When you go to a restaurant you order from a menu, see the price, and pay after you get fed. You don’t send a check the day before your reservation to pay for labor costs in the restaurant kitchen and show up the next day and get served whatever they made (or nothing if the recipe didn’t work out).
Sounds crazy right? That business model just wouldn’t work – we buy food as a good, paying for exactly what we want at a known price – not a service which is the process to get there.
In most government-run conservation programs, we do the opposite.
Grants or contracts are given out for someone to carry out a process and are paid based on those activities, not on the outcomes the public is seeking: clean rivers, safe drinking water, healthy wildlife populations. If the process fails, everyone in the supply chain still gets paid, but the public loses.
We’ve been taking baby steps forward at the federal and state level to change that – to build a stronger focus on delivery of outcomes from government programs and reforms that allow agencies to buy results not process.
For example, a legislative proposal from Senators Stabenow (D-Michigan) and Ernst (R-Iowa), if adopted would allow one USDA “Farm Bill” program to provide “performance-based payments” to eligible farmers and ranchers.
Yet we have a lot to learn from social programs, which took a giant leap forward last month with Congress’s passage of the “Social Impact Partnerships to Pay for Results Act.” Lots of favorable reviews of this new law from the Impact Investing Alliance, America Forward and others. What does it do?
- Provides the Department of Treasury with $100 million in funding to support social outcomes achieved over 10 years, by local and state governments.
- Creates a new Federal Interagency Council on Social Impact Partnerships.
- Creates a new Commission on Social Impact Partnerships, with members appointed by the President and Congress.
- Puts 75% of funds to pay for the outcomes themselves and caps feasibility studies at 10% and measurement of outcomes at 15% of funds.
Similar authorization for USDA, Interior and EPA programs would transform government purchase of conservation outcomes and get better results for the public. One of the most important changes in the law is the ability to contract and obligate funding that might not be paid out for a decade. Limits on contract length in many natural resource programs kick in at 3 or 5 years – too little time to achieve and get paid for measurable conservation outcomes. The creation of a government Council and an independent Commission are important too – they elevate the importance of the approach, create a de facto problem-solving team across government and put Congress in the loop to hear about how programs are going.
How could similar legislation work for natural resources and conservation? Here are some suggestions, mirrored off the Pay for Results Act:
- Allow natural resource agencies (Interior, Agriculture, Commerce, Army Corps, EPA) to reserve up to 10% of funds from a set of programs to support impact partnerships led by states and local governments and require them to report to the Secretary of Treasury and Administrator of the Office of Management and Budget on the programs from which they plan to reserve funds for this purpose.
- Create a set of purposes for funding, including to focus on achieving measurable results, create environmental impact partnerships.
- Define outcomes which are a priority for the government and that it wants to purchase, like tons of erosion prevented, expanded storage of carbon in soil, and restoration of wetlands. (The Pay for Results Act includes more than 20 outcomes!)
- Provide direction for state and local applicants that allows them to develop and use practical, measurable metrics to evaluate outcome delivery, that are cost-effective to measure and track.
- Establish an intergovernmental Council or Task Force among agencies to help elevate the initiative and problem-solve and an independent Commission to provide ‘outside help’ to assist in reviewing funding applications, make recommendations on the development of metrics and provide other assistance needed by the agencies.
NRCS, the Forest Service, EPA, NOAA, and private businesses like Land O’Lakes, are all already taking steps in the right direction, but there are some fundamental barriers in policy that make it hard to government to only buy delivered conservation outcomes, not promises. Congress’ reform to social programs provide a playbook to make this work in environmental programs too.