new and innovative financing mechanisms’ and to the strategic decision for ‘enhancing the engagement of the business community’.^{Footnote 64} The GDI further explains that it seeks to contribute to the CBD’s objectives and also to the implementation of the most recent Strategic Plan for Biodiversity 2011–20.^{Footnote 65}

Those wary of the GDM demand that at least strong safeguards need to be put in place before any such mechanisms are developed.^{Footnote 66} Concerns are raised that the enthusiasm for projects may bypass existing land rights and the needs of native communities, indigenous peoples and other minority groups.^{Footnote 67} Despite the proponents’ assurances that the purpose of the scheme is precisely to empower these peoples with resources so that they can continue to be the guardians of landscapes,^{Footnote 68} the requirement of drawing a management plan for its subsequent authorization resembles a top-down attitude rather than one in which communities themselves determine the meaning of ‘sustainability’.

3.3. Reduced Emissions from Deforestation and Forest Degradation

Reduced Emissions from Deforestation and Forest Degradation (REDD)^{Footnote 69} is a form of market for conservation whereby actors in developed countries provide direct payments to developing countries in exchange for their commitment to preserve the benefits of forests. REDD is presented as an unprecedented opportunity for maintaining forests, capable of overcoming persistently failed attempts at a forestry regime and of becoming the most successful large-scale source of funding for forests.^{Footnote 70} It is also seen as a way of advancing biodiversity concerns into the climate regime, an avenue which has established a dominating role in the environmental agenda.^{Footnote 71}

The idea for REDD was born within the United Nations Framework Convention on Climate Change (UNFCCC)^{Footnote 72} in 2005, but negotiations on its legal form within this forum are still ongoing. However, the slow pace of the UNFCCC talks in recent years has not forestalled developments in parallel avenues, mainly operated by transnational coalitions of individual experts, governments, corporations and NGOs. The projects are at diverse stages of advancement and are run in different configurations, including their funding arrangements, but mostly within the framework of multilateral initiatives.^{Footnote 73}

Efforts to secure a credible future for the REDD scheme have failed to rebut harsh critiques of its founding idea and implementation.^{Footnote 74} Seemingly technical issues in the complex negotiations about REDD – such as the definition of ‘forests’, ‘reference levels’ and ‘leakage’ – translate into conflicting views between actors. The views are fundamentally related to their conceptions of justice, the particular situations of countries, and the benefits they might draw from the mechanism.

Another contested issue relates to property rights for forest carbon – an abstract and new legal idea. At the source of its controversy is the question of who actually holds them: forest-dependent peoples, forest communities, individuals, governments or corporations – if anyone at all. Carbon rights are inherently contingent on the issues of land rights and tenure, which remain unresolved in many developing countries, negatively affecting particularly vulnerable groups.^{Footnote 75} They are related to the technical and governance capacities of forest communities and states. Not infrequently, the aim of carbon reduction in forests is in direct competition with the objectives of food security and environmental integrity: as REDD prioritizes the forests storing the highest amount of carbon, the problem of deforestation may only be shifted onto other forests, possibly with more biodiversity. At present, the only assurance for the positive impact of REDD projects on biodiversity are claims of compliance with voluntary standards.^{Footnote 76}

Negotiations over the design and implementation of REDD and its promises may obscure the fact that activities now framed in terms of REDD had been pursued for years without, however, being accounted for in terms of carbon dioxide (CO₂) emissions reductions. Or, despite being squared within measurable and verifiable criteria and standards, the debates about REDD, in fact, concern a number of issues relating to sustainable development and equity, underlying the traditionally controversial forest politics.^{Footnote 77}

3.4. Overview of Transnational Market Mechanisms for Biodiversity Conservation

In their design, the BBOP, the GDM and REDD are not without links to traditional interstate structures (CBD and UNFCCC) and are built on models and experience from domestic legal systems. Having formed independent institutional structures, these mechanisms nevertheless like to trace their origin to international fora and seek to retain institutional cooperation with them as a way of demonstrating their legitimacy.

Market mechanisms for biodiversity are the result of a multi-actor and multi-jurisdictional collaboration, rather than an undertaking by a single actor. Prominent actors involve intergovernmental organizations, large conservation organizations, governments, sub-state bodies (ministries or specialized agencies), and individuals in their role as experts.

