Using Multi-Credit Trading Markets to Improve and Maintain Biodiversity, Watershed Quality, and Other Environmental Protection Goals

• Author: John Rogers, Bill Wallace, and Elise Bacon
• Pages: 425-440

Chapter 25

Using Multi-Credit Trading Markets

to Improve and Maintain Biodiversity,

Watershed Quality, and Other

Environmental Protection Goals

by John Rogers, Bill Wallace, and Elise Bacon

I. Introduction: Need for a New Model of Incentives for Integrating

Environmental Protection Programs

Ever since Rachel Carson’s book Silent Spring raised public environmental

consciousness over 40 years ago, the United States has done an exemplary

job of restoring and protecting the environment.1Over the years we have put

in place a string of powerful laws protecting the air, water, and land from

dangerous pollutants. During that time we have also added laws to protect

endangered species and preserve biodiversity.

Unfortunately this progress has come at a cost. Every new law,regulation,

and program has added to an already heavy regulatory burden, on both the

regulated community and the regulators. Regrettably,these efforts to protect

the environment have been developed around a single media (e.g., air, water,

hazardous waste) or a single issue (acid rain, environmental cleanup). Now,

after years of activity, we are left with a “stove piped” set of regulatory pro-

grams, each with its own unique goals, scope, programs, funding sources,

and stakeholders. Past efforts to rationalize our environmental control sys-

tems have not been successful. For example, the Enterprise for the Environ-

ment program created in the mid-1990s by William Ruckelshaus offered a

modest plan for integrating the U.S. environmental laws, but few if any of

the recommendations have been implemented.

425

1. Rachel Carson, Silent Spring (1962).

A. Situation Today

What we have today is an uncoordinated (and occasionally irrational) patch-

work of requirements that are often at odds with economic development and

social equity.The existing system seems ill-equipped to handle the pressures

we place on our natural resources. And the weaknesses are starting to

show—in new growth moratoria, in new environmental messes, and in a

host of less dramatic but cumulatively significant events and circumstances.

Within this framework, politicians, citizens, utilities, and land use manag-

ers have limited or even shrinking resources with which to address poten-

tially competing objectives:

·Improve water quality;

·Restore and maintain ecosystem functions;

·Reduce air emissions;

·Protect and restore critical habitats;

·Manage and improve coastal zone resources;

·Provide energy and material resources;

·Offer recreational amenities;

·Deliver water to agriculture;

·Provide quality drinking water;

·Manage water supply quantities;

·Equitably allocate responsibilities for pollution control expendi-

tures; and

·Support economic development.

B. A New Approach to Environmental Management

A new approach is needed for environmental management that can integrate

the increasingly complex array of environmental programs into a more bal-

anced and sensible management scheme, while still maintaining the same or

greater level of environmental protection. This new approach should incor-

porate economic incentives and market-based mechanisms in combination

with standards and regulations as an evolution of traditional command and

control. This use of economic incentives and market-based mechanisms will

harness environmental entrepreneurialism to deploy innovation. The faster

we can improve water quality, enhance wetlands, expand riparian forests,

and reestablish habitat and ecosystem functions and thereby foster biodi-

versity conservation, the smaller many of our environmental and economic

development problems will become.

This chapter proposes a new way of addressing environmental protec-

tion and recommends launching pilot projects to test and develop the type

of program advocated here. This new approach addresses many of the

program integration issues and it can reduce significantly the cost bur-

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Biodiversity Conservation Handbook