Pay for performance is already generating results in the environmental field, from working landowners producing species habitat to mitigate mining effects, to green infrastructure pilot projects aimed at reducing stormwater flows into the Chesapeake Bay.
Nevada Conservation Credit System
The Conservation Credit System is a market-based approach to species conservation that ensures anthropogenic disturbances to sage-grouse habitat (debits) are fully offset by habitat protection and enhancement (credits), leading to an overall net benefit to the species. The State of Nevada used a Pay for Performance Seed Funding Strategy, providing the upfront capital to landowners to produce habitat conservation projects. Habitat outcomes are verified as credits and made available to BLM permittees to fulfill their compensatory mitigation requirements.
Central Valley Habitat Exchange
With 70 percent of the land in California’s Central Valley under private ownership, effective conservation for species must include programs compatible with working lands. Through the Central Valley Habitat Exchange (Exchange) farmers and ranchers will be paid to “grow” habitat for at-risk wildlife, such as flooded fields for salmon, riparian forest for Swainson’s hawk, and wetland habitat for giant garter snakes. The quality of habitat at a particular site is measured and used to design management plans to maintain or enhance the habitat functionality.
Willing landowners can sell their habitat to private and public investors seeking habitat for mitigation requirements or restoration mandates, or to private developers with standalone mitigation needs.The Exchange is currently evaluating the opportunities and constraints of various pay for performance strategies to facilitate habitat transactions.
Pay for performance has the potential to support almost any environmental problem. The power of this approach is not only in the issues it can solve, but also the opportunity to bundle performance contracting with other financing mechanisms.
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