• The development of the beginnings of a body of knowledge about how particular institutional types can effectively sustain resources.

  • Recognition of the importance of locally based and self-organized institutions for monitoring and controlling resource use.

  • Recognition of the ways that higher-level institutions can constrain and enable local ones.

Knowledge is not yet adequate to match particular institutional types appropriately to resource types and social settings or to identify effective ways of linking institutions across levels to maintain particular resource types.

Market Mechanisms

Property rights research also has led to research on market-based policies. Recognizing that in many situations neither local-level management nor command-and-control solutions may be effective or feasible, researchers have focused on the use of exclusive tradeable property rights or privileges in environmental management.97 In marine fisheries, long plagued with open-access problems, individual transferable quotas have become increasingly popular. Research shows some economic benefits but mixed results with regard to creating incentives for conservation.98 Emissions trading has been shown to reduce the costs of regulation. 99 Experiments have been under way to apply this idea internationally, for example, by using international carbon emissions offsets to help developing countries finance environmental regulation.100 Distributional effects of trading are major issues for both fisheries and emissions regulation.

Research on modifying the ways in which markets allocate environmental resources has significant insights to offer in responding to global change. Some of this work is based on estimating the full social value of an environmental resource and instituting taxes or other financial incentives to bring the resource's price into line with its social costs. Important advances in the area of market mechanisms include indications that market-based policies (e.g., transferable quotas, emissions trading) have significant cost advantages in theory and in some applications and recognition that the effects of these policies are situation dependent. Knowledge is not yet adequate to meet several critical needs for understanding how market mechanisms would work in practice, such as estimating distributional effects of particular market-based policies and matching market-based policies to resources and social and political conditions for optimal effectiveness.

Valuation of Responses to Global Change

Responses to global change require that decision makers face important questions of resource allocation: How can decisions appropriately take into



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