Post by Eric Nost, Andrew L’Roe, Chloe Wardropper* and Erin Kitchell
Re-posted with permission from Edge Effects
“We abuse land because we regard it as a commodity belonging to us. When we see land as a community to which we belong, we may begin to use it with love and respect.”
–Aldo Leopold, Foreword to A Sand County Almanac (1949), viii
The practice of environmental conservation has come a long way since Aldo Leopold’s famous diagnosis of ecological degradation’s causes and his call for re-envisioning our relationship to the land. Today, many conservationists find themselves confronted with the idea that protecting nature may in fact require treating it as a commodity, with all the legal, technical, and commercial baggage that comes with any market. Their unease with this paradox manifests itself in surprising ways. For instance, halfway through a webinar organized last year by the Nature Conservancy (TNC), the hosts interrupted themselves when they realized that they had overlooked a subtle disclaimer. They then cautioned that none of what they presented—details on TNC’s new, highly-rated stock offerings allowing shareholders to invest in watershed conservation in Latin America—should be construed as actual financial advice.
But around the world, conservationists, ecologists, and policymakers are turning towards similarly novel ways of incentivizing and financing environmental protection and restoration. These approaches vary widely. Some involve the securitization of ecological restoration projects, allowing institutional pension funds to invest in and make a return on conservation. This is the case on the fringes of New Orleans, Louisiana, where a firm called Ecosystem Investment Partners hopes to put large-scale capital into rebuilding the marshlands that buffer the city from storm surges. Other approaches involve creating “cap and trade” markets that give companies the right to pollute and the ability to trade these rights as commodities. In Europe, power plants and other factories have to get their hands on a limited number of permits in order to release carbon into the atmosphere, and many do so either by buying “offsets” from conservation projects where carbon has been sequestered, or by purchasing permits from other companies that have reduced their own emissions. Finally, some market-oriented conservation efforts aim at incorporating the economic value of ecosystem services into corporate ledgers, government accounts, and supermarket price tags. Should we pay a price for conserving the bees that pollinate the coffee beans we roast, grind, and brew for our morning buzz?
For many decision makers, these approaches hold a lot of promise for finally giving nature clear value, in a way that might achieve economic and environmental goals at once. For some, there isn’t even really a choice to be made—it may be difficult, but if we don’t use markets and other mechanisms to price ecosystems, they will, by default, be deemed worthless. Despite significant conceptualization and countless project proposals, few cases stand out as clear successes, and environmental degradation—in the form of global warming or land use change—continues the world over. As an interdisciplinary group of social scientists working on emerging market approaches to conservation in the US and abroad, we are curious to understand what these institutions and practices for funding nature actually accomplish. We asked ourselves the following questions:
What do market-oriented approaches to conservation do? How do they change not just landscapes, but how we think about our relationships to nature, and each other? What emerges in our answers below is that market making—the work that businesses, NGOs, governments, and others put into defining property rights, modeling stream dynamics, and developing new terminology to describe the natural world—is just as consequential as any environmental benefits that markets may ultimately achieve. Markets in nature not only generate environmental outcomes, but also change social relationships.
Land, as Aldo Leopold pointed out, is a collective community of soils, waters, plants, and animals, and many of these elements can be claimed by the owners of the land that contains them. Since the public lands survey divided them into a forty acre grid, the lands of the western US have been made legible to settlers and investors seeking to claim the most productive lands.
One of the clearest examples of this process has taken place in the forested lands of the Great Lakes states, where much of the land has been claimed by corporate entities, including railroad companies, university endowment funds, and timber and mining companies. For much of the twentieth century these lands changed little, supplying the raw materials for the paper and lumber mills of the owners. In the late 1980s and early 1990s, however, changes in tax and accounting rules shifted the equation for corporate valuation of these lands. Many of these properties went to new types of corporate organizations known as Real Estate Investment Trusts (REITs) or Timberland Investment Management Organizations (TIMOs), entities that are now the largest private landowners in many states. These organizations are legally responsible for maximizing returns to their investors, either by continuing timber harvesting and increasing land sales for development, or finding other ways to bring in income from the forest like the sale of carbon credits and recreational leases.
