Markets and Sustainability

Do markets lead us to make sustainable choices? If not, why not? And what would we need to do to remedy this? This paper takes a preliminary look at these questions. It identifies three categories of reasons why market choices may not be sustainable, related to valuation of the future, recognition of the benefits provided by environmental assets, and incorrect incentives. It gives examples of cases in which these problems have been corrected, and considers the scope for a more positive relation between market forces and conservation of the environment.