The Conservation Leadership Council has commissioned policy papers from leading academics and policy experts, offering an in-depth examination of conservative solutions to environmental issues ranging from energy efficiency and habitat conservation to land stewardship and water quality.
These papers – which offer practical and workable policy solutions – explore market-oriented approaches, private-public partnerships and other innovative solutions that advance the current conservation conversation and help solve our nation’s environmental challenges.
The CLC’s goal is to advance innovative, solutions-oriented, environmental and conservation policies at the local, regional and national levels. These papers are intended to stimulate policy conversations and thought and do not necessarily represent policy positions of the council or individual members of the council.
Technologically, we are on the threshold of advances in electricity that have the potential to profoundly change our lives. For it to happen, we must overhaul an outdated regulatory structure that was designed in the days of Edison and Tesla, when electricity’s greatest challenge was to encourage the laying of wires. It must be replaced with an architecture that encourages and rewards experimentation and product development by a multitude of players within a vibrant, robust marketplace.
With two-way electricity distribution, digital technology and an integrated grid system, we may soon think not so much of “electricity,” but, rather, of “energy – a commodity platform in which each of us will be both buyer and seller (and, for some of us, producer as well).
Imagine your home equipped with solar generators that power both your house and your car, with excess kilowatts sold in a healthy retail market with the distribution company providing a market platform. Think of devices within both your home and your car that will monitor and adjust your energy usage — both stationary and mobile — so you can maximize energy efficiency effortlessly.
The effect could well be transformative, portending enormous improvements in energy efficiency and, with them, significant reductions in carbon emissions. Products will be invented, services developed and jobs created.
The technology already exists. What is standing in the way is a regulatory structure better suited to the electricity markets of 100 years ago.
During the infancy of electricity, our greatest obstacle was to amass the massive capital resources needed to generate and distribute a reliable, safe and affordable power supply. Quite literally, we had to build an entire infrastructure, from the bottom up: power generators, transmission facilities, even the poles and wires that delivered electricity to our individual homes and businesses. Our singular policy goal was to incentivize the capital investment needed to assure safe, universal service at an affordable price.
Electricity was linear and vertically integrated, with electric companies providing every element of the product, from generation through transmission and distribution to retail. Electric companies developed into geographically contiguous, integrated enterprises that provided a basic, uniform and high quality service at a price the consumer could afford.
Sustaining such a large-scale, vertically integrated market structure required legal barriers to entry that protected the electric companies from competition. The regulated monopoly model maximized economies of scale, keeping costs low and stable for consumers.
Thanks to technological advances, however, the traditional electricity grid has been transformed: what was once a linear, one-way delivery of electricity from generators to the public has instead started to morph into a meshed, integrated electricity network marked by multi-directional flows.
Thanks to these advances, products and services like residential solar, microgrids and energy management devices are already available, with others just over the horizon — provided we can modernize our regulatory structure to keep paces with our technological advances.
What is needed today are incentives for new participants to enter the marketplace, not restrictions. For us to enjoy the fruits of the technological innovations that have already taken place, we must encourage our brightest minds to develop all manner of goods and services, both within the network and at its edge.
At stake is not just lower-cost electric power and a cleaner planet; in the balance, ultimately, are untold thousands of jobs in new industries that today we cannot even begin to imagine.
Let’s learn from the lessons we were taught from development of the internet: minimal barriers to entry and incentives to innovation and experimentation led to an astounding array of goods and services – from Amazon to Uber and everywhere in between. A regulated monopoly, with cost-plus pricing and legal barriers to entry, would have suffocated these developments.
If our successes (and our failures) in adapting to the transformative technologies of the internet taught us anything, we will undertake a new regulatory structure for energy that is more suited to the challenges of the 21st Century than those of the 20th.
This paper examines the issues raised by changes in water quality for the prior appropriation doctrine. It presents a conceptual model of the issue with a framework for possible ways to incorporate water quality into existing water rights. Those possibilities are then considered in the context of a specific case study where water quality is an issue—the Tongue River in southeastern Montana.
This paper provides an overview of the design of property rights in fisheries and discusses the efficiency and distributional implications of alternative design choices.
This paper develops voluntary and information-based policies that hold great promise for feasible, substantial, and sustainable conservation gains by supporting a limited role for government, catalyzing and guiding entrepreneurial energies, and enhancing personal (and corporate) accountability for environmental impacts.
