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A Review of the Use of Early-Action Incentives in U.S. Environmental Markets

Early action can refer to activities undertaken prior to a regulatory program or the generation of a particular service before its use to mitigate an impact elsewhere. In U.S. environmental markets, early action can result in multiple benefits. One benefit is facilitation of market function by helping to generate a sufficient supply of viable, low-cost credits to buyers and gain momentum in new markets. Another benefit is providing advance mitigation, which can speed the delivery of ecosystem services. As markets emerge and mature, early action can help reduce lags in environmental performance, improve outcomes, and encourage innovation in mitigation approaches. Multiple tools have been proposed for encouraging early action in ecosystem services markets. To varying extents, these tools have also been deployed, providing valuable experience and insight into their functioning. This paper presents several case studies of how these tools have been used in wetland and stream mitigation, species and habitat banking, greenhouse gas emissions reduction and sequestration, and water quality trading. It finds that early action incentives necessary to motivate sellers differ from those necessary to motivate buyers and that interventions should account for this reality. The tool or approach best suited to encourage early action may also vary as conditions change and new barriers arise. Anecdotal evidence suggests the potential for benefits to accrue from early action, but additional data on the costs and benefits of early action are needed to inform the selection and implementation of specific tools.

Authors: Christopher S. Galik and Lydia P. Olander

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Ecosystem Services

Working Papers

Toward a Blue Economy: A Promise for Sustainable Growth in the Caribbean

Toward a Blue Economy: A promise for Sustainable Growth in the Caribbean, a World Bank report co-authored by a Nicholas Institute for Environmental Policy Solutions researcher, is a guide to help Caribbean policymakers plan a successful transition to a blue economy and socially equitable blue growth. This report attempts to quantify the current ocean economy in the region and summarize projections about where we may find new pockets of sustainable growth, and define the blue economy concepts and possible policy responses that might better align economic growth and environmental health in the Caribbean. At a global level, the transition to a blue economy will significantly contribute to achieve Sustainable Development Goal (SDG) 14 for the ocean and other goals such as poverty reduction, food security, energy security, climate change mitigation, among others.

Authors: Pawan G. Patil, John Virdin, Sylvia Michele Diez, Julian Roberts, and Asha Singh

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Blue Economy

Ocean and Coastal Policy

Ecosystem Services

Environmental Economics

Blue Economy

Reports

Identifying and Assessing the Application of Ecosystem Services Approaches in Environmental Policies and Decision Making

The presumption is that ecosystem services (ES) approaches provide a better basis for environmental decision making than other approaches because they make explicit the connection between human well-being and ecosystem structures and processes. However, the existing literature does not provide a precise description of ES approaches for environmental policy and decision making, nor does it assess whether these applications will make a difference in terms of changing decisions and improving outcomes. This article in Integrated Environmental Assessment and Management describes three criteria that can be used to identify whether and to what extent ES approaches are being applied: (1) connect impacts all the way from ecosystem changes to human well-being, (2) consider all relevant ecosystem services affected by the decision, (3) consider and compare the changes in well-being of different stakeholders. As a demonstration of these criteria, the article looks at if and how the criteria were met in different decision-making contexts using an analysis format that describes the type of policy, the relevant scale(s), the decisions or questions, the decision maker, and the underlying documents. This format includes a general judgement of how far the three ES criteria have been applied. It shows that the criteria can be applied to many different decision-making processes, ranging from the supranational to the local scale, and to different parts of those processes. The authors conclude that these criteria could be used to assess the extent to which ES approaches have been and should be applied, to understand the benefits and challenges of applying the approaches, and to determine whether using them makes a difference in the decision-making process, the decisions, or the outcomes of those decisions. Results from such studies could inform future use and development of ES approaches, draw attention to the approaches’ greatest benefits and challenges, and inform integration of ES approaches into policies.

Authors: Joke Van Wensem, Peter Calow, Annik Dollacker, Lorraine Maltby, Lydia Olander, Magnus Tuvendal, and George Van Houtven

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Ecosystem Services

National Ecosystem Services Partnership

Journal Articles

Engaging Large Forest Owners in All-Lands Conservation: All-Lands and Large Ownerships—A Conversation to Advance Engagement Workshop, March 8, 2016, Washington, D.C.

