How Markets Work

The concept behind environmental markets is fairly simple. Empowered by lesgislation such as the Clean Water Act, Endangered Species Act and numerous other federal state laws, regulators like the Environmental Protection Agency establish water quality standards for our rivers and streams. Industries, businesses, developers and others who impose negative impacts on freshwater ecosystems must first try to avoid and minimize their impacts. Oftentimes, some impacts cannot be avoided so the regulated entity must compensate for those negative impacts in some way. Historically, the solution has either been a “built” one, like an enormous cooling tower to lower a river’s temperature, or has involved insignificant, narrowly-focused restoration projects with very little ecological value. An environmental market, using certified credits generated by large-scale restoration projects, with offset ratios that promise real net gain, allows these entities to meet their regulatory compliance needs while creating significant, verified environmental benefits.