This article makes the following key points:
- The stimulus policy related to green technology or clean energy broadly recognized the need to include market participants like venture capitalists. However, the policy failed to incorporate necessary market dynamics, which made the policy less likely to succeed.
- An alternative policy of providing funds to States as block grants would be an incremental improvement. Such a policy introduces an element of competition and diversification. The policy, though, is still susceptible to some of the same flaws as the stimulus policy, although likely on a smaller scale.
- A preferred alternative policy is for the federal government to auction funds for green technology investment to venture capital organizations. This policy separates the federal government from the end users of the funds and limits government interference in the marketplace. Further, the policy maintains the beneficial competitive dynamic and resource allocation efficiencies of free markets.
Despite their ecological and economic importance, Florida’s coral reefs are teetering on the verge of collapse. Scientific studies point to the impact of effluent discharges from municipal storm and wastewater treatment facilities along the coast. Other reports document the physical destruction caused by boat groundings, fishing equipment, and recreational divers. Policy makers seeking to reverse the coral decline are contemplating additional regulations on coastal point sources, increased fines for boat collisions, and extended Endangered Species Act protections. All regulatory in nature, these policies are aimed at equating the private and social costs of reef deterioration.
This report explores the viability of an alternative framework for managing Florida’s coral reefs, one based on clearly defined, secure, and transferable property rights. Rather than relying on the political process to determine the optimal level of reef protection, such property rights would allow voluntary trades to occur between competing reef users, namely divers, anglers, boat captains, conservation organizations, and coastal communities. Already, conservation entrepreneurs have developed methods for growing imperiled coral species in nurseries and replanting them on reefs. A market-based management approach that rewards this kind of innovative stewardship—and creates accountability for reef deterioration—has greater potential to enhance Florida’s coral resources than the command-and-control policies currently under consideration.
Reed Watson is a research fellow and the Director of Applied Programs at PERC. He is also the Director of PERC’s Enviropreneur Institute. Reed’s expertise lies in developing and promoting market‐based solutions to natural resource conflicts, particularly for water and wildlife. With Terry Anderson and Brandon Scarborough, he coauthored Tapping Water Markets (RFF Press/Routledge). Independent of PERC, Reed consults resource managers, policy makers, and conservation organizations on environmental resource valuation and deal structuring. He has completed consulting projects in Washington, Idaho, Montana, Louisiana and Florida. Watson holds a J.D. and M.A. in Environmental Economics from Duke University and a B.S. in Economics from Clemson University. Reed lives in Bozeman with his wife and two dogs.
Brett Howell received his MBA from Leeds School of Business in May 2010 with a concentration in Real Estate and Sustainability. Brett joined the Georgia Aquarium in October 2011 as the Walker Conservation Fellow with support from the Alex C. Walker Foundation to explore applying market‐based approaches to making coral reef restoration financially sustainable.
In June of 2012, the world mourned the loss of the giant tortoise, Lonesome George. The 100-year-old tortoise lived in the Galapagos and was believed to be the last of his sub-species. George served as an ambassador for endangered species—especially in Ecuador where many groups are working to restore not only tortoise populations throughout the archipelago but also to improve the status of other rare species.
There is much to be learned from Lonesome George. Perhaps the most critical lesson is that we must engage in conservation activities prior to a species becoming critically endangered if we want to help ensure its survival. Acting late is risky and expensive; but individuals respond to incentives and require a carrot or a stick to act early to conserve species.
The federal framework for species conservation in the United States—the Endangered Species Act (ESA)—is often characterized as a reactive tool. A system of positive incentives for environmental stewardship upstream of listing under the ESA could enhance the nation’s framework for species conservation by motivating proactive species management and removing perverse incentives for landowners.
Consider species like the gopher tortoise, the greater sage grouse, and the lesser prairie chicken. These species are considered by the USFWS to be biologically imperiled to the point of needing ESA protections. In at least parts of their ranges, however, the USFWS is precluded from listing these species under the ESA due to higher priority actions and agency funding constraints. Until resources are available to initiate a formal listing, these species wait on the “Candidate” list. Waiting on this list equates to regulatory limbo—the species are biologically threatened or endangered, yet receive no legal protection at the federal level.
The incentive-based approach to pre-listing conservation is commonly referred to as “advance mitigation” or “candidate conservation banking.” By aligning the interests of project developers, private landowners, conservation advocates, and the USFWS, this approach can complement and improve the performance of existing ESA programs by mobilizing actions that achieve net conservation benefits for at-risk species before they are listed.
