Peat moss is often added to soil to increase the soil's ability to hold moisture. It's also added to improve the soil's structure, giving it more lightness so that more air can circulate. Air is needed by roots just as water is. Besides being added by gardeners to their soil, potting mix also often includes peat moss. Unfortunately, peat moss is a non-sustainable product. It is being harvested faster than it can replenish itself. Bogs take centuries to create peat. Luckily, substitutes for peat exist.
Coir is a product created from the short fibers of coconut husks. Traditionally, these short fibers have found no use and add to waste streams. As a substitute for peat, though, coir is transformed to a renewable soil amendment. University research has shown that coir performs as well as peat.
Compost can not only substitute for peat moss, in a lot of respects, it's better. It has more nutrients than peat, it's cheaper, perhaps even free, it can be used as mulch. Compost is made from organic matter like food or grass clippings that is left to decompose.
Companies have begun creating and offering peat moss substitutes. RePeet, made by Organix, is made from cow manure. Beats Peat is made from coconut and other products under development (NuPeat) feature newsprint.
The University of Hawaii cites a study showing that newspaper sludge performed the same or better than peat moss. Pots made from newsprint can substitute for peat pots.