Innovative financing schemes boost conservation

Conservation-minded citizens, corporations, nonprofits, and governments are developing new ways to finance their efforts at a time of tight budgets and waning government enthusiasm for traditional conservation programs, Harvard Program on Conservation Innovation Director James Levitt said Monday (Feb. 27).

Levitt, who also serves as a research fellow at the Ash Institute for Democratic Governance and Innovation, expressed optimism about future conservation efforts, largely because of the innovations being developed and implemented now.

With habitat destruction accelerating and more species being pushed to the edge of extinction, Levitt said spending on programs to preserve the environment should be doubled or tripled. Despite the need for increased spending, governments have been holding the line on conservation spending, leaving the environmental community to come up with new ways to raise money.

Some of those ways have proven very effective, Levitt said, and point to a future where conservation programs’ seemingly huge financial cost can be met.

“Conservation finance innovations may allow us to fill that gap,” Levitt said.

Levitt spoke at a brown-bag lunch event at the John F. Kennedy School of Government. His talk, sponsored by the Ash Institute, the Harvard Forest, and the Harvard Center for the Environment, was called “From Walden to Wall Street: Frontiers of Conservation Finance.”

Harvard Forest Director David R. Foster said this is a time of “great ambivalence” in the conservation movement. There are major questions within government over funding conservation programs, and similar questions about conservation action and setting ambitious goals, he said.

In the face of this, Foster said the conservation community is coming up with its own goals and ways to finance them. It is difficult, however, to bring news of innovative programs to individuals who can use it, such as landowners seeking to preserve their property in a natural state.

Foster said Levitt has worked hard to draw together conservation innovators and to communicate their ideas more broadly. Levitt’s latest effort is a book he edited on the subject of conservation financing innovations, “Walden to Wall Street: Frontiers of Conservation Finance.”

In his talk, Levitt outlined several examples of innovations in conservation financing, such as the sale of tax credits from land donated for conservation purposes, the development of a market for replacing wetlands destroyed by construction projects, a complex scheme to ensure Maine’s forests are kept as forestlands, and a Massachusetts law that allows cities and towns to levy taxes to buy open space.

An example of how the tax credit scheme works would involve a farmer who doesn’t want to see his or her land turned into a subdivision. The farmer would donate the right to develop that land to a nonprofit, which would hold onto those rights, ensuring the land is never developed.

In Virgina, for example, the donation would earn the farmer a potentially sizeable tax credit, say $50,000. If the farmer’s income isn’t high enough to fully use the tax credit, rather than losing it, he or she would sell the tax credit to a third party for a discount, $40,000, for example. This would give the third party a $10,000 tax break and the farmer $40,000 he or she would otherwise not have been able to realize.

Levitt said it sometimes seems that people think conservation programs are somehow un-American, but nothing could be further from the truth. He traced the rise of innovations in conservation financing back to the creation of the Boston Common in the 1630s. Settlers agreed to pay a tax to raise money to purchase land for the Common and it has been regulated for the common good ever since. The idea proved not only innovative, but enduring and transferable, leading to the creation of parks across the country.

Thomas Jefferson brought the private sector into the act when he bought the site of the Natural Bridge, a stone formation in Virginia, in 1774 to preserve it for future generations.

Conservation has been a national priority even in times of great national strife, Levitt said. Abraham Lincoln, in the midst of the Civil War, signed legislation protecting Yosemite for the people of California in 1864.

“There is innovation across the spectrum in conservation,” Levitt said. “The tools corporations use to sell soap can also be used to sell conservation values and I applaud that.”

Levitt ended the talk on a hopeful note, saying that the innovative financing schemes being developed today are spreading around the world.

“You can be prepared to expect wonders,” he said.