Price based MBIs assign a price to environmental impacts within existing markets through the imposition of positive (eg: competitive allocation of grants through tenders or auctions) or negative (eg: charges and taxes) instruments.
Land managers will respond to the modified market signals and adopt the resource use or management practice offering them the greatest benefit and, if the policy is effective, this will lead to improved natural resource management. While these instruments cannot guarantee the extent of changes, they act to cap the costs incurred under the instrument. |