Successful landscape-scale forest conservation and management efforts must engage a wide variety of forestland owners. Owners of large areas of forestland (more than 10,000 acres) have a particularly important role to play in the attainment of landscape-scale goals. Their cooperation increases opportunities for attaining conservation benefits at significant scale. On March 8, 2016, a group of large private landowners was for the first time brought together with federal, NGO, and academic thought leaders to generate ideas for improving engagement on landscape-scale conservation goals. The dialogue was designed to identify barriers to and options for that engagement. These proceedings summarize the dialogue of meeting participants in addressing an “all lands” approach to conservation whereby landowners and stakeholders collaborate on identifying long-term, mutually beneficial goals for the landscapes they share. It includes a profile of large institutional forestland owners and details the results of a survey conducted to measure their current engagement in conservation activities. Participants identified barriers to engaging large forest landowners in conservation. They include the absence of an inclusive vision for the future of forest management, insufficient leadership for building diverse coalitions to address forest threats, lack of alignment of existing federal programs with respect to large ownership structures, limited understanding of the public benefits provided by large privately owned forests, and lack of markets to sustain these benefits. Participants recognized the need to define a shared conservation vision, to build leadership for a broad coalition of stakeholders, and to execute a national strategy recognizing the value of and providing incentives for large private landowners to cooperatively address forest threats. Much discussion centered on building the business case for conservation and on recognizing new values and expanding markets. Participants also considered opportunities for aligning the incentive-based approaches of funding agencies with the needs and interests of forestland owners. A steering committee was formed to consider developing specific strategies to incentivize engagement of large forestland owners and to work toward a collaborative vision for attaining conservation objectives across varied ownerships.

Authors: Eric Smith, Lydia Olander, Paul Trianosky, and Andrea Bedell-Loucks

 

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Ecosystem Services

Land

Proceedings

Contributions of LiDAR to Ecosystem Service Planning and Markets: Assessing the Costs and Benefits of Investment

Municipalities are increasingly interested in using light detection and radar (LiDAR) technology to support a variety of markets, services, and planning processes. Consequently, they are contemplating how best to justify investments in improved data when not all of the investments’ costs and benefits are amenable to quantitative estimation. They are also contemplating who benefits from the investments and how to address any inequities in either costs or benefits. This paper reviews the drivers and co-benefits of expanded LiDAR data investment by local government entities and presents a case study of forest carbon markets in California to illuminate how this investment compares to investment in the acquisition of field sampling and other data. The study suggests that LiDAR can be cost-competitive with traditional field-sampling approaches under certain conditions or assumptions, and it may offer advantages and some benefits that may not accrue from field-based approaches. In addition, the study reinforces the conclusion of other research that conditions, approach, and assumptions strongly influence analysis outcomes, in turn reinforcing the need to tailor analyses to the research question at hand. Although the case study lends insight into the tools available for assessing the costs and benefits of LiDAR data acquisition, several uncertainties remain, including how LiDAR and other improved data fit into national policy dialogues and program funding discussions.

Author: Christopher S. Galik

Filters

Environmental Markets

Ecosystem Services

Working Papers

Assessing County and Regional Habitat Conservation Plan Creation: What Contributes to Success?

Habitat conservation plans (HCPs) are a means for private landowners to comply with the Endangered Species Act. It has become increasingly common for county and regional governments to create region-wide HCPs that cover development from multiple projects in the entire region. Local governments recognize that these plans can increase economic certainty for residents, increase development, and potentially increase conservation. However, region-wide plans are time and resource intensive, and they sometimes are not completed. What factors and processes lead to the successful completion of an HCP at the regional and county level? This paper presents the results of five case studies on county or regional HCPs. It finds that several factors contribute to successful HCP creation: (1) a cooperative relationship between the county or region and the U.S. Fish and Wildlife Service (USFWS) and between the local governing body and the USFWS; (2) local community and political involvement, especially early stakeholder engagement; (3) determination of the covered species by a scientific advisory committee or a consultant; (4) primary funding through USFWS Section 6 grants; and (5) utilization of the county or region’s own reserve lands to most efficiently use mitigation funds and provide the best species habitat. By identifying these factors that contribute to HCP success, this analysis allows stakeholders to anticipate needs and potential barriers, benefitting individuals with diverse interests in counties and regions where a large-scale HCP is possible.

