Showing posts with label banking. Show all posts
Showing posts with label banking. Show all posts
Wednesday, August 21, 2013
Forever forever? What the heck does permanent mitigation mean?
In a recent op-ed for USA Today, mitigation banker Wayne Walker argues for establishing prairie chicken conservation banks, as a way to prevent the looming "train wreck" between environmentalist and oil/gas industry interests. It's a well-written piece that tries to spell out in basic terms, what mitigation is all about (EcosystemMarketplace renamed it, "How to explain mitigation to your grandmother"). Sometimes, though, it's deceptively simple. A big part of Walker's case is that offsets, like diamonds, are forever. He points to wetland and stream mitigation: "The logic of permanent easements is straightforward: Draining a wetland to build something is permanent -- not temporary -- and therefore the mitigation should also be permanent. The same principle holds true for the chicken. Impacts to it and its habitat are both permanent – the offset should be as well." Problem is, there's a clear difference between a permanent easement and a permanent offset, a difference Walker doesn't sort out. An easement is no guarantee of ecological function. Sure, the Corps will require an easement, but are they going to come back to the site in 50 years and check in to see what's up? To assess whether the wetland, stream, or prairie habitat is in a condition or performs such that it will account for the original impact the site offset? Maybe, but even if the Corps/USFWS did come around, would they require the bank to do anything about it? Should we even care? If the wetlands your local Wal-Mart paved over today are going to dry up or sink into the sea anyway in the next 20 years because of climate change, does it matter that the compensatory mitigation site Wal-Mart buys credits from function in the same way the wetlands currently do? I've walked through similar issues here and here. If, as Walker notes, the goal for all sides is "certainty," these are key questions if mitigation banking is to gain a sense of (ecological) legitimacy in an era of rapidly changing climates.
Sunday, July 22, 2012
Who didn't start the fire? Some difficulties in (sage grouse) conservation
Apologies for another title with an 80s musical reference. 2012 has been one of the hottest and driest on record and that has meant "wild" fires. While national attention was drawn to Colorado's blazes, I've been more drawn to reports on Oregon's largest wildfire in 150 years. This Oregonian article in particular does a great job of spelling out the politics of the fire. Was it the ranchers, the BLM, or the weather that started it? I'm not sure, but I think the consequences of the fire are intriguing.
That's because the fire has put the sage grouse at risk by burning a large chunk of prime habitat - and that matters because the sage grouse is a keystone species for emerging forms of conservation. The sage grouse is a big and beautiful bird that lives in the western United States and depends on sagebrush for habitat. The decline of the grouse, it seems, has a lot to do with habitat fragmentation cause by new energy development in the West: wind turbines, transmission lines, oil drilling, and mines. The bird does neat things like group mating calls. The grouse and its ways have been at the center of scientific-legal scandal. In 2004 the Bush administration decided it didn't need any protection, but a more recent court ruling, in 2010, noted that the decision-making proccess in that case was faulty. FWS has replied that listing the species is still "warranted" but also thinks that there are bigger fish to fry, er save, at least until 2015 when it will reconsider listing.
So the sage grouse is instead now implicated in an assortment of "new" conservation efforts that aim to pre-empt regulatory burdens in the first place. In part, these efforts stem from the fact that the bird is still a candidate species and not actually listed. In 2010, the same year Interior/FWS called for protecting, but not listing, the bird, NRCS jumped in and created the Sage Grouse Initiative, seeking to do "wildlife conservation through sustainable agriculture." SGI's voluntary approach - via conservation easements and Conservation Innovation Grants - is key. According to SGI itself, it represents an "excellent example of how NRCS is orchestrating a paradigm shift in recovery for at-risk species. Instead of regulatory burdens, the Initiative takes a voluntary approach that benefits agriculture and sage grouse – along with a suite of other wildlife species too, from pronghorn to mule deer." SGI works with ranchers to help them do things like: change grazing patterns, move fences, and remove invasives (junipers) that benefit sage grouse habitat. The hope is that the bird ultimately won't have to be listed and that rancher income can be buffered at the same time.