The commitment by major actors to the idea of market mechanisms is met with, if hardly balanced by, opposition coming typically from smaller NGOs and individuals. Apart from disapproving the ‘risks, the speed and uncritical enthusiasm’ for the market mechanisms (that is, their operationalization),^{Footnote 78} they disagree with the general ideology that promotes the use of market mechanisms.^{Footnote 79} They contend that these mechanisms:

Opposition towards market mechanisms is directed towards the perception that these mechanisms are legitimizing certain values (privatization, new technologies), principles (property rights) and worldviews (commodification) while effectively eroding others (justice, sovereignty, rights), which were previously also accommodated within the legal discourse.

Transnational market mechanisms are legally applicable only between the contracting parties, but these agreements spread a paradigm to which many may be opposed. These controversial structures may not have been formally endorsed by the intergovernmental decisions, they may be a voluntary arrangement or still be in an experimental period, but transnational coalitions strike deals that enable mechanisms to operate and generate increasingly sophisticated rules that shape the likely future design of regulatory tools. Even though individual deals are negotiated, the very existence of market mechanisms is not.

Moreover, market mechanisms present some straightforward challenges to positive law. For instance, they implement a wholly new approach in relation to the responsibility to pay and the distribution of benefits arising out of environmental protection. The ‘polluter-pays’ principle, one of the core principles of environmental law, is effectively being substituted by the conceptually contrasting principle of ‘beneficiary pays’, fundamentally changing the nature of the flow of benefits and the perception of responsibility.^{Footnote 81} Continual claims of the implementation of objectives of international law by the institutions running market mechanisms may obscure substantive deviations from the principles established in international environmental law. Eager to see some activity, states seem to mind neither a competing form of rule-making by transnational networks nor the substantive challenges to established norms.

4.1. Biodiversity Markets and ‘True’ Markets

Although the processes described above revolve heavily around markets both conceptually and semantically, this central concept is rarely specified and dealt with. Claims that biodiversity markets are ‘hard to define, fragmented, swiftly changing, and opaque’ are unhelpful in a framework that sets out to describe them.^{Footnote 85} It is staggering that so little clarity and precision is poured into the terminology that underlies this regulatory framework.

In one of the rare attempts to introduce precision, ‘market based instruments for biodiversity’ are described as ‘incentive systems that operate through establishing prices for environmental services, via a market. The markets in question are either established ones … [or] “created”, usually with some form of encouragement from government – as in the case of habitat banking’.^{Footnote 86} In the policy literature, ‘market mechanisms’, ‘market-based instruments’, ‘economic incentives’, and ‘economic instruments’ are all used to describe an alternative to direct regulation.

Behind these labels, however, different types of market are represented. The instruments that are categorized as market mechanisms in policy and the academic literature include tradable permits or biodiversity offsets, conservation easements, payments for ecosystem services, subsidies, taxes, charges and fees, eco-labelling schemes, performance bonds, deposit and refund schemes, liability and compensation funds, and financial mechanisms.^{Footnote 87} Many different dividing lines could be used to classify these categories. The type of currency traded may vary from a habitat or species to an ecosystem service; a scheme could be voluntary or mandated by a regulatory requirement, its scale local or global; the role of the state in establishing and supporting the scheme could be weak or strong, and types of (dominant) actors may differ from NGOs, communities and businesses.

The literature on ‘market mechanisms’ in biodiversity speaks about arrangements that are based on very different theoretical underpinnings. Using the same tag for diverse programmes and products makes little sense from the point of view of economic theory.^{Footnote 88} Reliance on ‘markets’ corresponds with a generic understanding of markets in economics as ‘mechanism[s] through which buyers and sellers interact to set prices and exchange goods and services’.^{Footnote 89} But present biodiversity markets almost invariably fail to comply with the notion of a competitive market, which is determined by the existence of a sufficiently large number of buyers and sellers who cannot influence the price of the good or service.^{Footnote 90} Thus, instead of truly competitive transactions, the current deals are much better described as negotiated agreements between ecosystem service providers and users.^{Footnote 91} Schemes with a single buyer – for example, a government, water company, electricity producer or tourism operator – are frequent.^{Footnote 92}

What all of the ‘biodiversity market’ arrangements do seem to share is a price component^{Footnote 93} or a payment that is used for the protection, restoration, or management of biodiversity.^{Footnote 94} For this to take place, some sort of economic valuation is inevitably involved.

The usage of the term ‘market mechanisms’ is therefore a convention rather than a reflection of any specific and comprehensive determining features beyond price or payment. Current biodiversity markets are sustained by a belief in the markets and the confidence that they are likely to operate according to the rules of markets in the future rather than functioning in such ways in the present.^{Footnote 95} Conditions for the operation of competitive markets in existing biodiversity market mechanisms are still far away. They would involve setting up more precise legislative frameworks, improving the processes of monitoring, reporting and verification, and not least also safeguards to ensure environmental integrity and just outcomes for those involved.

