Market governance mechanism (MGM) is a set of formal or informal rules that have been consciously designed to change behaviour — of individuals, businesses, organisations or governments — to influence how markets work and their sustainable development impacts.Well known examples include fair trade certification, and carbon trading, for example the European Union Emissions Trading System. Other examples include payments for ecosystem services, certification schemes, subsidies, and taxes.Market-based instruments fall under the umbrella of market governance mechanisms. But MGMs are broader than market based instruments in that they also include regulatory, or command and control, approaches.
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