I'll argue that the other reason why the grouse is a model for new conservation is because of the scale of its habitat and the species's extensive range. The Willamette Partnership has thought long and hard about scaling-up habitat conservation. Along these lines, it's developed a metric for sage grouse/sagebrush, with the idea, I think, that it could be portable to any context where one might want to save sage grouse habitat. It would be much harder for a more localized endangered species like the red-bearded Jackson County lark (fictional bird) or even the fairy shrimp (real!) to get this kind of energy behind it.
Here's what I'm bringing the bird back to: I wonder what the fire can tell us about "new" conservation. For right now, I'll answer with a question: how do conservationists, agencies, ranchers, etc. account for the dynamics of ecosystems within a regulatory, or better yet, a "pre" regulatory ESA? The question certainly goes beyond assessing future climate change, though the uneven effects of climate change, like drought and fire, are undoubtedly a huge source of project risk. I think there are two specific, but interrelated kinds of questions to be asking here: how do you effectively make sage grouse habitat into a credit or unit of sale/funding and what are the rules governing the life of this mitigation credit or best management practice or whatever. I'll start with the latter question. If a rancher signs up to protect the sage grouse, but then a fire comes along and destroys the protected habitat, what do you do as a regulator? What's the rule? Hold the rancher responsible? And what if the rancher had already sold credits to a developer making an impact elsewhere? Is the developer responsible (they would be in TMDL mitigation, but not 404)? In the end, part of the answer is: well whose fault was it anyway? But as the Long Draw fire shows, that's not an easy question to answer.
There's more than a question of liability here too. How do you create a non-linear or a non-equilibrium currency, one that accredits changes in ecosystem states over time? Or do you? As a regulator you probably want verifiable results of sage grouse protection, preferably with a 5-10 year timespan because you are operating within a legal climate that calls for the bird's protection. So you might prefer a set of performance standards that asks for no fire on the conservation site. That sort of conservation might not look like the kind The Society for Sage (fictional) might ask for. That group might say, well fire is a regular component of the sage ecosystem. A rancher might then reply, how can I be certain that fire is going to give me all the sagebrush I need to sell credits?
That's a completely fictional conversation, but a Willamette Partnership report on biodiversity markets raises several of the questions I've asked here. What's clear is that there's going to have to be some sort of balance between what works for sage grouse/sagebrush and what works for regulators and what works for conservationists and what works for ranchers and the politics of that tradeoff will be interesting to watch as climate change burns on all around us.
That's because the fire has put the sage grouse at risk by burning a large chunk of prime habitat - and that matters because the sage grouse is a keystone species for emerging forms of conservation. The sage grouse is a big and beautiful bird that lives in the western United States and depends on sagebrush for habitat. The decline of the grouse, it seems, has a lot to do with habitat fragmentation cause by new energy development in the West: wind turbines, transmission lines, oil drilling, and mines. The bird does neat things like group mating calls. The grouse and its ways have been at the center of scientific-legal scandal. In 2004 the Bush administration decided it didn't need any protection, but a more recent court ruling, in 2010, noted that the decision-making proccess in that case was faulty. FWS has replied that listing the species is still "warranted" but also thinks that there are bigger fish to fry, er save, at least until 2015 when it will reconsider listing.
So the sage grouse is instead now implicated in an assortment of "new" conservation efforts that aim to pre-empt regulatory burdens in the first place. In part, these efforts stem from the fact that the bird is still a candidate species and not actually listed. In 2010, the same year Interior/FWS called for protecting, but not listing, the bird, NRCS jumped in and created the Sage Grouse Initiative, seeking to do "wildlife conservation through sustainable agriculture." SGI's voluntary approach - via conservation easements and Conservation Innovation Grants - is key. According to SGI itself, it represents an "excellent example of how NRCS is orchestrating a paradigm shift in recovery for at-risk species. Instead of regulatory burdens, the Initiative takes a voluntary approach that benefits agriculture and sage grouse – along with a suite of other wildlife species too, from pronghorn to mule deer." SGI works with ranchers to help them do things like: change grazing patterns, move fences, and remove invasives (junipers) that benefit sage grouse habitat. The hope is that the bird ultimately won't have to be listed and that rancher income can be buffered at the same time.
