*Ryan Richards cowrote this op-ed.
The Dust Bowl was a defining moment in 20th Century American economic history, when a combination of drought and poor farming practices in the mid-1930s destroyed the topsoil of thousands of farms throughout the Great Plains and Middle West.
Fast-forward 75 years to the period between 2011 and 2012, when another drought swept across the Central Great Plains. The severity of this drought eclipsed that of the 1930s drought that triggered the Dust Bowl. Yet the same environmental calamities did not take place, thanks to decades of investment in soil management and conservation techniques by both government agencies and the private sector.
In the past decade or so, a private market for conservation and ecosystem repair has sprung into existence. Novel financial instruments, like “pay for performance” contracts potentially worth billions, have helped solve environmental problems by providing incentives to companies and landowners. Yet there is no doubt that overall, conservation efforts are chronically underfunded. Research shows that global philanthropic and government expenditures on ecosystem support amount to only 10-15 percent of the $300 billion in annual spending that may be necessary.
With tight federal budgets as far as the eye can see, policymakers need to think about how to think outside the box regarding conservation and conservation funding if they want to avoid future experiences akin to the Dust Bowl. The 2018 farm bill represents a unique opportunity to leverage untapped private investment in conservation and better ensure taxpayer return on investment.
A new study co-written by the Center for American Progress (CAP) and the R Street Institute highlights how the farm bill’s reauthorization provides a unique opportunity to leverage private investment in conservation. The farm bill is the largest single source of conservation funding in the United States — approximately $5 billion annually. As the study explains, U.S. Department of Agriculture (USDA) programs and authorities can be easily modified to better attract private investment. By some estimates, $3 billion in private capital is available to fund things like clean air, clean water, and wildlife habitat, and that number will grow if properly supported through legislation.
While it may be unusual to see center-left and center-right organizations like CAP and R Street coming together on a policy program, we were inspired to work together because we jointly recognize the scale of the conservation challenges our nation faces, as well as the power of the farm bill to address them.
The report’s recommendations provide a bipartisan, market-based approach to increasing the economic and environmental benefits of ecosystem conservation. Several examples in the report show how these environmental markets can work.
For example, the Agricultural Department’s Natural Resources Conservation Service (NRCS) is currently working with rice farmers in Arkansas to generate carbon storage credits through improvements in their irrigations management. The credits are then sold to Microsoft to offset the company’s emissions. In Nevada, ranchers are working with the USDA to restore sagebrush ecosystems to save habitats for the threatened greater sage-grouse. Companies are starting to pay for this restoration to offset the impacts of their development. And in Washington, D.C., the water utility DC Water launched its first environmental impact bond in 2016, paying investors based on measured improvement in water quality.
With the bill up for reauthorization this year, lawmakers should consider expanding USDA’s authorities to better incorporate pay-for-success contracting models, including the creation of a revolving loan-fund within the NRCS to attract private investment.
Finally, Congress should expand the Conservation Innovation Grants program, which has supported dozens of novel conservation programs and calls for the investment in timely, publicly-available research on the economic value of conservation activities. Some conservation funds should also be devoted to research on how and why landowners participate in conservation programs in order to better understand the motivations of landowners.
By elevating these efforts in the 2018 farm bill, conservation policy can take a step into the future, a future that provides high returns on investment for the public and the economy while addressing a range of environmental problems that have a history of underfunding.
Image credit: Jenoche