In some cases, these organizations have actively approached large conservation groups like the Nature Conservancy or the Conservation Fund, or public agencies like the State of Wisconsin, to purchase portions of the land outright or pay for a portion of certain aspects through the purchases of “Working Forest Conservation Easements” (WFCEs). These agreements have gotten more complicated over the past decade, moving from basic prohibitions on development and limitations on property division, to requirements for maintaining specific amounts of habitat and abiding by certain management practices. Even wildlife, which is held in public trust under the North American model of wildlife conservation and can’t be claimed outright by a private landowner, may still be included indirectly in terms of a conservation easement, with agencies providing additional payments just to guarantee the public’s right to access a property for obtaining game species, medicinal plants, or other non-commercial forest resources. Behind nearly all of these projects is the implicit threat that the properties will be divided and the elements of the forest community and services destroyed or degraded. As it becomes clear that any aspect can potentially be of value, it becomes less likely that an investment-minded landowner will give up rights to any component without full compensation.
When these deals are completed, often with the support of large grants or public funding, the benefits are often proclaimed, though they often highlight aspects of the properties that are very different from the aspects of the resource valued by the owner.
The valuation of the individual elements of forested lands has clearly allowed governments and conservation NGOs to extend their reach and limit existing potential for destruction and fragmentation of private forestland. Landowners, especially corporate investors, are increasingly demanding full compensation for the rights they give up and the conditions they agree to, resulting in more complicated agreements that are intended to last in perpetuity. It remains to be seen whether the permanently divided and defined components of the land community will lead to greater stewardship and responsibility for these community elements by the increasingly complicated networks of distant owners, local land managers, or conservation groups.
Tracking and Measuring Environmental Changes
Government programs aiming to pay private landowners to provide ecosystem services—like conserved forestland or improved water quality—have not always been successful in demonstrating outcomes. But these programs do important work in focusing attention on the ways in which ecosystem changes are measured and tracked.
Over the past three years, I’ve been attending meetings and talking with people about a payment for ecosystem services (PES) approach to water quality improvement in a watershed in southern Wisconsin. The regional sewage district must comply with state and federal rules limiting the pollution they release into waterways. In order to comply, the sewage district is paying farmers and others upstream to reduce pollution before it reaches the sewage treatment plant. The pollutant—the nutrient phosphorus, which is highly concentrated in the manure and fertilizers spread on agricultural fields, as well as in urban leaves and pet waste—was dubbed “Public Enemy Number One” by the County Executive because of its role in promoting the growth of ugly, sometimes toxic algae that blooms on the watershed’s lakes every summer. Previous efforts to reduce phosphorus entering the lakes have not shown significant progress.
This watershed payment program is in a pilot phase—land managers are trying different options to reduce phosphorus in waterways, and seeing what sticks. Farmers are planting their fields with cover crops to keep nutrient-rich soils on the ground and out of streams; several municipalities have installed new stormwater basins to slow down and filter rainwater containing leaves and lawn fertilizers. Those involved have high hopes for the program’s ability to reduce phosphorus pollution more cheaply than a costly upgrade to the treatment facility. Yet no one can guarantee that it will work.
One outcome that is certain is that methods of phosphorus measurement and prediction will be rethought and recalibrated to track the progress of pollution reduction throughout the watershed.
Computer modeling offers a way to predict which areas in the watershed will contribute the most phosphorus runoff into streams and lakes. One of the commonly used models is SWAT—the Soil and Water Assessment Tool—developed to predict the impact of land-use practices on nutrient and sediment yields in large and complex watersheds. Inputs to the model include topography, hydrology, land use, and weather. But while SWAT is widely used across the US, its accuracy is contested by both modelers and decision-makers, due in part to changing precipitation, one of the model inputs. Of primary concern in Wisconsin, SWAT does not fully capture late-winter runoff through spring rains and snowmelt, a primary source of the phosphorus entering waterways.
In contrast to models, in-stream monitoring offers tangible water quality metrics to quantify nutrient inputs all along streams and rivers of concern. But monitoring gauges are expensive. And the timing of less pricey monitoring by volunteers can be tricky because results vary greatly over time as runoff changes seasonally and even daily in periods of high snowmelt or rainfall.