I'll argue that the other reason why the grouse is a model for new conservation is because of the scale of its habitat and the species's extensive range. The Willamette Partnership has thought long and hard about scaling-up habitat conservation. Along these lines, it's developed a metric for sage grouse/sagebrush, with the idea, I think, that it could be portable to any context where one might want to save sage grouse habitat. It would be much harder for a more localized endangered species like the red-bearded Jackson County lark (fictional bird) or even the fairy shrimp (real!) to get this kind of energy behind it.
Here's what I'm bringing the bird back to: I wonder what the fire can tell us about "new" conservation. For right now, I'll answer with a question: how do conservationists, agencies, ranchers, etc. account for the dynamics of ecosystems within a regulatory, or better yet, a "pre" regulatory ESA? The question certainly goes beyond assessing future climate change, though the uneven effects of climate change, like drought and fire, are undoubtedly a huge source of project risk. I think there are two specific, but interrelated kinds of questions to be asking here: how do you effectively make sage grouse habitat into a credit or unit of sale/funding and what are the rules governing the life of this mitigation credit or best management practice or whatever. I'll start with the latter question. If a rancher signs up to protect the sage grouse, but then a fire comes along and destroys the protected habitat, what do you do as a regulator? What's the rule? Hold the rancher responsible? And what if the rancher had already sold credits to a developer making an impact elsewhere? Is the developer responsible (they would be in TMDL mitigation, but not 404)? In the end, part of the answer is: well whose fault was it anyway? But as the Long Draw fire shows, that's not an easy question to answer.
There's more than a question of liability here too. How do you create a non-linear or a non-equilibrium currency, one that accredits changes in ecosystem states over time? Or do you? As a regulator you probably want verifiable results of sage grouse protection, preferably with a 5-10 year timespan because you are operating within a legal climate that calls for the bird's protection. So you might prefer a set of performance standards that asks for no fire on the conservation site. That sort of conservation might not look like the kind The Society for Sage (fictional) might ask for. That group might say, well fire is a regular component of the sage ecosystem. A rancher might then reply, how can I be certain that fire is going to give me all the sagebrush I need to sell credits?
That's a completely fictional conversation, but a Willamette Partnership report on biodiversity markets raises several of the questions I've asked here. What's clear is that there's going to have to be some sort of balance between what works for sage grouse/sagebrush and what works for regulators and what works for conservationists and what works for ranchers and the politics of that tradeoff will be interesting to watch as climate change burns on all around us.
Sunday, July 15, 2012
Lucky lizards: the Texas Conservation Plan
In a previous post, I talked about how landmanagers and developers can now trade USFWS-certified credits representing the conservation of threatened, but not yet ESA-listed, species habitat. I gave a fictional example of a southern Oregon farmer, John Johnson, getting credit for planting habitat for the red-bearded Jackson County song lark. I pointed to a recent FWS rule allowing for these sorts of schemes, but beyond the tale of Farmer John and some related Clean Water Act-focused pre-compliance mitigation projects, I was in short supply of real world examples.
Then I heard about Texas's Dune Sagebrush Lizard (DSL). I'm trying to sift through a recent report from Ecosystem Marketplace on efforts to protect the DSL before the FWS lists it. About a year ago, the Texas Legislature authorized the Comptroller of Public Accounts to establish and oversee pre-compliance species habitat conservation programs, better known as Candidate Conservation Agreements with Assurances (CCAAs). What the heck is a Comptroller of Public Accounts, you ask? The Comptroller's mission is to "Keep Texas First" by watching and responding to federal regulations that harm Texas businesses. Indeed, the stated goal of the legislation, Senate Bill 1, was to balance conservation with Texas's economic needs, and in the case of the DSL, that means the Texas Oil and Gas Association and ranchers. The TCP's steering committee is more or less stacked with those who have interests in either developing oil and gas wells or raising livestock in the DSL's native habitat.