This paper offers a summary of the three generations of the Endangered Species Act followed by a discussion of the benefits and hurdles of pre-listing conservation strategies—primarily in the form of pre-listing conservation banking. The incentive-based approach for the conservation of candidate species is highlighted by a brief case study on the eastern population of the gopher tortoise. Specifically, pilot partners are working with the U.S. military, which is trying to proactively manage gopher tortoise habitats before federal listing under the ESA becomes necessary and potentially leads to a loss of training capacity on bases. The paper then suggests that this model can be replicated in other parts of the United States dealing with candidate species such as the lesser prairie chicken and greater sage grouse.
Laura Huggins is a research fellow and director of outreach with the Property and Environment Research Center (PERC) as well as a research fellow at the Hoover Institution at Stanford University. Laura coauthored with Hoover senior fellow Terry L. Anderson “Property Rights: A Practical Guide to Freedom and Prosperity” and “The Property Rights Path to Sustainable Development,” which appeared in The Legacy of Milton and Rose Friedman’s Free to Choose: Economic Liberalism at the Turn of the 21st Century (2004). In 2007, she coedited with Anderson and Thomas “Power Accounting for Mother Nature: Changing Demands for her Bounty”. Most recently, she coauthored with Anderson “Greener Than Thou: Are You Really an Environmentalist?” (2008). Laura is primarily interested in the role of economic processes in shaping natural resource policy and in promoting market principles to a wide audience to help resolve environmental dilemmas. She holds an M.S. degree in public policy from Utah State University. Laura and her husband live in Bozeman, Montana, and have two vivacious young children.
The United States can move toward a goal of energy security through a combination of energy efficiency and renewable energy strategies. While both energy efficiency and renewable energy strategies are essential in order to enhance energy security, energy efficiency strategies remain the fastest, cleanest, and lowest-cost way to reduce the nation’s demand for energy, including fossil fuels. Since buildings consume approximately 40% of all energy in the country—more than any other sector including transportation—retrofitting the built environment and making buildings more energy efficient are essential parts of the solution. A 2009 McKinsey Report estimates that a U.S. investment of $520 billion in energy efficiency building retrofits would result in savings of $1.2 trillion by 2020. Additionally, such an investment would reduce energy consumption by 23%. In order to achieve these goals, new sources of capital need to be identified, and property rights issues such as split incentives, where the investor of the capital does not receive the financial benefits of the investment, must be resolved.
The following paper focuses on new sources of capital for building retrofits, specifically program related investments. We outline the problems that arise from dependency on importing fossil fuels; explain the mechanics of retrofits; and explore how a specific impact investing tool—program related investments—can be used to finance building improvements and retrofits. Ultimately, retrofitting the built environment through energy efficiency projects improves national security, creates American jobs, reduces energy bills, lowers emissions, decreases infrastructure costs, and improves air quality.
Dr. Stephanie Gripne a Research Fellow at the University of Denver Daniels College of Business and Director of the Sustainable Finance Collaborative where she researches and teaches the topics of impact investing and philanthropy and is developing the first academic research project on Program Related Investments. Stephanie is also serving as Interim Executive Director for the Alliance for Sustainable Colorado and is the founder of the Compatible Ventures, LLC. Stephanie is also a visiting professor at Virginia Tech’s College of Natural Resources teaching courses in Ecosystem Services, Carbon, and International Conservation Issues. Previously, Stephanie was responsible for Operations of the Eco Products Fund LP, a $100 million private equity fund jointly managed by New Forests Inc. of Washington, D.C., and Equator LLC of New York City. Prior to the Eco Products Fund, Stephanie worked for The Nature Conservancy of Colorado where she focused on conservation real estate and conservation finance strategies that aimed to monetize ecosystem revenue streams. Stephanie has over 15 years of experience working in the natural resources arena for the USDA Forest Service, DOE Oak Ridge National Laboratory, the Journal of Wildlife Management, the Bureau of Land Management and several universities. Stephanie received her PhD from the Boone and Crockett Wildlife Conservation Program at the University of Montana and focused on conservation finance, conservation real estate and economic strategies that provide nonmarket goods and services. She has a Bachelor of Science in Biology and Wildlife Management from the University of Wisconsin at Stevens Point and a Masters in Ecology from Utah State University. Stephanie is an Aspen Institute Environment Forum Scholar, Environmental Leadership Senior Fellow, Property Environment Research Center Fellow and Advisory Council Member, Ford Foundation Community Forestry Fellow, and Boone and Crockett Professional Member. Additionally Dr. Gripne serves as a Board Member for local and national organizations and a Foundation. Finally, in partnership with Katie Kross, Dr. Gripne provides national career coaching advice to individuals interested in the field of business and sustainability.