Authors: Chelsea L. Baldino, Lydia P. Olander, and Christopher S. Galik

Filters

Endangered Species Act

Ecosystem Services

Land

Working Papers

Researching a Reimagined ESA: The Continued Need and Opportunity for Voluntary Conservation

Since passage of the U.S. Endangered Species Act (ESA) more than 40 years ago, federal agencies have sought to enhance the engagement of non-federal landowners and managers in recovery actions. An effort to design programs and policies to facilitate voluntary conservation activities under the ESA has been renewed, but the adoption and effectiveness of these activities could be diminished by the lack of data to address three issues. First, landowners and land managers must be motivated to participate in pre-listing and voluntary conservation and to do so at the scale necessary to achieve conservation outcomes. Second, activities need to be effective in promoting conservation. Third, laws and administrative processes must accommodate or facilitate desired approaches. This working paper identifies data needs in each of these three areas, reviews experience with existing voluntary conservation approaches under the ESA, and recommends research and implementation strategies to make voluntary conservation approaches more widespread.

Authors: Christopher S. Galik, Jacob P. Byl, Christian Langpap, and Michael G. Sorice

Filters

Endangered Species Act

Ecosystem Services

Environmental Economics

Working Papers

Building Carbon in America’s Farms, Forests, and Grasslands: Foundations for a Policy Roadmap

In the United States, land carbon offsets nearly 15 percent of economy-wide greenhouse gas emissions, equivalent to half of emissions from the transportation sector. However, the future of this sizable "carbon sink" is uncertain. The latest U.S. assessments disagree on whether land will be a sink or a source in the coming decades, which could make all the difference in whether future climate targets are reached. Despite significant research, a complete understanding of policy or market tools capable of bending the trajectory of the carbon sink remains elusive. This report by Forest Trends and the Nicholas Institute for Environmental Policy Solutions—the first product of the Land Carbon Policy Roadmap Initiative—launches a process for understanding the most significant drivers of land carbon change and the policy tools critical for managing land carbon into the future. It offers new analysis to support a long-term roadmap for enhancing the U.S. land carbon sink, ensuring that healthy and productive landscapes contribute to greenhouse gas reduction goals.

Authors: Emily McGlynn, Christopher Galik, David Tepper, Jerod Myers, and Julie DeMeester

Filters

Ecosystem Services

Land

Climate Change Policy

Sustainability

National

Reports

Managing Risk in Environmental Markets

Environmental markets use voluntary approaches to meet regulatory requirements and to target cost-effective, flexible, and efficient means to achieve environmental results. Although these markets create opportunities, they also involve some risk for regulated buyers, project developers (sellers), landowners, and the public. This paper reviews five types of risk these actors face—technical risk, extreme events, behavioral uncertainty, regulatory uncertainty, and market uncertainty—in four markets that commonly engage agricultural and forest landowners in the United States—wetland and stream mitigation banking, conservation banking, greenhouse gas offsets, and water quality trading. These markets involve transactions that range from annual to permanent transfers of environmental benefits. Thus they entail different risks and liabilities. Given robust risk management strategies and significant similarity across programs there are but a few risk management mechanisms that have yet to be tried in all markets and that present opportunities for improvement. These mechanisms include clarifying rules about how water quality and carbon offsets projects can sell into multiple markets, thereby enhancing flexibility and reducing risk for buyers and sellers. None of the markets currently use but all could consider purchase guarantees to encourage supply generation. Another opportunity may be vertical integration of regulatory programs, in which buyers become project developers to control risk. Finally, water quality trading markets could use credit banks to connect buyers and sellers. These banks might work best if they serve a clearinghouse function, providing market coordination and information.

Author: Lydia Olander

 

Filters

Environmental Markets

Ecosystem Services

Working Papers

Agricultural Support Policy in Canada: What Are the Environmental Consequences?

This paper reviews annual government spending on Canadian agriculture that attempts to stabilize and enhance farm incomes. Since 2010, two-thirds of the $3 billion spent on agriculture went into stabilization programs to support farm incomes. This level of support raises questions about the environmental consequences of enhanced agricultural production. Canadian government expenditures on environmental initiatives in agriculture, as a share of farm income, are more than 10 times smaller than those in the United States and the European Union. Canadian stabilization programs have modest impacts on production, but chemical and fertilizer input use may be higher than in the programs' absence. One possible course of action is to introduce cross-compliance between program payments and environmental objectives. However, there are no requirements that Canadian producers receiving support comply with environmental standards. Although cross-compliance could be considered in the Canadian context, policies that directly target specific environmental issues in agriculture may have greater impact.

Authors: Alison Eagle, James Rude, and Peter Boxall

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Ecosystem Services

Land

Journal Articles

Pages