Are Public Ballot Measures a Better Mechanism for Conservation than Markets?
While ecosystem markets may be efficient and cost-effective in the long run, they are often driven by regulation, take considerable time and money to get going and face serious challenges to becoming self-sustaining. Conservation ballot measures are a potentially powerful complimentary conservation finance approach, but are they underutilized?
Bonds, taxes, lottery proceeds, and the like can be dedicated to a wide range of conservation goals at multiple scales. Such measures have raised more than $58 billion for conservation and have enjoyed an average 76%, recession resistant, voter approval rate (1988 to 2010).
The financial structure of these measures makes them particularly flexible and effective mechanisms for conservation. Bonds, as opposed to grants, enable public entities to quickly use dollars for land acquisition allowing governments to purchase high-priority land or conservation easements as soon as it comes on the market. Furthermore, since bond payback periods occur over a long time horizon the impact is spread out over time. Also, under current policies, many states already have the authority to authorize bonds and can grant authority to counties and municipalities to do the same.
Should we shift some of the energy we spend on establishing ecosystem markets to increasing the conservation ballot measures? Building off Sara’s Vickerman’s Soapbox on the Farm Bill, is there a way to restructure these measures to be more strategic and focused on ecological outcomes, rather than practices? While bonds are the most popular funding sources for conservation, are there better alternatives? What would this shift mean for the markets movement?
Comments
Markets are not just for
Markets are not just for mitigation. A frequent theme on this soapbox is that the term "market" is not appropriate for the primary motivation of our efforts. I think this question is a case-in-point.
Many states raise billions in bond funds and then distribute those funds either to state agencies or through grants. What do we get in return? Dollars spent. Maybe the number of projects implemented. If we are lucky the number of acres touched in some manner or another. We do not get any understanding of the environmental benefit achieved or the return on investment.
The term "market" in this post seems to assume mitigation. I completely agree that we should not be putting undue hope into mitigation as the source of restoration capital except in unique situations where there is a particular economic driver needing to be liberated with a formalized offset scheme.
The broader concept of using money - from bonds, mitigation or Farm Bill - to achieve quantified ecosystem benefits that reflect of the regional ecosystem service value is equivalently necessary in any environmental investment context. Tax payers asked to approve a bond should have confidence those funds will be spent to most effectively achieve environmental improvement in that state. Similarly, mitigation offsets should clearly be creating environmental benefit using a consistent accounting structure for the impact and the benefit.
From my personal experience we can see a multiple in the environmental return on investment from the use of bond funds when we put an ecosystem accounting structure in place and transparently report the benefits produced by projects that use these funds. You can see our illustration of the approach at http://enviroincentives.com/approach. This accountability ensures that the most effective projects are implemented with taxpayer funds.
I think that we need to use
I think that we need to use both approaches - developing payments and markets for ecosystem services, and public bonding for land acquisitions - to achieve important conservation outcomes. I agree with Jeremy's emphasis on the importance of transparency in characterizing and reporting environmental benefits from conservation projects, however they are funded. Perhaps the two approaches could be used together - if allowed, a bond issue could be made with the purpose of seeding a revolving loan fund to invest in local or regional conservation projects projects designed to conserve public ecological benefits and become self-sustaining. Effectively communicating this concept of making sustained conservation investments in market-oriented projects in their community over time, as a complement to acquisition, I think could broaden the base of support for conservation actions as an integral part of community.
Mary Snieckus
Citizen initaiitves, bonds
Citizen initaiitves, bonds and markets for ecosystem services all play a part in conservation finance. Since markets tend to be driven by regulations, they are generally not appropriate or effective for unregulated resources, like biodiversity. Ideally, every geographic region would have a conservation plan that highlights priority investments, has a system in place to track outcomes, and that taps multiple sources of revenue including bond investments, market-based payments, and incentives for private landowners. The keys to successful conservation programs that work at appropriate scales are diverse stakeholder involvement in the development of a shared vision, and cross jurisdictional cooperation in achieving that vision.
While ballot measures do
While ballot measures do provide sufficient funds to purchase lands and ecological services, they can also ironically, retard the growth of ecosystem service markets. For markets to emerge and grow they need consistent market signals that the private sector can respond to. Ballot measures fund government agencies that then dole out funds under a political umbrella. Private entities that understand government-based economic systems and are plugged into it can profit and even provide a relatively cost effective means to spend those dollars. But these expenditures are often project-based land purchases that cover a relatively small percentage of the land base. The large lumps of funds that non-profits and governments are familiar with actually hinder businesses and markets that depend on a flow of currency. Markets need to be open and function not just under these macro-economic policies and procedures of government agencies, but need to be accessible to all land managers/owners.
I think we need to allow corporate sustainability policies to mature a bit more to see how it can integrate with government conservation programs. If so, the markets may begin to recognize a "symbiotic" demand of ecosystem services that allows procurement of ecosystem services at a lower price while increasing the value streams to land managers. Ecosystems are all about symbiosis and it seems paradoxical that we don't include this great value into ecosystem markets. Once these emerging markets find their footing, then ballot measures could enhance ecosystems by stacking projects atop this buzzing market baseline.