Dan Last is a Senior Manager at AtSite, a Building Performance Company that maximizes the strategic value and performance of real estate and facilities. Dan works primarily with educational institutions helping them reduce energy use, save money, and improve the learning environment for students. He is also the Co-Chair of the Green Schools Committee at the National Capital Region Chapter of the United States Green Building Council. Previously, Dan worked in admissions at Endicott College, and as a member of the English faculty at Avon Old Farms School in Avon, Connecticut. He has a MBA from the Leeds School of Business at the University of Colorado, Boulder, an M.Ed from Boston College, and a B.A in English and B.S. in Management from Boston College.
The ongoing fiscal challenges facing state governments are creating an existential crisis for state parks. With budgets stretched increasingly thin, state parks must compete for limited funds with other—often higher—policy priorities like education, health care, public pensions and public safety. These budget pressures have prompted policy makers in California, New York, Florida, Arizona, Georgia, Massachusetts and other states to close or significantly reduce services in hundreds of state parks, or at minimum reduce parks budgets, nationwide. In other states, like Washington and South Carolina, governors and legislatures have recently launched efforts to require parks to become self-sufficient to wean them off state appropriations, in seeming recognition that parks funding will increasingly be crowded out by other spending priorities.
Beyond the threat of closures, the ongoing economic malaise has exacerbated a widespread, pre-existing problem of inadequate and deferred maintenance in state parks, which only serves to accelerate their decline. A 2010 report by the National Park Service found that states had identified $18.5 billion in unfunded needs for parks and recreation. The National Trust for Historic Preservation noted in 2010 that over half the state parks systems are “at-risk,” which means that state-owned and -managed parks and historic sites are facing major budget cuts. For example, the California State Parks System accumulated over $1 billion in deferred repairs and maintenance; and that’s not to mention the significant hurdles covering operational costs across the system.
Yet state parks remain popular while their maintenance needs continue to worsen; according to America’s State Parks Foundation, state parks received 725 million visitors at over 6,000 sites around the country in 2010 alone.8 Can this popularity be turned from a cost into a benefit? One way to keep state parks open without imposing additional burdens on the taxpayer is to utilize public-private partnerships (PPPs). Many states already successfully use private concessionaires to provide piecemeal services within parks—including food, retail, lodging, marinas, and other commercial activities—so a shift to more extensive involvement can build on that. Such a whole park operation PPP would transfer the responsibility of maintaining the park to a private operator, while enabling that operator to raise revenue through entrance and other fees. This paper seeks to describe such a model and explain how it can best be applied.
The paper begins with an outline of the basic park operation PPP model. It then explains how the model was developed in the context of Forest Service recreation areas. The next part offers insights into how to set contract terms in a Park Operation PPP. We next describe an application of the park operation PPP model to California. We follow with an overview of the status of park operation PPPs in various other states and offer some concluding remarks regarding the future application of the park operation PPP model.
Leonard Gilroy is the Director of Government Reform at Reason Foundation; he researches privatization, government reform, fiscal, transportation, infrastructure and urban policy issues. In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie. Prior to joining Reason, Gilroy was a senior planner at a Louisiana‐based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.
Harris Kenny is a state and local government policy analyst at Reason Foundation. He also serves as co‐editor of Reason Foundation’s Annual Privatization Report and Innovators in Action publications. Prior to joining Reason Foundation, Kenny worked at the Los Angeles Economic Development Corporation. He earned a B.A. in Economics from Pepperdine University, where he worked as a research assistant to Dr. Luisa Blanco at Pepperdine University’s School of Public Policy.
Julian Morris is vice president of research at Reason Foundation, a non‐profit think tank advancing free minds and free markets. Julian graduated from the University of Edinburgh with a Masters in economics. Graduate studies at University College London, Cambridge University and the University of Westminster resulted in two further masters’ degrees and a Graduate Diploma in Law (equivalent to the academic component of a JD). Before joining Reason, he was executive director of International Policy Network, a London‐based think tank which he co‐founded. Before that, he ran the environment and technology programme at the Institute of Economic Affairs, also in London
Can we meet national energy priorities without destroying Colorado’s landscapes? Can we protect wildlife species and Colorado’s agricultural future without sacrificing energy security?