On behalf of the group, Comptroller Susan Combs wrote in during the public comment period on the TCP. She wrote that listing the DSL - with little science available to justify such a move - would come at the expense of Texas's biggest oil producing region: "I am emphatically against the FWS listing the DSL as an endangered species as there is not yet enough scientific data to support such a determination. We do not yet have baseline population data for the species." Either way, Texas was ready for the feds, and that was the impetus for the TCP: "However, it was absolutely critical that our state be prepared for a possible listing decision for the DSL." Coombs ends by suggesting that the TCP could be a model nationally for FWS.
Ultimately, because of the TCP, FWS decided not to list the DSL as endangered. FWS decided against listing after finding something like 88% of the DSL's habitat, including the energy-rich Permian basin in Texas, would be under some form of protection. Here's how the TCP works: landowners can choose to enroll, confidentially, in the TCP by deciding what practices they would like to do, including managing grazing or removing invasive brush. Indeed, "most of the conservation practices called for in the TCP are already common agricultural practice." Landowners can also drop out at anytime. However, the plan does require oil and gas developers to mitigate for DSL impacts.
This is where the credits come in. Oil and gas companies can contract with landowners to enhance DSL habitat or they can even contribute to species tracking efforts. I'm not sure who goes about making sure that the energy firms' impacts square with what benefits the ranchers bring - measurement and enforcement certainly weren't prominent features in anything I read from the Comptroller. They are in the Plan itself, however, as the Ecosystem Marketplace article's author, Jemma Denny, notes. She draws out some of the big difficulties with the TCP. No one really knows much about what the lizard needs, which gives the TCP steering committee leeway in being loose about what it requires itself to do. First, unlike other species banking schemes, long-term conservation easements aren't required. Second, there really aren't any specific "Conservation Measures" that link up impacts with benefits to ensure no net loss mitigation. No one knows how many lizards can be saved by removing invasive brush or restoring habitat at old drilling pads. Ultimately, the TCP, especially the trading mitigation credits part, is really a shot in the dark.
But here's what I'm bringing it back to: In my previous post on pre-compliance banking I got a little philosophical - I pondered what CCAAs mean for environmental governance. One of the things I noted in particular was that pre-compliance banking didn't really mean regulatory relief for agencies - they'd likely still have to be drawn into verifying some measure of habitat. And those making habitat impacts would still be under some sort of pressure from the feds. To be overly vulgar about it, in pre-compliance banking FWS is still holding a gun to impacters' heads: you've got to comply, ESA listing or no, or take your chances.
After reading up on the DSL, I think my rough conclusions need nuancing. What the TCP shows us about pre-regulatory banking is, in general, that context is important. It matters that the DSL lives in a state where rich energy companies hold a lot of sway and where the state government is distrustful of federal regulation. More specifically, TCP shows us that regulatory relief is always a matter of relief for whom? For the oil and gas companies, for sure, if they can get away with what looks to be a framework for spotty conservation. It's relief even for the FWS, if they don't have to go through the hassle of a listing, and don't care about upholding rigorous conservation measures. Instead, I wonder what developers' and agencies' relief dumps off on to in the end? Whether the lizards can get relief from fracking is the real question.
Then I heard about Texas's Dune Sagebrush Lizard (DSL). I'm trying to sift through a recent report from Ecosystem Marketplace on efforts to protect the DSL before the FWS lists it. About a year ago, the Texas Legislature authorized the Comptroller of Public Accounts to establish and oversee pre-compliance species habitat conservation programs, better known as Candidate Conservation Agreements with Assurances (CCAAs). What the heck is a Comptroller of Public Accounts, you ask? The Comptroller's mission is to "Keep Texas First" by watching and responding to federal regulations that harm Texas businesses. Indeed, the stated goal of the legislation, Senate Bill 1, was to balance conservation with Texas's economic needs, and in the case of the DSL, that means the Texas Oil and Gas Association and ranchers. The TCP's steering committee is more or less stacked with those who have interests in either developing oil and gas wells or raising livestock in the DSL's native habitat.
On behalf of the group, Comptroller Susan Combs wrote in during the public comment period on the TCP. She wrote that listing the DSL - with little science available to justify such a move - would come at the expense of Texas's biggest oil producing region: "I am emphatically against the FWS listing the DSL as an endangered species as there is not yet enough scientific data to support such a determination. We do not yet have baseline population data for the species." Either way, Texas was ready for the feds, and that was the impetus for the TCP: "However, it was absolutely critical that our state be prepared for a possible listing decision for the DSL." Coombs ends by suggesting that the TCP could be a model nationally for FWS.
