Nature conservation on private land is essential but undersupplied – economic tools can help

July 5, 2018

By Scott McFatridge

Healthy ecosystems provide vital services to society at multiple scales ranging from local to global. For instance, bird and insect habitats provide pollination and pest control services to nearby landowners. Wetlands provide a host of benefits for local municipalities, including water storage, water purification and flood mitigation. And agricultural lands, forests and other areas provide carbon sequestration and biodiversity services which benefit people worldwide.

Private land plays an important role in providing ecosystem services, although less than 11% of Canada’s total landmass is privately owned. Around 7% of Canada’s total land area is under agricultural use, and approximately 11% of Canada’s managed forests are privately owned – with private land supplying roughly 10% of Canada’s harvested timber.

However, these ecosystem services are increasingly threatened on private land (especially in the case of agricultural land), and some of the environmental harms generated by agriculture are increasing. From 1996-2016, Canada’s total farm area declined by around 5.6%. Water quality in Canada has also decreased from 1981-2011, due to an increase in pesticide and nutrient applications. And 13% of Canada’s farmland has seen a net decrease in wildlife habitat capacity from 1996-2011.

If left unchecked, agricultural intensification, land conversion for urban expansion, climate change, and soaring demand for food and building materials due to population growth and a burgeoning global middle-class, will increasingly strain the ecosystem services provided by private lands. Public policy is needed to manage these pressures and make informed trade-offs.

The good news is that many landowners are motivated to engage in nature conservation – but they need the right information and support, as well as the appropriate incentives. These incentives could include land acquisition (purchase), payment for ecological service schemes, conservation easements, and tax incentives. Rewarding nature conservation on private land provides policymakers with a golden opportunity to enhance nature’s services for the public benefit while ensuring viable livelihoods for private landowners.

Considerations for Policymakers

Although the decision about which ecosystem services to prioritize for investment needs to be informed by local processes and priorities, some general considerations can nonetheless guide decision-making and help policymakers improve outcomes. These include:

• Prioritizing services and places with the potential for the highest impact – beneficiaries need to prioritize amongst the services that are most important to them and negotiate trade-offs. Depending on the case, this information can be obtained through economic valuation methods or through a variety of non-monetary valuation methods and project prioritization tools.

• Ensuring collaboration to tackle shared priorities – each of these incentive tools requires collaboration among stakeholders such as private landowners, industry, ENGOs and governments. There are opportunities to leverage nature’s services on private lands and provide shared solutions at multiple scales, including the Municipal Natural Assets Initiative, the Canada-Ontario Lake Erie Action Plan, and the emerging market for carbon offsets in Canada’s land use sector.

• Choosing the right tool for the job – incentive schemes are not a one-size fits all tool. Land acquisition, conservation easements, payment for ecosystem services, and tax incentives occupy different ‘niches’, and in many cases are meant to address distinct (but related) conservation challenges. Moreover, in some cases, extension programs, technology development, or negative incentives (taxes and penalties) may be more appropriate than incentive payments.

• Implementing projects and programs as experiments, and learning by doing – a critical mass of incentive schemes for nature conservation should be implemented as field experiments – or quasi-experiments – which clearly specify what would have happened in the absence of the project or program (ideally, through a control group).

• Ensuring that a little trust goes a long way – landowners wish to be recognized and rewarded for their stewardship, but in some cases they are apprehensive about government involvement (since it raises the prospect of future regulations of their land use). Cultivating a sense of trust among landowners through active discussion and outreach can go a long way towards making landowners receptive to incentive schemes.

Securing ecosystem services on private land is going to be difficult - but with the right support and incentives to landowners, we can ensure that ecosystem services on private land bring the greatest benefit to landowners and society, now and in the future.

To learn more, check out Smart Prosperity Institute's latest Policy Brief on Economic Tools for Increasing Nature Conservation on Private Land.