Sustainable markets can be defined as systems or institutions where the exchange of goods and services occurs with a sustainable, ethical, and environmentalist mindset. Sustainable markets differ from traditional economic markets, as they aim to reflect the true costs of natural resource degradation, environmental pollution, and safe labor practices.
To transition to sustainable markets, the use of market governance mechanisms (MGMs) to change the behavior of economic actors has been considered. Examples of sustainable market MGMs include could include fair trade certifications, sustainable production reporting, carbon taxes, pollution control subsidies, and payments for ecosystem services.
Sustainable market discussion has been limited towards theorizing and debating how to best reach sustainability goals like carbon neutrality. Within discussions, there are questions about the appropriate use of policy instruments or mechanisms, and for which context. In particular, there are debates over which nations, and their respective markets, should face the harshest MGMs, and whether it is ethical to impose market restrictions on developing countries if it comes at the cost of the quality of life of their citizens. These also involve wider debates over how economic globalization and trade can benefit countries where local capacities or institutions are weak.
Broader questions remain over the ability of sustainable markets to fully account for environmental costs, such as pollution and ecosystem collapse. Debates about the main focus of economic models, such as GDP or social wellbeing, also exist. There have been suggestions that a move away from a GDP focus is required for environmental prosperity.
A number of organizations are working in the sustainable markets field.