Opinion US Feds Should Give Credit For Saving Unlisted Species, But Must Do It Right

29 October 2014 | The United States supports roughly 200,000 species of plant and animal, but less than one percent are protected by the federal government under the Endangered Species Act (ESA). The remainder are under state authority, sometimes managed on federal lands or subject to no oversight whatsoever. Thousands of those species are rare or declining.

Ideally, programs and policies would exist to encourage conservation efforts that help turn them around. The U.S. Fish & Wildlife Service (FWS) just proposed exactly that opening the door to an entirely new market for advance conservation credits.

In November, they will finish taking public comments on this proposed policy that would make it possible for the federal government to recognize credits generated by state-sanctioned conservation actions taken to benefit an unlisted species. Ideally, those actions will be enough to keep a species from declining further, but if the species ends up under federal protection, the credits can be used to offset impacts from development or other projects. As proposed, credits would have to be accumulated through an approved state-managed program, but those programs could potentially benefit any of thousands of species that are rare or declining. Credits can be bought or sold. Both private and public lands can be used to accumulate credits, which is especially important given that some states are nearly 90% public land. Federal land-management agencies are likely to be some of the biggest investors in projects that generate advance credits.

Yet in order to encourage any investment, the policy needs to be better designed.

Crediting programs and offset markets have little value if no one knows how to produce a unit of credit or its exchange value against a debit. Whereas wetland banks, conservation banks and even Habitat Conservation Plans have defined responsibilities for the development of such accounting systems, this policy still lacks much detail on whether it is state or federal agencies responsible for that work and what standards an accounting system needs to meet. This can be fixed in the final policy simply by looking at the approach taken in many of these mature offset systems.

The agency has proposed a strong conservation goal for the program a version o net benefit to the species conservation or recovery. Assuming they can work out the details of the needed credit reserves, mitigation ratios and other structures to achieve that goal, credits and debit traded using these prelisting credits will move listed species closer to recovery. This is quite distinct from the current standards for Habitat Conservation Plans and for federal projects. The respective goals of those programs are just to minimize harm and to avoid pushing the species too much closer to extinction. This is perhaps why the draft policy has attracted criticism from the National Association of Home Builders who say that the policy goes “above and beyond the mandate of the statute. The agency should stick to the proposed net benefit standard which is actually not at all inconsistent with the law’s standard requiring federal agencies to develop programs to contribute to species recovery, but they should clarify that it is not the credit generator but the permittee who will need to achieve this net benefit by paying for or developing their own set of offset credits. Doing so is also in keeping with the agencies strong approach to mitigation for the Greater Sage Grouse.

The policy also needs to take account of other programs that exist in the space of landowner assurances and offset markets. In particular, Candidate Conservation Agreements with Assurances and Conservation Banks. The three tools could work together seamlessly. Candidate Agreements provide a form of insurance landowners who take conservation actions won’t face additional regulation and get a permit that covers future harm they might cause to the species. It makes perfect sense to let landowners in these programs, leave them if they are willing to give up that permit and sell benefits to businesses or agencies needing offsets. Doing so would result in longer term protection. Second, participants in either program could serve as a farm team for conservation banks adding permanent protection and endowments in exchange for an even stronger preference for these credits in future offset markets.

Even without these repairs to the draft policy, the new proposal from the U.S. Fish and Wildlife Service is a watershed moment actions benefiting any of thousands of rare species can earn credits. Given that there are more than 20,000 species in NatureServe database  of U.S. plants and animals at risk, this is a new world of opportunity to benefit biodiversity through a market approach.