This is the approach used for one-off and biobanking offsets where prices are determined through the exchange process. The other is to require payments in-lieu from firms which cause biodiversity loss through development projects and then use the proceeds of the payment to meet the environmental objectives of the scheme. Each approach has different consequences for the evolution of offset prices and the overall cost-effectiveness of outcomes. In general, the level of competition in the offsets exchange process plays a central role in the cost-effectiveness of outcomes.