New institutional economics and its forerunners have, we argue made important contributions to the evolving agenda of ecological economics. The conceptualisation of environmental problems as instances of interdependence and the acknowledgement of positive transaction costs are key insights into the nature of environmental problems. We also discuss how plurality of behavioural motivations and limited cognitive capacity have important implications for environmental decision making and its analysis. We show how evolutionary and collective action theories offer complementary takes on the choice and change of environmental governance institutions and how the concept of social capital can enrich analyses of environmental governance. We conclude that an emerging institutional ecological economics has the greatest relative advantage in analysing the design, implementation and effectiveness of environmental governance solutions.