Environmental Protection

Study Finds Governments Using Markets to Save Species

Cash-strapped governments around the world are turning to market-based schemes that preserve endangered species by incorporating the cost of habitat destruction into the cost of development, according to “State of Biodiversity Markets: Offset and Compensation Programs Worldwide” a new study compiled by Ecosystem Marketplace.

The report documents 39 government-mandated “compensatory mitigation” schemes around the world and 25 others in the works. Such schemes require developers to avoid damaging natural habitat when possible and force them to rescue or restore habitat equal to or greater than that damaged if they do impact nature.

More than 600 “species banks” or “mitigation banks” operate within these schemes. Such banks secure commercial or degraded land and return it to its natural state to generate offsets for developers who damage habitat. When properly-structured, mitigation schemes generate a net environmental benefit by creating a natural habitat that is both larger than the area damaged and potentially better integrated into the regional ecosystem.

Roughly 70 percent of all species banks are private operations that seek to earn a profit, while others are government-run utilities or non-profit organizations.

Only 20 percent of the projects generate price data, but these revealed a market of between $1.8 billion and $2.9 billion per year. Additionally, the schemes place at least 86,000 hectares of land under conservation management or permanent legal protection per year.

The report offers a region-by-region breakdown of existing and impending projects in North America, Latin America, Europe, Asia, and Africa, as well as an analysis of the unique legal framework within which each scheme is being implemented and the means of incentivizing private-sector investment.

Ecosystem Marketplace provides news and information on markets and payment schemes for ecosystem services. It is a project of Forest Trends, a non-profit organization that works to create and capture market values for ecosystem services. The report is public and freely available due to financial contributions from the United Nations Development Program and the Global Environment Facility; as well as Commission for Environmental Cooperation, New Forests; and USDA Forest Service – International Programs, Markit, Grantham Foundation, eftec, and the Nature Conservancy.

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