Partners for Western Conservation is leading the creation of a Colorado-based ecosystem services market that, unlike regulatory approaches, works by creating incentives for buyers (e.g., energy companies) and sellers (e.g., ranchers) to invest in protecting wildlife and their habitat before there is a need to list under the ESA. Called the Colorado Habitat Exchange, this program is one of the first of its kind in the country to address the complexities of balancing national energy needs, the environment, and food security.
The Colorado Habitat Exchange works by linking investors or buyers with sellers—the ranchers and farmers who manage, restore, and protect habitat. Every transaction must result in a net benefit to the species.
While the Colorado Habitat Exchange will initially focus on greater sage grouse, it will be a useful model for a market-based conservation approach that could be applied in the future to other types of ecosystem services like clean air and clean water. The key to expanding ecosystem services markets will be to align economic interests of both buyers (e.g., developers) and sellers (e.g., ranchers and farmers) with environmental outcomes. To advance markets for additional wildlife species, water, and air, we need only develop objective measures of environmental impacts and outcomes—the natural accounting that allows us to reconnect the economy and the environment.
The Colorado Habitat Exchange can provide an example for a nation struggling to balance ever-rising demands for home-grown energy with the need to protect our air, water, and landscapes. This transferrable ecosystem services market model fills a void left by traditional conservation and preservation approaches because it provides tangible, measurable, meaningful results to all involved—developers looking for assurances and predictability, farmers and ranchers looking for innovative ways to stay in business, and society looking for the benefits of domestic energy production without the environmental costs.
Terry Fankhauser grew up on a cow‐calf operation in the Flint Hills of Kansas. Terry joined the Colorado Cattlemen’s Association (CCA) as the Director of Membership in 2000 where he worked with membership recruitment and retention, industry issues and served as a beef quality assurance coordinator for Colorado. He was named Executive Vice President of CCA in October of 2001. Prior to his tenure at CCA, Terry worked as a ruminant nutrition consultant throughout Kansas, Wyoming and Colorado. He has a Master of Science in Ruminant Nutrition and Management and a Bachelor’s degree in Animal Sciences, both from Kansas State University.
The Blackfoot Watershed of western Montana is a 1.5 million-acre landscape of diverse habitats worked by ranchers, loggers, and outfitters in partnership with public land managers to provide a refuge for wildlife, including grizzly bears, Canada lynx, fisher, gray wolves, bull trout, and migratory birds such as the trumpeter swan. Escaping the rapid land use changes facing many other valleys in the West, the Blackfoot remains working and wild, much like it was when the early pioneers put down their roots. This is no accident. Those who call the Blackfoot home or occasionally visit, who love it and whose livelihoods depend on it, have built partnerships to conserve the rural and natural values of this special place.
The name “Blackfoot Challenge” comes from an observation that the mix of public and private landownership in the Blackfoot Watershed would present a challenge in finding consensus for resource management decisions. However, this became an opportunity to leverage public and private resources and cooperatively work together. Such social underpinnings are at the core of community-based conservation and address the need to shift from “biologist-centric” to “partner-centric” conservation planning and implementation. Conservation success depends heavily on the art of working with people where private and public interests are coordinated.
By leveraging resources through community-based efforts in the Blackfoot Watershed, the coordination of private landowner and public manager partnerships has now protected 231,795 acres of working land since 1993. In addition, these protection efforts, along with significant restoration and stewardship activities, are now recognized by the Montana Department of Natural Resources and Conservation as serving the downstream public with a measured increase in water quality of the Clark Fork of the Columbia River Basin at the confluence with the Blackfoot River.
The community-based approach to conservation serves as a national model to spur efforts to conserve vital wildlife habitat and working land through collaborations of private landowners, conservation groups, and state and federal agencies.
Gary Burnett grew up in rural Illinois, the son of a farm advisor and teacher. He joined the Blackfoot Challenge as the Executive Director in May 2007. Gary received a B.S. from the University of Illinois in 1977, and a M.S. in wildlife biology in 1982 from the University of Montana. He has worked for Plum Creek Timber Company and the Illinois Nature Preserves Commission, assisting both public and private landowners/managers in land protection and management. He organized over 130 fundraising events; developed and directed annual fund, major gift and planned giving programs for Rocky Mountain Elk Foundation, National Forest Foundation, Missoula Children’s Theatre and Montana Meth Project; and volunteers in his community.