Over the past decade, the concept of harnessing market forces to solve environmental problems has gained unprecedented attention at the international, national and sub-national level. This trend highlights a paradigm shift in the politics of natural resource management, since until this point market-based instruments were assumed to be of little relevance to environmental policy.

Beginning with the acid rain (NO2 and SO2 (NOX and SOX)) trading markets in the US, market-based instruments have now been applied to a range of environmental issues from emissions, to water, to biodiversity. These instruments have included, for example, environmental taxes, subsidies and tax rebates, bilateral offset programs, credit and permit trading programs, eco-labelling and certification programs, and deposit-refund and performance bond programs. Each of these instruments has the common goal of creating a price signal through regulation, rather than imposing an explicit directive on industry, in order to modify corporative behaviour. In this way, market-based mechanisms differ from both traditional 'command-and-control' regulation and voluntary mechanisms in the environmental arena.

The overall aim of this course is to identify the key elements of environmental markets and to understand what makes an effective, functioning market. We will begin with an overview of market-based mechanisms in the environmental context and a consideration of the key design features of environmental markets. The second section will examine environmental markets across a range of sectors including climate, water, renewable energy, biodiversity and salinity. The course will conclude with an examination of the commercial aspects of environmental markets and some key considerations for negotiating and contracting for environmental goods and services.

This course is also available to students enrolled in the Master of Environmental Management (8619), Graduate Diploma in Environmental Management (5499) and the Graduate Certificate in Environmental Management (7339).

Paul Curnow is a partner of Baker & McKenzie’s Global Environmental Markets practice and is a leading legal adviser on climate change. He advises on carbon, renewable energy and environmental markets. Paul is a Visiting Fellow in Environmental Markets at the University of New South Wales and Chair of the Australian Working Group, Carbon Markets & Investors Association. Paul advises government, multilateral and private sector clients on domestic and international climate change, renewable energy regulation and policy, cross-border project development and financing under the Kyoto Protocol and domestic and regional trading schemes. Most recently, Paul has been involved in a range of domestic and cross-border carbon transactions spanning the Clean Development Mechanism, Joint Implementation, EU and NSW Emissions Trading Schemes and emerging voluntary markets. He has acted on some of the earliest and largest structured carbon trades.

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