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Water and Other Saleable Values

Timber and carbon are the two most readily identifiable ecosystem assets with a well-defined market value. There are other less well-known assets, however, that have strong market potential. The value of some assets can be gauged from their inclusion in regional regulatory programs, while others will be developed simply on a ‘willing seller - willing buyer’ basis. These values can play a significant supporting role when integrated with other key revenue drivers.

Water: Forests and wetlands are critical in capturing, managing and mitigating water quality and quantity. A lack of clean water is a global issue and is receiving a level of interest and investment commensurate with its importance (see www.ecosystemmarketplace.com/, for links and information). As the human population and development pressures continue to rise, access to adequate, high quality water will be at a premium. Properties located in areas where water is a limited resource may be able to derive significant revenues (in the form of direct payments, for example) for projects that promote its conservation and sustainable management either directly, or in conjunction with other ecosystem goods and services.

Wetland banking: The first wetland mitigation banks were developed in the US nearly two decades ago, and in 1995 federal agencies formulated guidelines for this type of conservation tool (see www.dfg.ca.gov/habcon/conplan/mitbank/). As a result, the US has a small, but established wetland banking program that requires developers to offset wetlands damaged during infrastructure or real estate development. Wetland banks can sell the ‘credits’ generated from the creation, restoration, enhancement, or preservation of wetland areas to developers. Wetlands often overlap with other ecosystem assets, and can be associated with key biodiversity areas in the landscape, play a specific role in water quality management, etc.

Endangered species banking: The mitigation-banking concept developed for wetlands is now also being used to aid conservation of rare and endangered species. In May 2003, the US Fish and Wildlife Service produced a set of conservation banking guidelines to ensure consistency among conservation banking efforts and provide landowners a greater understanding of their obligations. Most conservation banks to date are in California, the only state with an official conservation banking policy and associated procedures (see www.dfg.ca.gov/habcon/conplan/mitbank/), but a few other conservation banks are in operation. Two examples are a red-cockaded woodpecker conservation bank in Georgia, and in Alabama a bank for gopher tortoise conservation. A given species is added to the bank when a landowner purposely retains or enhances its habitat or breeding population and the banked credit is then used to offset the negative impact on that species of commercial development conducted elsewhere. Endangered species banking is a subset of biodiversity banking, and hence its development is complementary to an overall basket of biodiversity assets.

Green Real Estate: It is not uncommon for timberland companies and private landowners to realize profit by selling off their “higher and better use” lands to real estate development. Typically, these properties are sold in a ‘bare-land’ condition meaning that all valuable timber has been removed prior to sale. In terms of ecosystem goods and services, this represents a degraded condition. Environmentally responsible real estate development (‘green development’) is a land-use planning concept that takes account of the community-wide and regional environmental implications of development, and includes site-specific green building concepts (see www.smartcommunities.ncat.org/). Green development projects are proliferating across North America. They often command a price premium in the marketplace and enjoy additional benefits including lower operating costs for residents, increased comfort, higher perceived value, reduced sprawl, and protection of the natural environment. Careful planning is the cornerstone of successful green development and the ability to integrate green spaces and other site impact mitigation strategies can greatly enhance green building opportunities. 3GreenTree sees the opportunity for real estate development lands to be strategically integrated within a portfolio of ecosystem service revenue drivers where, for example, carbon can provide revenue from retained forest, while the retained forest can add value to the real estate valuation.

 

3GreenTree can evaluate and develop any of these additional ecosystem services. These opportunities fit very well within an integrated portfolio approach, where a suite of ecosystem revenue drivers can be planned and managed to improve total returns, diversify risk, and increase market flexibility.

Contact 3GreenTree to learn more…

 

Copyright 2012 3GreenTree Ecosystem Services Ltd.

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