At this stage, ‘biodiversity markets’ may be said to refer to any process, including discursive practice, which employs the principles of economics to appeal for action. When viewed in this sense, ‘biodiversity markets’ build on the ability of economic instruments to communicate clearly the impacts of biodiversity degradation and create a sense of urgency. In so doing, they have diversified the vocabulary as the means of persuading stakeholders and have formed a new instrumental-value register in biodiversity governance, ostensibly more influential for the broader public, politicians and business leaders than the purely ethical-political articulations.^{Footnote 96}

4.2. Market Mechanisms in Regulatory Choice Scholarship

‘Market mechanisms’ form an established category in the debate about regulatory instruments in environmental law.^{Footnote 97} Here, too, the literature refers to an extremely heterogeneous group under the same label. The underlying logic of economic incentives lies in the fact that it uses markets and market signals, rather than government intervention through explicit directives, to oblige actors to reach the set targets or achieve the desired behaviour.^{Footnote 98} Implicitly, the category of market mechanisms represents an alternative to both public payments and prescriptive regulation, and is also a synonym for ‘altering development paths’.^{Footnote 99} Frequently, the distinction between economic incentives and prescriptive regulation is difficult to expound without the opposition to its counterpart. At other times it is misrepresented as being more straightforward than it actually is. In fact, many instruments are ‘hybrids’, as many create markets while at the same time involving some kind of government intervention.^{Footnote 100}

Despite the unclear boundary, there is an ongoing debate about the respective advantages and disadvantages of each approach.^{Footnote 101} Mainstream regulation scholarship still positions market mechanisms within an array of regulatory instruments that may be deployed when performing ‘regulatory choice’ for a particular environmental problem. ‘Regulatory’ or ‘instrument choice’, in the way I use it, refers to an analytical framework for thinking about the ways of improving the operation or efficacy of law, by choosing among instruments which range from prescriptive regulation to market mechanisms, ‘flexible’ or ‘information-based’ instruments and their hybrids. It debates relative and absolute merits and demerits of particular instruments in terms of objective and verifiable criteria (such as cost-effectiveness, distributional criteria and the technological innovation),^{Footnote 102} but suppresses questions of values, principles and beliefs.

Shadowing the approach by the regulatory choice scholarship, the task of a policy-maker or lawyer becomes a search for the most optimal instrument to fit the puzzle – a job that can be likened to one of craftsmanship. Among the problematic aspects of this approach is that it accelerates the perception of law as a toolbox, full of straightforward, purely instrumental tools, and capable of ‘fixing’ environmental problems through better design rather than by confronting their underlying socio-legal and ideological dimensions.^{Footnote 103}

The presumption towards using market mechanisms^{Footnote 104} has been sustained by the construction of ‘new’ and ‘better’ regulation.^{Footnote 105} Endorsement of market mechanisms is much more frequent than their problematization, despite a number of complexities and controversies involved in their transplantation to ever new jurisdictions^{Footnote 106} and new thematic areas.^{Footnote 107} Trading habitats or species, rather than air or water pollutants, has many specificities which have been overlooked.^{Footnote 108} Linking the advancement of market-based instruments to the ideology of neoliberalism is a particularly exotic scholarly venture.^{Footnote 109}

The regulatory choice debate represents only one of the possible ways of discussing the question of how to improve environmental governance. The focus on functional claims provides a distraction from examining the questions of ideological choice, the reasons for the spread of market mechanisms and the interests that they serve. It is one that implicitly invites institutions to automatically expand the choice without necessarily having to engage with the underlying normative character of new instruments. While regulatory choice may be a useful lens in some cases and its contribution to the discipline of environmental law has been noteworthy,^{Footnote 110} thinking about conservation solutions can and should proceed in ways that are more explicitly political. The suggestions to extend this analytical framework to the sphere of inter- and transnational conservation law,^{Footnote 111} however, do not demonstrate an awareness of the inherent political-economic disputes enshrined in market mechanisms.

