Washington Marketplace: New Ways to Meet Conservation Goals

The future health of Washington State's natural resources, and specifically its native biodiversity, depends on the coordinated management of public and private resources. This presents the state with a difficult question: How can the public need to preserve and restore vital natural resources occur while still respecting the historically-established property rights of private citizens? One of the many possible answers to this question involves an emergent class of public policy that transfers principles common in commerce to the arena of natural resource conservation. This modern approach, often described as market-based public policy, frequently allows for conservation goals to be met in a less intrusive, more effective, and more efficient manner than traditional prescriptive approaches. The use of market-based policies to preserve a region's biodiversity, like mitigation banking and payments for ecosystem services, lacks successful precedent. Nonetheless, it still holds promise as a way to preserve and restore Washington's biodiversity in a manner that meets public goals and respects private rights. Specifically, market-based policy may be of particular use in filling gaps left by the current regulatory framework and in organizing isolated public efforts into a more comprehensive and congruent whole.

Biodiversity includes three major components: living organisms, their relationships with each other, and their relationships with the land, air, and water around them. It therefore includes most of what we commonly call nature and attempts to capture all of the naturally occurring differentiation and variability present in a given area. A robust level of biodiversity provides humanity with opportunities for economic gain, security against future disasters, and genetic knowledge. It also plays a key role in the provision of ecosystem services that help sustain and fulfill human life. Washington has been successful in preserving many portions of its native biodiversity. Yet, studies indicate that the state has not conceptually integrated biodiversity in to its broad plans for conservation, nor adequately assigned responsibility for its preservation. As a result, there seems to be a lack of coordination in the government's response to biodiversity loss, and significant gaps in its protection. One way to encapsulate these failings into a single concept is to label current conservation efforts as non-strategic or lacking in the identification of long-term goals and the means necessary to achieve them.

Market-based policies generally consist of three characteristics. First, they define a natural asset, service, or output. Second, they seek to measure that which they have defined. And third, they arrange for quantities of what is being measured to be paid for, or invested in, through market forces. Market-based policies therefore create opportunities for the owners of natural resources to profit by preserving them in, or restoring them to, their natural condition. Through careful institutional design, market-based policies can efficiently and effectively fulfill specific conservation goals involving biodiversity through private sector participation. They lend themselves readily to strategic implementation by focusing private conservation efforts geographically and topically around set goals.

Mitigation banking and payments for ecosystem services are two popular types of market-based policy used for conservation. Both assume that a defined natural landscape shares fundamental similarities that allows for a destructive or detrimental action taken in one place to be compensated for by a reconstructive or beneficial action taken in another. Mitigation banks serve as a means through which destructive actions are permanently attached to reconstructive ones in a targeted area. They generally emerge as a response to mandatory environmental-mitigation requirements imposed on developers. Ecosystem services are, roughly, the processes through which the natural world and its species sustain and fulfill human life. Payments for ecosystem services generally emerge as a response to scarcity, or a lack of needed natural processes or conditions that serve beneficial purposes.

For biodiversity, using mitigation banks and ecosystem payment arrangements is difficult because of the need to conserve many different natural aspects or elements (not just a single one). However, there are ways to mange the design and implementation of these tools to overcome this difficulty.

Special districts allow individual issues, within a defined area, to be governed by limited governments that are generally free from the influence of others that share their boundaries.

The advantages of creating special districts to handle biodiversity in Washington are many, but they all may be captured in the argument that a government agency with a singular task has a strong incentive to execute it well. Dedicated special districts therefore avoid the multiple and competing mandates that face regular agencies by allowing them to focus their efforts with minimal internal conflict. The key to using market-based policies to conserve biodiversity is to synchronize markets with the spatial limitations of special districts that have been designed around distinct areas of biodiversity. In other words, new geographic designations that encircle similar types of biodiversity could help unify conservation efforts by becoming the basis for special districting. These "ecoregions" could simultaneously be the jurisdiction of a government, the service area for mitigation banks, and the service area for the provision of ecosystem services. Such an institution, dedicated to conserving all native biodiversity, would be comprehensive by definition and allow for strategic decision-making at all levels of government.

An arrangement like this is not without its challenges, foremost of which is determining how to integrate and reconcile ecoregional special districts with the matrix of government institutions and policies already in place. However, strong leadership that understands the value of Washington's biodiversity, combined with innovative funding techniques and a willingness to change, may be able to overcome this challenge and deliver a durable public response to the pressing need for biodiversity conservation in Washington.

Introduction

Those interested in the management of Washington State's natural resources frequently note that around forty percent of the state's land is publicly owned. Federal, state, local, and special governments manage these lands using a complex and interwoven system of rules and laws. This vast body of regulation, instituted over the last century, has secured varying degrees of protection for the living and nonliving elements of these public resources. However, it has become increasingly clear that the future health of Washington's natural resources depends on the coordinated management of them on private, as well as public, property. This presents the state with a difficult question: How can the public need to preserve and restore vital natural resources occur while still respecting the historically-established property rights of private citizens? One of the many possible answers to this question involves an emergent, market-based, class of public policy. This kind of policy transfers principles common in commerce to the arena of natural resource conservation. Ideally, it allows for conservation goals to be met in a less intrusive, more effective, and more efficient manner than traditional prescriptive approaches. These newer policies, or market-based policies, have been used successfully to achieve valuable conservation objectives in a number of different fields. They have not, however, been used specifically to preserve the natural characteristics of any region in their entirety. In other words, the use of comprehensive market-based policies to preserve a region's biodiversity lacks successful precedent. The reasons for this are plentiful, as these policy options include significant design limitations and create difficult implementation challenges. They also rely on the fundamental assumption that the public interest can be served through the collective efforts of individuals seeking their own private interests; an attractive but unproven supposition. Despite these hurdles, and the recognition that market-based policies will never be used to the exclusion of other approaches, they can contribute to the preservation and restoration of Washington State's biodiversity in a manner that meets public goals and respects private rights. Furthermore, they may be of particular use in filling gaps left by the current framework of traditional public policy and easing the transition to more prescriptive approaches if necessary.

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