Colorado conservation bank aligns profit with species protections
Sometimes a tweak to business as usual is all it takes to conserve and enhance species habitat. Colorado has become a standout for its efforts to conserve and enhance habitat for threatened species.
In August, Colorado became home to its first private Fish and Wildlife Service-approved conservation bank for the Preble’s meadow jumping mouse, a species listed as threatened under the ESA. Colorado’s State Land Board leased 222 acres of state trust land for a conservation bank site protected by a conservation easement and managed as jumping mouse habitat. State trust land is public land traditionally leased for agriculture or extractive industries, from which revenues are directed to the state’s public school system. By Constitutional directive, the state has to use the land to create an economic return for schools. And while those lands are public, they are nearly always leased to private interests that do not permit public access, such as agriculture, oil and gas leases, private recreational use, or development. By expanding the definition of who can lease its state trust lands, Colorado is now the first state to lease state trust land to an ecosystem services provider.
The State Land Board isn’t allowed to approve leases like this based upon conservation features, but because of the revenue it provides for schools. Colorado will earn a royalty on the sale of conservation bank credits, which mirrors the deals they might enter with the oil and gas sector.
It’s good business for conservation bank investors, too. Conservation Investment Management (CIM), the bank developer, raised investor funds to support all the early work on the project. After CIM pays the royalty to Colorado State Land Board, investors in the project and CIM will keep the remainder to cover expenses and earn a profit.
CIM worked with the State Land Board to find the site and obtain Fish and Wildlife Service approval. They used GIS maps to identify the best areas of Colorado trust land for siting of a habitat project to protect the threatened jumping mouse. The site they selected was a good fit both because of its potential to offer restored habitat for the mouse and because it might otherwise have been leased for agriculture or development uses that would generate more resource impacts. The site, called Table Top Conservation Bank, neighbors a new Larimer County water reservoir project that will be the initial buyer for credits produced by the bank. CIM invested hundreds of thousands of dollars over five years for upfront enhancement to repair impacts from overgrazing, adding wildlife-friendly fencing, setting up a regenerative grazing plan and setting aside a permanent endowment for the property. Their investments in the restoration of the area will ultimately allow the land to recover on its own. Colorado Open lands, a local land trust, will steward the land and ensure the conservation easement is enforced.
Table Top Conservation Bank credits will offset impacts on a mix of public and private lands. We wouldn’t typically advocate for federal or state land-sited mitigation banks if they are used to offset private land impacts. If public lands have a multiple use or conservation mission, there is no additionality from a bank, and allowing them to be used as a bank rewards past agency and legislator disinvestment in needed land stewardship. However, school trust lands are a different category because they are required to generate income for schools. (For a definition of additionality, see Wyoming’s law – one of the best in the country.)
This project offers a couple of takeaways that could translate well to other states that have school trust lands. First, if a state can lease land for oil and gas exploration, it can make deals for ecological services, too. A simple mapping exercise can demonstrate the best opportunities for more banks. In most or all cases, private sector conservation bankers will be needed to bring the upfront capital and expertise to set up those banks and apply for leases. Second, the financial incentives and benefits can align to make business sense for public, private and nonprofit partners in conservation bank projects.
New infrastructure development will continue to create habitat impacts that need to be offset with high-quality species conservation projects. Copying Colorado’s model could make it more straightforward to fulfill that offset demand.
