REVIEW PAPER Market-based mechanisms for biodiversity conservation: a review of existing schemes and an outline for a global mechanism Irene Alvarado-Quesada • Lars Hein • Hans-Peter Weikard Received: 25 April 2013 / Accepted: 20 November 2013 / Published online: 30 November 2013 Ó Springer Science+Business Media Dordrecht 2013 Abstract Continuous decline of biodiversity over the past decades suggests that efforts to decrease biodiversity loss have been insufficient. One option to deal with this problem is the use of market-based mechanisms for biodiversity conservation. Several studies have analysed such mechanisms individually, butthere is no comprehensive review with a comparative assessment of the performance of various mechanisms. This paper presents (i) an analysis of the economic conditions under which markets for biodiversity can be expected to function; (ii) an analysis of the efficiency of five selected biodiversity markets in the light of market and contract theory; and (iii) an assessment of the potential to scale up localor national payment mechanisms for biodiversity conservation. Our analysis shows the difficulties that market-based mechanisms face, among which are the need to ensure long-term conservation and the lack of a standardized unit of measurement for biodiversity. We provide a number of recommendations on how to overcome these diffi- culties. We argue that the set-up of a global registry embedded within the framework of the Convention on Biological Diversity would facilitate measurement, reporting and verifi- cation of biodiversity credits to support market-based mechanisms. Keywords Biodiversity conservation Biodiversity markets Biodivers Conserv (2014) 23:1–21 DOI 10.1007/s10531-013-0598-x