Producing modeled and measured data to demonstrate PES program progress generates certain expectations on the part of regulators, program participants, and the general public: the promise of quantifiable and trackable change creates interest and buy-in. But measurement methods are not perfect, and only a few experts fully understand the intricacies and limitations of modeling and monitoring watershed processes. To be sure, a nonprofit leading water quality efforts in this Wisconsin watershed is doing its part to educate the community on the complexities of watershed intervention—from recent changes in lake foodwebs, to intensifying agriculture and urbanization—that make it more difficult to produce quantifiable change. But even more public information is needed. Transparency with respect to the degree of uncertainty in measuring and predicting diffuse pollution should be incorporated into all aspects of this program and others like it. Unless the concerned citizens understand what modeling and monitoring conceal about ecological change, as well as what they reveal, market-based environmental programs may simply perpetuate the status quo.
Environmental Governance and Social Relationships
Contemporary environmental challenges have been described as “wicked problems” whose resolution depends on the capacity of different actors to communicate, negotiate, and reach collective decisions. Environmental governance regimes generate common framings of environmental problems through rules and decision-making procedures, shaping what is and is not thinkable for actors. As such, market-based approaches do more than optimize the efficiency and cost-effectiveness of conservation. Above and beyond their environmental impacts, they introduce new paradigms of social action and alter the ways that we conceive of our relation to the natural world.
For example, the concept of ecosystem services is gaining increasing prominence in policy discussions. Ecosystem services emphasize the instrumental benefits of conservation by focusing on the linkage between natural systems and human needs. Determining the functions that ecosystem processes support is central to efforts to attach an economic value to ecosystems. In turn, economists view valuation as a means to rectify market failures by incorporating positive and negative environmental side effects into the economy. For conservation, this has meant a shift from getting the right government policy to getting the right prices for ecosystem services. However, this perspective overlooks a range of issues related to how institutions influence land managers’ decisions. Approaches that strive to realize the market ideal go too far in treating institutions exclusively as a means for crafting and implementing incentives. Institutions must also be understood as arenas for social choice and negotiation around diverse values attached to natural systems.
Market-based approaches alter processes of social choice by restructuring three dimensions of environmental governance: incentives, legitimacy, and authority. Market instruments mediate interactions between land managers and the broader public in new ways. Because most ecosystem services are public goods, approaches like payments for ecosystem services focus on creating economic incentives for individual land managers to produce a positive externality—a benefit that accrues to someone else. Market-based approaches are built on ideas about self-interested behavior by rational economic agents. They differ from other mechanisms for resource management in terms of the sources of their legitimacy (mainly based on economic efficiency) and authority (voluntary and incentive-based participation).
While advocates imply that valuation of ecosystem services can simplify and depoliticize policy choices, market-based mechanisms are nonetheless political instruments that shape opportunities for negotiation among stakeholders. Different actors value different services, and trade-offs between services are the subject of explicit social choices. This process is far from devoid of power, conflicts of interest, and struggles over different representations of the relationships between humans and nature.
Eric Nost is a PhD student in Geography at UW-Madison. His research describes the concepts, tools, and institutions environmental regulators, non-profit conservationists, and private sector entrepreneurs produce and utilize to confront the effects of climate change. He is currently looking at efforts to restore coastal marshes following the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Contact.
Andrew L’Roe is a PhD candidate in Forestry at UW-Madison. His research examines the changes in corporate ownership of natural resources, and how actions by owners and managers are affected by conservation policies. He is currently studying forestland investors in northern and central Wisconsin. Contact.
*Chloe Wardropper is a PhD student in Environmental Studies at UW-Madison and a member of the WSC project team. Her research focuses on how agricultural conservationists in the American Upper Midwest produce and use measurements to track water quality. Prior to graduate school, she worked as a soil conservationist for the US Department of Agriculture’s Natural Resources Conservation Service. Contact.
Erin Kitchell is a graduate student in Geography at UW-Madison studying environment and development in West Africa. Her current research focuses on histories of environmental change, the multiple vulnerabilities of small-scale producers, and the ways in which social networks shape knowledge formation about climatic variability. Contact.