Ultimately, because of the TCP, FWS decided not to list the DSL as endangered. FWS decided against listing after finding something like 88% of the DSL's habitat, including the energy-rich Permian basin in Texas, would be under some form of protection. Here's how the TCP works: landowners can choose to enroll, confidentially, in the TCP by deciding what practices they would like to do, including managing grazing or removing invasive brush. Indeed, "most of the conservation practices called for in the TCP are already common agricultural practice." Landowners can also drop out at anytime. However, the plan does require oil and gas developers to mitigate for DSL impacts.
This is where the credits come in. Oil and gas companies can contract with landowners to enhance DSL habitat or they can even contribute to species tracking efforts. I'm not sure who goes about making sure that the energy firms' impacts square with what benefits the ranchers bring - measurement and enforcement certainly weren't prominent features in anything I read from the Comptroller. They are in the Plan itself, however, as the Ecosystem Marketplace article's author, Jemma Denny, notes. She draws out some of the big difficulties with the TCP. No one really knows much about what the lizard needs, which gives the TCP steering committee leeway in being loose about what it requires itself to do. First, unlike other species banking schemes, long-term conservation easements aren't required. Second, there really aren't any specific "Conservation Measures" that link up impacts with benefits to ensure no net loss mitigation. No one knows how many lizards can be saved by removing invasive brush or restoring habitat at old drilling pads. Ultimately, the TCP, especially the trading mitigation credits part, is really a shot in the dark.
But here's what I'm bringing it back to: In my previous post on pre-compliance banking I got a little philosophical - I pondered what CCAAs mean for environmental governance. One of the things I noted in particular was that pre-compliance banking didn't really mean regulatory relief for agencies - they'd likely still have to be drawn into verifying some measure of habitat. And those making habitat impacts would still be under some sort of pressure from the feds. To be overly vulgar about it, in pre-compliance banking FWS is still holding a gun to impacters' heads: you've got to comply, ESA listing or no, or take your chances.
After reading up on the DSL, I think my rough conclusions need nuancing. What the TCP shows us about pre-regulatory banking is, in general, that context is important. It matters that the DSL lives in a state where rich energy companies hold a lot of sway and where the state government is distrustful of federal regulation. More specifically, TCP shows us that regulatory relief is always a matter of relief for whom? For the oil and gas companies, for sure, if they can get away with what looks to be a framework for spotty conservation. It's relief even for the FWS, if they don't have to go through the hassle of a listing, and don't care about upholding rigorous conservation measures. Instead, I wonder what developers' and agencies' relief dumps off on to in the end? Whether the lizards can get relief from fracking is the real question.
Sunday, June 10, 2012
Risky business: pre-compliance mitigation in habitat and water quality
Imagine you are a landowner in, say, southwestern Oregon. Turns out that on your land lives the rare red-bearded Jackson County song lark (a bird that I made up. Threatened species always have the best names, don't they? Some folk may be partial to charismatic megafauna, but I'm a fan of what I guess you could call eccentric microspecies.) The bird's not yet regulated under the US Endangered Species Act - it's just a candidate - but it might
be listed soon if the WildEarth Guardians' lawsuit goes through. You're inclined to
protect it anyway and guess what, USFWS is going to let you restore more of its habitat and then sell credits to developers elsewhere who are destroying its habitat.
The basic idea behind the concept of pre-compliance mitigation is to provide land managers with incentives to do conservation and to encourage developers (a name I use generically for anyone making a habitat impact) to fund that work. In a PowerPoint, Alice Appleton from the new-ish USDA Office of Environmental Markets names ESA pre-compliance trading as one of 4 or 5 conservation markets already existing in the US (others being Clean Water Act 404 wetland/stream banking, TMDL water quality trading, listed species banking, and carbon offsets). In the presentation Appleton suggests ecosystem markets like ESA banking can be useful for:
The idea of creating or restoring habitat for endangered species, as one might do with wetlands for wetland mitigation banks, has been around for a while. However, on the ground projects seem to exist only in California, and just recently in Oregon. A lot, but certainly not all, of these seem to be for fish, especially salmon (see especially Salmon Safe and the Willamette Partnership's "tri-fecta" of incentives). Becca Madsen notes that ESA banking is likely to be a top issue for mitigators in 2012 because of Interior's agreement, in the face of lawsuits like the one mentioned above, to list over 200 species - what the New York Times calls the biggest change in ESA enforcement since the early 90s (spotted owl times). Pre-compliance could come out of that court settlement in a large way as developers realize the costs of having to deal with the new listings.
