Introduction and summary

The Dust Bowl was a watershed moment in American history—one of the earliest warning signs that the risks of poor environmental management can have spillover effects across society. In the 1930s, millions of tons of valuable soil were blown off the Great Plains, stripping agricultural potential from the region. Thousands of families lost their farms and were left to start over or join mass migrations to more promising parts of the country.

The drought and dust storms laid bare the inextricable link between healthy lands and the health of a nation. For many, they were a wake-up call as to how poor land management practices can lead to devastating and far-reaching consequences for the economy, people, land, water, and wildlife. This realization resulted in a shift in how governments and businesses viewed their collective responsibility to the environment. For example, the U.S. Department of Agriculture (USDA) implemented a soil conservation program in response to the Dust Bowl. Over the subsequent 80 years, the USDA also incorporated into its conservation efforts programs to conserve wildlife habitat, to use fertilizer more efficiently, and to protect wetlands and streams. These programs have helped prepare American agriculture for droughts and protect important ecosystems.

Yet despite the widespread impacts of environmental issues on the nation’s health and economy, conservation efforts are chronically underfunded. Recent research suggests that, globally, about $300 billion in annual spending is necessary in order to maintain or restore the ecosystems and natural processes critical to human well-being. However, global philanthropic and government expenditures only amount to approximately $40 billion each year—well short of what is required. To avoid an experience akin to the post-Dust Bowl reckoning of the 1930s, policymakers need to expand how they think about conservation and conservation funding.

One approach for growing the existing conservation funding pool is to engage businesses and attract private capital. Many private entities—from water utilities to Fortune 500 companies—directly benefit from clean water, clean air, and other environmental benefits that conservation can produce. Novel financial instruments, markets, and pay-for-success programs have the potential to engage these supportive groups—and attract billions of dollars in private investment to solve environmental problems—by providing incentives such as direct payments or cost savings to companies and landowners.

The market potential exists; more than $1 billion in private capital has been invested in North American environmental markets since 2015. Still, an estimated $3 billion in additional capital is earmarked for conservation but on hold for projects that are ready for investment. Because these goods and services—clean air, clean water, and wildlife habitat—are often free and accessible to all, they are not something around which a market typically develops. As a result, government agencies have a particularly important role to play in developing innovative programs and policies to grow nascent markets and secure the services that landowners provide to consumers, companies, and the country by improving natural systems. This type of market has already emerged for certain types of environmental restoration, such as the wetland mitigation banking industry, and presents a way forward that will draw greater private investment into conservation on working lands.

In the United States, the largest single source of public conservation funding comes from an unexpected piece of legislation: the farm bill. Although the bulk of the farm bill focuses on commodity subsidies and nutrition assistance, the most recent version allocated more than $5 billion in annual funding for various conservation programs. The farm bill is also a venue to set policy and pilot new programs that grow conservation on working lands in order to balance production of crops, timber, and livestock with environmental quality. For example, new efforts, such as the Regional Conservation Partnership Program, have used existing USDA conservation funds to leverage more than double their federal expenditures through collaborations with businesses and nongovernment organizations (NGOs). The next farm bill provides a unique opportunity to expand on this type of program and grow the pool of conservation funding.

The Center for American Progress and the R Street Institute often approach policy challenges from different perspectives. However, we were inspired to work together on this report because we jointly recognize the scale of the conservation challenges that the nation faces—and the power of the farm bill to address them. The recommendations offered in this report provide a bipartisan approach that draws on measurable outcomes and market-based incentives to increase the social, economic, and environmental benefits of private lands conservation.

We recommend several actions to leverage public funds to pull private investment off the sidelines and effectively double the impact of working lands programs under the conservation title. Specifically, the next iteration of the farm bill should do the following:

  • Enable the USDA to support pay-for-success programs, environmental markets, and other conservation innovations. The bill should expand the USDA’s authorities to better attract private investment and support wider adoption of conservation practices, including allowing the use of pay-for-success contracting models to improve performance; streamlining enrollment processes to support conservation partnership programs; and creating a revolving loan fund or loan guarantee program to share financial risk with landowners and businesses as they invest in environmentally friendly pursuits.
  • Support USDA investments in conservation innovation.The bill should double funding for Conservation Innovation Grants (CIG) and expand its focus to include grants, loans, and other startup support to help innovative, market-focused projects become established.
  • Incorporate ecosystem services into USDA data collection. The bill should commit to timely research on the economic value of conservation activities. Quantifying the benefits of conservation will help draw investments that support existing programs.
  • Focus research on program design and implementation. The bill should introduce new social and economic research efforts to understand how and why landowners participate in conservation programs—such as technical assistance, environmental markets, and partnerships with private investors—to help refine policies and programs so that they reap the greatest benefits for landowners and the public.

These actions have the potential to benefit businesses, landowners, and communities that are tied to the condition of agricultural and forested lands.

Read the rest of the report by downloading it at the top of this page or read it online here

About the authors

Ryan Richards is a senior policy analyst for Public Lands at the Center for American Progress, where he focuses on natural resource economics and markets. His past work has covered a variety of topics, including water policy, ecosystem restoration, and private lands conservation.

Mary Ellen Kustin is director of policy for Public Lands at the Center. Prior to joining American Progress, she was a senior policy analyst on food, agriculture, and conservation issues at the Environmental Working Group.

Caroline Kitchens is federal affairs manager and a policy analyst at the R Street Institute, where she focuses on agricultural and conservation policy. She leads R Street’s advocacy efforts and outreach to federal agencies and lawmakers regarding the farm bill.

William Murray is federal energy policy manager at the R Street Institute. His work covers market approaches to energy and environmental issues, including climate change and fuel choice diversity.

Image credit: MaxyM