Market-Based
Solutions

Property Rights
Tradeable Pollution Rights
Pollution Rights In Practice

Some economists argue that environmental degradation occurs because of incomplete ownership of rights to use valuable resources. Many environmental resources have traditionally been commonly owned by everyone (or, alternatively, owned by no-one) and open to use by anyone. These economists say there is a strong tendency for people to overexploit and degrade common property resources because of the 'tragedy of the commons' principle.

The idea of rights-based measures is that if people have a right to the use or pollution of natural resources, they will consider the longer term and manage those resources sustainably. The idea is also to create markets so that 'the power of the market can be harnessed' to environmental goals, and individuals or firms can then use their superior knowledge of their own activities to choose the best way of meeting environmental standards.