Trading for Trading for ConservationConservationTrading for Trading for

ConservationConservation

Use of Market Mechanisms Use of Market Mechanisms to Fund Forest Conservation to Fund Forest Conservation or Doing Well by Doing Goodor Doing Well by Doing Good

Use of Market Mechanisms Use of Market Mechanisms to Fund Forest Conservation to Fund Forest Conservation or Doing Well by Doing Goodor Doing Well by Doing Good

Robert B. McKinstry, Jr.Robert B. McKinstry, Jr.Goddard Prof. of For. & Goddard Prof. of For. &

Envt’l Resources Envt’l Resources Conservation Conservation

Penn StatePenn State

Environmental TradingEnvironmental Trading

• Programs allow Programs allow “marketing” of “marketing” of environmental environmental compliancecompliance

• Increasing useIncreasing use• Conservation Conservation

funding funding mechanismmechanism

Innovations for Conservation Funding

• Multi-attribute trading to Multi-attribute trading to maximize return for maximize return for conservation of most valuable conservation of most valuable lands – EESI and Rogers lands – EESI and Rogers et al.et al.

• Creation of non-profit Creation of non-profit revolving funds to leverage revolving funds to leverage land conservation - under ESA land conservation - under ESA bog turtle habitat banking.bog turtle habitat banking.

Flavors of Applicable Environmental Trading

• Air pollution Air pollution tradingtrading– Carbon trading Carbon trading

and bankingand banking

• Water pollution Water pollution tradingtrading– Nutrient trading Nutrient trading

program for program for ChesapeakeChesapeake

• Transfer Transfer Development Development RightsRights– NJ PinelandsNJ Pinelands

• Wetlands Wetlands bankingbanking

• Habitat bankingHabitat banking

Rogers’ Value Tent• Stream Stream

corridors can corridors can promote promote multiple multiple environmental environmental valuesvalues

• Support credits Support credits in multiple in multiple marketsmarkets

Value Tent

Development

Carbon Sequestration

Habitat

Wetlands

Hunting anan

TMDL

Generate Multiple Credits

Rogers 2006

Make Conservation PayMake Conservation Pay

• One market may not provide One market may not provide sufficient incentive to conservesufficient incentive to conserve

• Multiple markets may provide Multiple markets may provide sufficient financial incentive to sufficient financial incentive to conserveconserve

• Will conserve most Will conserve most environmentally valuable landsenvironmentally valuable lands

Chester County/NC County Chester County/NC County Project: Use of Habitat Banking Project: Use of Habitat Banking as a Tool for Land Conservationas a Tool for Land Conservation

Partners: Penn State, USFWS, DENREC, PA Partners: Penn State, USFWS, DENREC, PA Fish & Boat, Brandywine Conservancy, Natural Fish & Boat, Brandywine Conservancy, Natural Lands Trust, Environmental Defense, The Lands Trust, Environmental Defense, The Nature ConservancyNature Conservancy

Unique AttributesUnique Attributes

• Use of credits from sale to Use of credits from sale to replenish a revolving fund to replenish a revolving fund to fund more conservation.fund more conservation.

• Partnerships with multiple Partnerships with multiple conservation groupsconservation groups

Endangered Species ActEndangered Species Act• In 1997, the bog In 1997, the bog

turtle was listed turtle was listed as a threatened as a threatened species. species.

• Two Effects: Two Effects: “Take” and “Take” and Consultation Consultation

ESA Effects on Private LandESA Effects on Private Land

• Prohibition on “taking” includes Prohibition on “taking” includes “incidental” or accidental harm of “incidental” or accidental harm of species or harm to critical habitatspecies or harm to critical habitat

• Other federal permits or actions Other federal permits or actions require consultation if effect on require consultation if effect on endangered or threatened spp.endangered or threatened spp.– wetlands, air and water permits, wetlands, air and water permits,

stormwater permitsstormwater permits

Preferred HabitatPreferred Habitat

WetlandsWetlandsOpen forest canopyOpen forest canopy

Early succession wetland Early succession wetland meadowmeadow

Commonly associated with Commonly associated with tussock sedgetussock sedge

Pressures on the Bog TurtlePressures on the Bog TurtlePoachingPoaching Habitat Habitat Fragmentation Fragmentation & & DevelopmentDevelopment

Problems with Current Problems with Current Management under the ESAManagement under the ESA• Very little active Very little active

managementmanagement• Development Development

encroachesencroaches• Fragmented Fragmented

mitigation areas mitigation areas will not conserve will not conserve spp.spp.

