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3 Ways Markets Help Protect Our Environment

3 Ways Markets Help Protect Our Environment

This Earth Day, pessimism hangs over the conservation community. The war in Ukraine seems to be preventing ambitious climate solutions from being implemented; rising fuel prices have brought into sharper focus our current and future dependence upon fossil fuels; and we, the West, are preparing for another Drought-stricken summer. These challenges are difficult and will not be easy to solve. There is still reason to be optimistic about the conservation landscape. It comes from an unlikely source: the markets.

Innovative entrepreneurs are using the power and rights of markets and property to increase conservation in a variety if ways. Although they may not be the most glamorous or attention-grabbing, these three examples have a real impact and provide some much-needed hope for Earth Day.

1. Conserving Water

Drought is common in the West. With increasing populations, creative ways to distribute scarce water are more important.

Trout UnlimitedOne of the pioneers in harnessing water markets for conservation is TU. TU works in partnership with farmers and ranchers throughout the West to temporarily divert some water from its agricultural use. However, it leaves it instream at crucial times of year to support fish populations. TU finances compensation for water rights holders. This is a win-win situation for both farmers and fish.

Water rights holders who have instream flow can make voluntary agreements with conservation groups to allow some of their water to be left instream. They will not lose their water rights. This allows this precious resource to be used in its most valuable use, and provides conservationists with a price mechanism to realize water conservation value.

2. Maintaining Wildlife Habitat

The popularity of western states like Montana has increased in recent years. They are now under increasing pressure from urban growth and population growth. This growth threatens habitat integrity of large, private working lands in the region that provide essential winter range to a variety wildlife, including the elk, which is a keystone species in the ecosystem. Private partners are seeking innovative agreements to preserve these landscapes.

The Property and Environment Research Center and Greater Yellowstone Coalition have partnered up with a ranching family in Montana’s Paradise Valley to preserve 500 acres of their ranch as elk winter range. This Agreement on the occupancy of elkThis project is completely voluntary, privately funded and does not require government oversight.

Many times, a landowner is willing and able to manage their land for conservation, but is not willing to sign a government-managed conservation easement that requires conservation in perpetuity. For many landowners, the elk occupancy agreement (or shorter-term habitat lease) offers a private, less burdensome alternative. These flexible tools offer more opportunities to conserve habitat.

3. Improving Forest Health

Wildfires in the West are getting more destructive and more dangerous due to the accumulation of fuels such as dead trees and overgrown vegetation. This is despite the fact that the federal government has been trying to extinguish all forest fires within a short time. This has unfortunately become the new norm, with western communities bracing for more destructive fires each season.

The Forest Service has identified 63,000,000 acres at risk of wildfire and in dire need of active forest restoration. The agency would need to tackle the growing backlog of restoration projects at its current pace and scale for decades. Innovators have discovered a way to tap into the private sector to get some of this urgently needed restoration done.

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Blue Forest is a conservation organization that has pioneered the concept of “Blue Forest” in partnership with World Resources Institute. Forest Resilience Bond. This innovative financial tool allows private investors such as an insurance company to fund the bond. Stakeholders who benefit from forest restoration (such as a state or utility) agree to pay the investors back and a reasonable rate return as restoration benefits are realized.

The Forest Service piloted the first Forest Resilience Bond in the Tahoe National Forest. This tool is expected to reduce the project timeline from a decade to four years. This innovative model provides financial assistance to accelerate critical forest restoration projects. This is a benefit for forest health and western communities.

Many environmental challenges still exist that require our attention and creativity. Market tools such as price signals, property rights, and incentives work to preserve our natural world through flexible, cooperative arrangements. This market approach helps to bridge the gap between different stakeholders and provides sustainable solutions. Despite what you might think, markets are a great way to celebrate Earth Day.

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