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SECTION II:  POTENTIAL STRATEGIES
Group B.  STRATEGIES THAT PROVIDE INCENTIVES FOR CONSERVATION ON FARMLAND 

Strategy B2: Provide incentives for farmers and landowners to take part in a market based conservation program

DESCRIPTION

A consortium (including American Rivers, Environmental Defense Fund, PRBO Conservation Science, Environmental Incentives and Trout Unlimited, Delta Conservancy, and California Department of Conservation) has proposed development of exchanges in which private landowners produce habitat, or otherwise improve environmental quality, and package those accomplishments as credits for sale.  Buyers could be either investors or permit-seekers, such as agencies or entities needing to comply with environmental regulations or mitigation requirements.  A third-party program administrator would link buyers, producers and regulatory agencies.  The consortium is developing the outline of a habitat credit exchange that could be used to improve both flood protection and habitat in the Central Valley and Delta. 

The operation of habitat credit exchanges would require creation of scientific techniques to measure benefits (credits), both as acreage and as habitat quality.  The consortium is developing such a measurement tool for rice fields, and aims to use it in a pilot project that would compensate rice growers for creating and maintaining high-quality fish habitat.  A second pilot project seeks to develop and measure habitat credits for Swainson's hawk, focusing mainly on alfalfa fields and other agriculture-based foraging habitat.

Credits are envisioned as being available on specific land parcels for a fixed period, rather than permanently.  Thus, an owner could enroll a parcel and then opt it out of the program at the end of the contract term.  The program aim is to keep sufficient acreage enrolled so as to maintain the desired number of credits at all times.

ISSUES

Most environmental market credit programs are in development at this point; neither the crediting process nor the standards that define acceptable habitat projects have been defined.  The first few projects will have the burden of proving the feasibility of the programs, including their ability to integrate with existing programs, such as HCPs/NCCPs.  Another issue will be whether and how such programs will deal with situations that require mitigation measures to be provided in perpetuity. 

If you would like to provide feedback on this strategy, please click the following link: Agricultural Stewardship Strategy Feedback Form

ALS Workgroup: ALS Framework and Strategies: Section II:  Strategy B2 Market based conservation: 061014