The thought of providing land managers with relief from water quality (nutrients, e.g.) regulation has been around since at least 2005-6, but for all I know, longer. Last summer USDA and EPA drafted a "certainty framework" that outlines what pre-compliance conservation might look like for water quality standards. It's not clear what the main driver would be, though one could guess it would be TMDLs. As with most water quality programs, it's up to the states to figure out specifics. and there are two state-level programs that I've heard of: Minnesota's and Michigan's. Michigan's is older, pre-dating the framework. However, the sense I get of the Michigan program is that it is less about reducing farmers' liabilities from water quality nutrient/temperature/sediment regs like a TMDL as much as it: 1) reduces liabilities from other rules on for instance pesticide handling; 2) is basically a good practices certification program like GAP. Apparently you can also buy a t-shirt with the program's logo. Minnesota's seems to be more of a relief program where farmers get "immunity" from the state's water quality standards by performing certain conservation activities. These activities are not yet set, but technical advisory committees will be forming them soon.
But here's a true point: what's ultimately fascinating about pre-compliance banking is that at the same time it represents some form of "regulatory relief" for develoers, and thus a supposed withdrawal of government from the business of mandating conservation (as it "mandated" firm-specific tech controls on water quality before allowing water quality trading), pre-compliance banking is also a re-assertion of agency involvement. Of course anyone familiar with mitigation in the US knows that it's all about agencies' regulatory drivers. Yet in this case, the regulatory driver doesn't yet exist. The temporal dimension here is key: a new kind of ecosystem governance is emerging that is done on the basis of what might happen in the future. And this uncertainty, I think, is what makes pre-compliance mitigation tricky, for three reasons. First, it involves agency staff in determining what they think would count as mitigation activity and then enforcing the verification of those activities and outcomes. Second, listing a species is a long and unsure process rife with lawsuits and lobbying. Related, and third - as some agency officials argue, the goal of pre-compliance mitigation is to allow trading in credits in habitat for potentially listed species, so that those species ultimately don't have to be listed. But as a developer, does it pay to engage in voluntarily conserving a species that might not actually be listed, especially if other firms buy credits and build up the species population? We might ask the same for farmers' efforts to reduce runoff - won't others improve water quality enough? In the end the question is: what's more risky or worth the time - lobbying to prevent a listing, letting others choose to buy credits, or buying a credit/doing mitigation yourself?
These are the sort of dilemmas that developers, land managers, and agencies will have to answer going forward.
----
Note: This pre-compliance conservation is different, though related, from the similarly named conservation compliance. Conservation compliance is the requirement that farmers take certain measures to prevent soil erosion, protect habitat, save wetlands, etc. in exchange for receiving government subsidies. It's become a cornerstone of debate in this year's Farm Bill - direct subsidies to farms are likely on their way out, replaced by subsidizing crop insurance, but conservation compliance hasn't been attached to insurance subsidies yet. In both pre-compliance conservation and conservation compliance, however, the basic idea is to encourage voluntary conservation. Of course there is always some form of coercion lurking in the background (we'll regulate it soon anyway/do it or you won't get your money...)