Conservation BankConservation Bank

• ““Directing smaller individual mitigation actions Directing smaller individual mitigation actions into a bank streamlines compliance for the into a bank streamlines compliance for the individual permit applicants or project individual permit applicants or project proponents while providing a higher benefit to proponents while providing a higher benefit to the natural resources. Banking allows a the natural resources. Banking allows a collaboration of private/public partnerships to collaboration of private/public partnerships to maintain lands as open space, providing for the maintain lands as open space, providing for the conservation of endangered species. Local conservation of endangered species. Local communities as a whole benefit by being assured communities as a whole benefit by being assured that their natural resources will be protected and that their natural resources will be protected and open space maintained.”open space maintained.”

» Guidance for the Establishment, Use, and Guidance for the Establishment, Use, and Operation of Conservation Banks. (FWS 2003)Operation of Conservation Banks. (FWS 2003)

Banking 101Banking 101• Bank = large mitigation site with Bank = large mitigation site with

management and buffers and management and buffers and financingfinancing– developers may rely on that for quick developers may rely on that for quick

approval if they payapproval if they pay• Mitigation site will generate creditsMitigation site will generate credits

– Acres, nesting sites, burrows etcAcres, nesting sites, burrows etc– Need equivalenceNeed equivalence

• FWS determines how many credits FWS determines how many credits available and how many credits available and how many credits needed by each developerneeded by each developer– This will be done by our plan for the This will be done by our plan for the

bankbank

Bog Turtle Project ObjectivesBog Turtle Project Objectives

• Encourage creation of new Encourage creation of new conservation areas for bog conservation areas for bog turtle recovery and open space turtle recovery and open space preservationpreservation

• Transfer cost of conservation Transfer cost of conservation to new developmentto new development– Pay rather than delayPay rather than delay– Less incentive to sell property for Less incentive to sell property for

developmentdevelopment• Reduce conflictsReduce conflicts

Conservation Plan StructureConservation Plan Structure

• Conserve and manage recovery Conserve and manage recovery areas using easements, contracts areas using easements, contracts and other mechanisms.and other mechanisms.– Affirmative easementsAffirmative easements

• Establish conservation bankEstablish conservation bank– Developers may develop up to Developers may develop up to

wetlands line and permit crossings, wetlands line and permit crossings, etc., but must payetc., but must pay

• Funds in bank will be used for Funds in bank will be used for additional conservationadditional conservation

Generation of CreditsGeneration of Credits

• Developer pays for creditsDeveloper pays for credits– Number of credits required Number of credits required

depends on habitat requireddepends on habitat required– Price of credits ≥ cost of Price of credits ≥ cost of

mitigation land + PV mitigation land + PV management and enforcementmanagement and enforcement

Money Trail• Payments go to:Payments go to:

– Trust fund for Trust fund for management management and and enforcementenforcement

– Revolving fund Revolving fund for habitat for habitat purchasepurchase

• Revolving fund Revolving fund purchases new purchases new bankbank

Newpropertyfor new

Bank

Revolving Fund

Trust forManagement

BankGeneratesCredits for

sale

Developer payments

FundingFunding• Initially funded with open space Initially funded with open space

money and grantsmoney and grants– Existing easements might be used, but Existing easements might be used, but

will not due to landowner resistancewill not due to landowner resistance

• Credits sold for fund to support Credits sold for fund to support management and easement management and easement acquisition activitiesacquisition activities– May be retired or sold and used to fund May be retired or sold and used to fund

more acquisitionmore acquisition

• Initially pilot area and scaled upInitially pilot area and scaled up

Cooperative Structure• Form bog turtle conservancy Form bog turtle conservancy

for management and backup for management and backup ownershipownership

• Partnerships withPartnerships with– Existing conservanciesExisting conservancies– State and local governmentsState and local governments– USFWSUSFWS– PA Fish and Boat and DENRECPA Fish and Boat and DENREC– Development communityDevelopment community

ApplicabilityApplicability

• This project will primarily This project will primarily benefit non-forested habitat, benefit non-forested habitat, but model can be appliedbut model can be applied

• Revolving fund for credits – Revolving fund for credits – can be enhanced with multiple can be enhanced with multiple creditscredits

• Partnerships – working with Partnerships – working with existing conservancies and existing conservancies and gov’tgov’t