4.3. Markets in Neoliberalism

The above-mentioned conceptions of market mechanisms can usefully be supplemented by the one constructed by critics of neoliberalism. The latter form a diverse group of scholars from across the social sciences, whose object of confrontation is a term that is notoriously difficult to define. Neoliberalism has become a catch-all term describing a number of approaches, distinct political positions, discursive practices and institutional features across different disciplines. This suggests that neoliberalism should not be thought of as a fixed notion but as ‘a loose conglomeration of institutions, ideas and policy prescriptions’.^{Footnote 112}

Whatever the focus of analysis, critiques of neoliberalism originate from the realization that markets, while neither ‘natural’ nor ‘neutral’, represent a key organizing principle of the neoliberal tradition. On this view, the troubling aspect is not so much the fact that free markets underpin economic relations, but rather their expansion and control over non-economic spheres, coupled with the government’s role being restricted to enabling the operation of the markets rather than providing limitations and guidance to them.^{Footnote 113} Markets can indeed become an organizational pattern of political and social relations in societies and thus ‘a comprehensive mode of governance’, determining ‘how should we live’ and ‘who should pay’.^{Footnote 114}

Building largely on the work of Karl Polanyi, critics of neoliberalism reject the separation of economic relations from broader structures of normative guidance. They lament that society has been led to run as:

According to the critics, neoliberalism and markets are accused of undermining other social processes and relationships. They are viewed as devaluing social justice, solidarity, equality and mutual care, and nurturing instead relationships that are de-personalized, narrowly individualistic, egoistic and rational.^{Footnote 116} They are disliked for seeking to supplant the commons and the collective, public values with private property, and individualistic, private values of market rationality as the guiding principles of all policy and everyday life. Neoliberalism is seen as hostile to democracy and the public realm, which encompasses public interest, public services and a collective identity.^{Footnote 117} The opposition to neoliberalism is foremost a rejection of a general deployment of economic, managerial, technical and seemingly rational discourse as the dominant framework for decision-making, and a rejection of a de-politicization of issues.

4.4. The Neoliberalization of Nature

In the field of biodiversity conservation, critiques of neoliberalism as an ideational project and a political programme converge on the utter rejection of the idea of ‘pricing nature’ and the refusal of efficiency as the driving principle of the market. In their view, putting a value on endangered species and habitat and turning them into marketable assets turns nature into a commodity, which can be exchanged like anything else on the market, and forbids any place or species their existence in their own right.^{Footnote 118}

The neoliberalization of nature is associated also with the process of the valuation of nature, being a condition for market transactions. Although ecological economists have made much progress in recent years, biodiversity valuation remains methodologically challenging. Generally, the production and use of numerical data tends to (radically) simplify ecological and social complexities.^{Footnote 119} Environmental valuation is also highly culturally or value specific in that the results depend on the conceptions of what constitutes value in society.^{Footnote 120} For many, the very attempt to crunch unquantifiable values into numbers implicitly represents the imposition of a particular political economy. Therefore, valuations are inherently a matter of bargain or domination, particularly in the case of transnational payments.

Critics further contend that market mechanisms shift morality from de-ontological to consequential, where conservation practices are pursued not because they are the right thing to do but because or when they make economic sense.^{Footnote 121} This new ethics proffers the imagery of nature as a repository of resources rather than as a ‘responsibility’ under our stewardship. It removes the moral stigma associated with environmental degradation and effectively creates a ‘right to pollute’, where pollution is not deplorable but (simply) costs money and can be bought or sold like any other commodity.^{Footnote 122} It also affects the aim of the policy that governs nature, which is no longer to prevent the degradation of nature, but to do so only when it pays. In theory at least, this can lead some (richer) actors to use nature as they please, regardless of its public benefits.

The ideology of neoliberalism is also criticized for placing emphasis on action rather than reflection, and on means rather than ends.^{Footnote 123} As such, the purpose of policies concerned with markets is not to minimize the environmental impact, but to continuously maintain a level of economic activity. The inherent conflict between the market rationale and the objective of reducing environmental impact becomes most striking when ‘successfully operating markets’ result in harmful environmental outcomes.^{Footnote 124}

Perhaps most importantly, the focus on putting market mechanisms into effect pushes attention away from structural changes, which many believe are the only solution to the global problem of biodiversity loss. When market mechanisms are operating, the illusion is sustained that something is being done about environmental protection and that the existing economic framework and institutions allow for environmental progress. The illusion is a distraction from the fact that ecological limits or ‘planetary boundaries’ represent physical limitations to any human activity, including the economy.^{Footnote 125} Demands for radically different economic trajectories – such as to keep oil, gas and coal in the ground, rather than offsetting their use – do not materialize through the operation of market mechanisms. An alternative to market mechanisms could start from considerations about ecological limitations and adjust consumption patterns accordingly.