Something remarkable is happening in California. Infrastructure agencies and local governments are building massive flood control and transportation projects, while also trying to create a lasting conservation legacy by providing net benefit for species and water. This is not an easy job in a state where permitting can sometimes take longer than designing and building a project. Particularly when infrastructure, habitat, and agriculture are often competing for the same scarce land and resources.
What we have long-needed is a way to coordinate and measure the effectiveness of mitigation and conservation efforts on a regional scale – enabling critical infrastructure development and maintenance, as well as a better way to understand net benefit for species.
Enter the Regional Conservation Investment Strategy (RCIS) program.
Motivated by expanding infrastructure development and lengthening permitting timelines, the California legislature approved Regional Conservation Investment Strategies as a way to synchronize regional mitigation and conservation priorities and actions, with an eye towards streamlining permitting. An RCIS is a voluntary plan that identifies habitat needs and priority conservation areas within a region. Once an RCIS is approved, Mitigation Credit Agreements (MCAs) can be developed and approved as advance crediting mechanisms that define
- Robust and transparent methods to assess and quantify habitat improvements, and
- Financial and legal requirements needed to ensure long-term conservation success
Resulting credits are recognized by the California Department of Fish and Wildlife as a currency that can satisfy California Endangered Species Act (CESA) permit requirements, and may be expanded to meet other permitting needs.
Pioneering a New Approach
Environmental Incentives and Environmental Defense Fund are developing the first-ever MCA with partners in the Middle and Upper Sacramento Regional Flood Management Plan region. This first MCA aims to align conservation and mitigation funding throughout the region, streamline permitting processes, and be the instrument to meet the conservation goals outlined in the RCIS. Given the agricultural and ecological richness of the Sacramento River, this first MCA is focused on projects with multiple benefits—improving habitat for listed species (Swainson’s hawks, Giant garter snakes) while maintaining agricultural productivity and enabling faster approvals of flood safety projects.
Our hope is that MCAs will allow farmers, ranchers, agencies, and conservation investors to be competitively paid for creating and stewarding high quality habitat. This first MCA will measure habitat outcomes and support adaptive management by applying the Central Valley Habitat Exchange’s Multispecies Habitat Quantification Tool. Beyond this effort, we hope this pilot MCA framework can provide a useful example for other regions across the state.
Expanding Opportunities for Conservation Innovation & Investment
MCAs will create advance mitigation credits, that when combined with a clear transaction model, can support greater investment in conservation across California. We are exploring several promising innovations onto this model, including:
- Quantifying Multi-Benefits & Net Benefits. California infrastructure projects are often expected to create a net benefit conservation legacy. Projects that generate multiple benefits, such as levee setbacks that create both flood protection and habitat, can be funded from several sources with different goals. The habitat credits produced from these projects could be purchased by conservation buyers to support net benefit goals, and the overall benefit of each project can be tracked and reported to ensure that species recovery goals are met.
- Pooling Credit Demand. Large infrastructure agencies could develop a pool of credits that they, or similar local agencies, could later purchase to meet mitigation requirements. This would leverage investments to create large, holistic conservation projects across the landscape, and save significant time, effort, and money as the mitigation process would be streamlined for each individual project.
- Conservation Investments for Recovery. MCAs can support more than just mitigation. Conservation investors, like state agencies, can purchase MCA credits to enable tracking of progress towards measurable conservation objectives and targets defined for focal species within an RCIS region. Agencies directing conservation dollars, such as state bond funding, could potentially also sell credits they develop to infrastructure agencies or other project proponents with mitigation needs. They could then recoup their initial investment through a revolving fund or similar arrangement, and support further habitat enhancements on other projects across the region to proliferate conservation projects at scale.
- Paying for Performance. The number and quality of conservation projects can be increased by leveraging pay for performance contracts to facilitate MCA transactions. Habitat buyers (i.e. infrastructure agencies) can purchase credits to fulfill their goals and permitting requirements in advance of project impacts, with assurances that the predicted habitat quality will be met and maintained. This reduces agencies’ financial and legal risk while streamlining the permitting process, and allows creation of well-planned conservation actions and habitat sites.
More and more, we will have to come together to create strategies that align infrastructure needs with conservation priorities on a regional level. The RCIS program and associated MCAs are a promising model for the future, worth replicating in other regions.
Written by Katie Riley and Dan Kaiser. Dan, Senior Manager for California Habitat Market at Environmental Defense Fund, engages agencies and landowners to create innovative conservation solutions for working lands in the Central Valley and beyond. Katie has led Environmental Incentives’ partnership with EDF on Central Valley conservation for the past 5 years.