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Trading for Conservation. Use of Market Mechanisms to Fund Forest Conservation or Doing Well by Doing Good. Robert B. McKinstry, Jr. Goddard Prof. of For. & Envt’l Resources Conservation Penn State. Environmental Trading. Programs allow “marketing” of environmental compliance

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Trading for Conservation

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Trading for conservation

Trading for Conservation

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

Robert B. McKinstry, Jr.

Goddard Prof. of For. & Envt’l Resources Conservation

Penn State

Environmental trading

Environmental Trading

  • Programs allow “marketing” of environmental compliance

  • Increasing use

  • Conservation funding mechanism

Innovations for conservation funding

Innovations for Conservation Funding

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

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

Flavors of applicable environmental trading

Air pollution trading

Carbon trading and banking

Water pollution trading

Nutrient trading program for Chesapeake

Transfer Development Rights

NJ Pinelands

Wetlands banking

Habitat banking

Flavors of Applicable Environmental Trading

Rogers value tent


Hunting anan


Carbon Sequestration



Rogers’ Value Tent

  • Stream corridors can promote multiple environmental values

  • Support credits in multiple markets

Generate multiple credits

Generate Multiple Credits

Rogers 2006

Make conservation pay

Make Conservation Pay

  • One market may not provide sufficient incentive to conserve

  • Multiple markets may provide sufficient financial incentive to conserve

  • Will conserve most environmentally valuable lands

Chester county nc county project use of habitat banking as a tool for land conservation

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

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

Unique attributes

Unique Attributes

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

  • Partnerships with multiple conservation groups

Endangered species act

Endangered Species Act

  • In 1997, the bog turtle was listed as a threatened species.

  • Two Effects: “Take” and Consultation

Esa effects on private land

ESA Effects on Private Land

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

  • Other federal permits or actions require consultation if effect on endangered or threatened spp.

    • wetlands, air and water permits, stormwater permits

Preferred habitat

Preferred Habitat


Open forest canopy

Early succession wetland meadow

Commonly associated with tussock sedge

Pressures on the bog turtle

Pressures on the Bog Turtle

PoachingHabitat Fragmentation & Development

Problems with current management under the esa

Problems with Current Management under the ESA

  • Very little active management

  • Development encroaches

  • Fragmented mitigation areas will not conserve spp.

Conservation bank

Conservation Bank

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

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

Banking 101

Banking 101

  • Bank = large mitigation site with management and buffers and financing

    • developers may rely on that for quick approval if they pay

  • Mitigation site will generate credits

    • Acres, nesting sites, burrows etc

    • Need equivalence

  • FWS determines how many credits available and how many credits needed by each developer

    • This will be done by our plan for the bank

Bog turtle project objectives

Bog Turtle Project Objectives

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

  • Transfer cost of conservation to new development

    • Pay rather than delay

    • Less incentive to sell property for development

  • Reduce conflicts

Conservation plan structure

Conservation Plan Structure

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

    • Affirmative easements

  • Establish conservation bank

    • Developers may develop up to wetlands line and permit crossings, etc., but must pay

  • Funds in bank will be used for additional conservation

Generation of credits

Generation of Credits

  • Developer pays for credits

    • Number of credits required depends on habitat required

    • Price of credits ≥ cost of mitigation land + PV management and enforcement

Money trail

Money Trail

  • Payments go to:

    • Trust fund for management and enforcement

    • Revolving fund for habitat purchase

  • Revolving fund purchases new bank



  • Initially funded with open space money and grants

    • Existing easements might be used, but will not due to landowner resistance

  • Credits sold for fund to support management and easement acquisition activities

    • May be retired or sold and used to fund more acquisition

  • Initially pilot area and scaled up

Cooperative structure

Cooperative Structure

  • Form bog turtle conservancy for management and backup ownership

  • Partnerships with

    • Existing conservancies

    • State and local governments

    • USFWS

    • PA Fish and Boat and DENREC

    • Development community



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

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

  • Partnerships – working with existing conservancies and gov’t

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