Nicholas Institute for Environmental Policy Solutions
February 2018

Facilitating Markets and Mitigation: A Systematic Review of Early-Action Incentives in the U.S.

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Facilitating Markets and Mitigation: A Systematic Review of Early-Action Incentives in the U.S.
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Early action refers to activities undertaken prior to a regulatory program or generation of services prior to mitigation of impacts elsewhere. In U.S. environmental markets, early action could reduce lags in environmental performance, improve outcomes, and encourage innovation in mitigation approaches. Multiple tools have emerged for encouraging early action in environmental markets. Several tools have also been deployed in markets, providing valuable insight into their function. This article in Land Use Policy presents a systematic review of early action tools and describes their use in wetland and stream mitigation, species and habitat banking, greenhouse gas mitigation, and water quality trading. It finds that incentives necessary to motivate sellers differ from those motivating buyers. The tool or approach best suited to encourage early action also varies as conditions change. Anecdotal evidence suggests the potential for benefits to accrue from early action, but additional data are needed to inform the use of specific tools.