The basic idea behind the concept of pre-compliance mitigation is to provide land managers with incentives to do conservation and to encourage developers (a name I use generically for anyone making a habitat impact) to fund that work. In a PowerPoint, Alice Appleton from the new-ish USDA Office of Environmental Markets names ESA pre-compliance trading as one of 4 or 5 conservation markets already existing in the US (others being Clean Water Act 404 wetland/stream banking, TMDL water quality trading, listed species banking, and carbon offsets). In the presentation Appleton suggests ecosystem markets like ESA banking can be useful for:
- Compensating landowners for the ecosystem services they provide on their private lands
- Investing private funds in natural infrastructure
- Reducing societal costs of regulatory compliance
- Encouraging innovation
- Improving the effectiveness of practices
- …bringing real, verifiable conservation to scale
The idea of creating or restoring habitat for endangered species, as one might do with wetlands for wetland mitigation banks, has been around for a while. However, on the ground projects seem to exist only in California, and just recently in Oregon. A lot, but certainly not all, of these seem to be for fish, especially salmon (see especially Salmon Safe and the Willamette Partnership's "tri-fecta" of incentives). Becca Madsen notes that ESA banking is likely to be a top issue for mitigators in 2012 because of Interior's agreement, in the face of lawsuits like the one mentioned above, to list over 200 species - what the New York Times calls the biggest change in ESA enforcement since the early 90s (spotted owl times). Pre-compliance could come out of that court settlement in a large way as developers realize the costs of having to deal with the new listings.
The thought of providing land managers with relief from water quality (nutrients, e.g.) regulation has been around since at least 2005-6, but for all I know, longer. Last summer USDA and EPA drafted a "certainty framework" that outlines what pre-compliance conservation might look like for water quality standards. It's not clear what the main driver would be, though one could guess it would be TMDLs. As with most water quality programs, it's up to the states to figure out specifics. and there are two state-level programs that I've heard of: Minnesota's and Michigan's. Michigan's is older, pre-dating the framework. However, the sense I get of the Michigan program is that it is less about reducing farmers' liabilities from water quality nutrient/temperature/sediment regs like a TMDL as much as it: 1) reduces liabilities from other rules on for instance pesticide handling; 2) is basically a good practices certification program like GAP. Apparently you can also buy a t-shirt with the program's logo. Minnesota's seems to be more of a relief program where farmers get "immunity" from the state's water quality standards by performing certain conservation activities. These activities are not yet set, but technical advisory committees will be forming them soon.
But here's a true point: what's ultimately fascinating about pre-compliance banking is that at the same time it represents some form of "regulatory relief" for develoers, and thus a supposed withdrawal of government from the business of mandating conservation (as it "mandated" firm-specific tech controls on water quality before allowing water quality trading), pre-compliance banking is also a re-assertion of agency involvement. Of course anyone familiar with mitigation in the US knows that it's all about agencies' regulatory drivers. Yet in this case, the regulatory driver doesn't yet exist. The temporal dimension here is key: a new kind of ecosystem governance is emerging that is done on the basis of what might happen in the future. And this uncertainty, I think, is what makes pre-compliance mitigation tricky, for three reasons. First, it involves agency staff in determining what they think would count as mitigation activity and then enforcing the verification of those activities and outcomes. Second, listing a species is a long and unsure process rife with lawsuits and lobbying. Related, and third - as some agency officials argue, the goal of pre-compliance mitigation is to allow trading in credits in habitat for potentially listed species, so that those species ultimately don't have to be listed. But as a developer, does it pay to engage in voluntarily conserving a species that might not actually be listed, especially if other firms buy credits and build up the species population? We might ask the same for farmers' efforts to reduce runoff - won't others improve water quality enough? In the end the question is: what's more risky or worth the time - lobbying to prevent a listing, letting others choose to buy credits, or buying a credit/doing mitigation yourself?
These are the sort of dilemmas that developers, land managers, and agencies will have to answer going forward.
----
Note: This pre-compliance conservation is different, though related, from the similarly named conservation compliance. Conservation compliance is the requirement that farmers take certain measures to prevent soil erosion, protect habitat, save wetlands, etc. in exchange for receiving government subsidies. It's become a cornerstone of debate in this year's Farm Bill - direct subsidies to farms are likely on their way out, replaced by subsidizing crop insurance, but conservation compliance hasn't been attached to insurance subsidies yet. In both pre-compliance conservation and conservation compliance, however, the basic idea is to encourage voluntary conservation. Of course there is always some form of coercion lurking in the background (we'll regulate it soon anyway/do it or you won't get your money...)
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