EFFICIENT GROUNDWATER PRICING AND WATERSHED CONSERVATION FINANCE: THE HONOLULU CASE

Several studies have documented that intertemporal water allocation in Hawaii (as elsewhere) is inefficient (see e.g., Moncur et. al., 1998). The result is widely expected to be early depletion of groundwater resources and the resulting need for using expensive and exotic technologies such as desalination. The problem is further complicated by the presence of saltwater underneath most of the freshwater lenses in Hawaii. Increasing groundwater extraction over time will drive the freshwater head levels lower until the existing well installations will start to pump out saltwater. Once the wells become saline, it is very hard to reverse the process. The consequences of these conditions, in terms of the economic value of waste, are unknown. Moreover, recharge of groundwater aquifer is affected by the condition of forested watersheds. Amount and nature of vegetation cover affects the rate of recharge and the amount of groundwater stored in an aquifer available for pumping. Many communities have given watersheds a practice of protective zoning that eliminated the worst threats, including road construction and subsequent urbanization that significantly reduce permeability and recharge rates. Zoning alone may no longer be sufficient for meeting the increasing demand for fresh water, however. Increasing threats to forest quality, including change in forest composition due to the rapidly growing problem of invasive species, may justify significant conservation expenditures. Maintenance of watersheds needs to be considered in an integrated framework in order to assess the size of the problem and the potential gains from policy reforms. The overall objective of this paper is to combine existing hydrological, engineering, and economic knowledge in order to estimate efficient water use in the Honolulu aquifer zone on Oahu, HI. We compare welfare gains under efficient pricing and usage with welfare under current pricing and usage. In addition, we incorporate the effects of watershed conservation in the form of probabilistic changes in recharge. We then compare the welfare gains from efficient pricing without water conservation to that with watershed conservation. Finally, we articulate practical pricing schemes (particularly block pricing) for achieving efficient use with return of water pricing revenue back to the consumers. We derive efficient water use and prices over time for the study area with and without the watershed conservation plan proposed by the state Department of Land and Natural Resource (DLNR). Present values of status-quo (pricing-at-cost), efficiency pricing alone, and efficiency pricing with additional conservation spending are compared. We show that efficiency pricing alone provides substantial welfare gains over status-quo. Efficiency pricing combined with watershed conservation improves the welfare further. Under plausible parameter values, the fall in efficiency prices afforded by conservation is more than enough to finance the conservation expenditures. This is a 'win-win-win' for water consumers, taxpayers, and environment.Resource /Energy Economics and Policy,

SLIDES: The Trust for Public Land: Conserving Land for People

Presenter: Ernest Cook, Senior Vice President, Conservation Finance Program, The Trust for Public Land, Boston, MA 19 slide

SLIDES: The Trust for Public Land: Conserving Land for People

Presenter: Ernest Cook, Senior Vice President, Conservation Finance Program, The Trust for Public Land, Boston, MA 19 slide

National Conservation Finance Strategy- Bolivia Case Study

This is a case study about the evolution of thinking in Bolivia on how to attain sustainability of thei

California Carbon Offsets and Working Forest Conservation Easements

California’s cap-and-trade system is a vital laboratory for testing the effectiveness of this market-driven approach in meeting greenhouse gas emission reduction goals and the use of forestry-based carbon offsets within these systems generally. Based on this experience, this Article explores one of the primary challenges, layering offsets with working forest conservation easements, which currently limits opportunities to effectively use these tools in concert. Ultimately, this market may need to foster and rely on natural linkages with working forest conservation easements to develop these offsets and to better ensure that the critical societal objectives of these projects are being met

CHALLENGES AND OPPORTUNITIES FOR BENEFITS-SHARING: IMPROVING EQUITY IN CONSERVATION FINANCE

The field of conservation finance has grown steadily in recent decades, as countries recognize and value their biodiversity and seek sustainable financing pathways to safeguard its protection. Roughly 89 Conservation Trust Funds (CTFs) have been established within more than 50 countries. CTFs are considered a cornerstone of sustainable biodiversity financing and serve as a legally independent entity that can raise, invest and disperse funds to amplify conservation impact. Increasingly, conservation practitioners recognize the integral link between successful conservation outcomes and sustainable development of local stakeholders and indigenous communities as resource owners and stewards (Gurney et al., 2014; Carranza et al., 2020). Benefits-sharing mechanisms, such as delivery of economic incentives to local stakeholders, can improve achievement of integrated socioeconomic and ecological objectives of CTFs. Despite their presence within most CTFs as well as their critical importance for local ownership and fund sustainability, benefits-sharing mechanisms are underrepresented in the conservation finance and Conservation Trust Fund (CTF) literature. This analysis demonstrates that benefits-sharing mechanisms, although poorly documented within CTFs, are critical to the long-term success of CTFs. Similarly, the establishment of benefits-sharing mechanisms and socioeconomic monitoring, enables CTF practitioners to effectively deliver benefits within local community context, and ensure equitable distribution of benefits among different stakeholder groups. The Palau Protected Area Network and Sovi Basin Protected Area are used as dual case studies that demonstrated the opportunity and importance of benefits-sharing within CTFs

Financing Marine Conservation: A Menu of Options

This guide describes over 30 mechanisms for financing the conservation of marine biodiversity, both within and outside of MPAs. Its main purpose is to familiarize conservation professionals i.e., the managers and staff of government conservation agencies, international donors, and nongovernmental organizations (NGOs) with a menu of options for financing the conservation of marine and coastal biodiversity. A number of economic incentive mechanisms for marine conservation (as contrasted with revenue-raising mechanisms) are also presented in section 5 (on Real Estate and Development Rights) and section 6 (on Fishing Industry Revenues). Each section provides a description of the financing mechanism and examples showing how the mechanism has been used to finance marine conservation. In some cases, even though a mechanism may have only been used to finance terrestrial conservation, it has been included in this guide because of its potential to also serve as a new source of funding for marine conservation. This guide is not intended to provide detailed instructions on how to establish and implement each of the different conservation financing mechanisms. Instead references are provided at the end of each section for sources of additional information about each of the mechanisms described. Citations to specific references are also included in the text in parentheses

Indonesia Sustainable Fisheries Value Chain Assessments

Wilderness Markets, with the support of the David and Lucile Packard Foundation and the Gordon and Betty Moore Foundation, undertook a series of fishery value chain assessments to better understand the opportunities and constraints for private impact capital to flow into wild-capture fisheries markets in Indonesia. Building on extensive impact-focused investment experience in agricultural value chains, the objectives were to:*  Identify and categorize potential impact investment opportunities in wild-capture fisheries utilizing a combination of impact investment frameworks.*  In the absence of impact investment opportunities, document value chain constraints preventing such opportunities.*  Support the creation of sustainable wild-capture fisheries investment strategies by identifying appropriate frameworks for the assessment and development of intervention opportunities.Wilderness Markets assessed four developing country fisheries (DCFs) in two countries, with a particular focus on Indonesia, plus one fishery in California, US, for comparison. This document focuses on Indonesia and summarises our assessment of the blue swimming crab, snapper, yellowfin and skipjack tuna seafood value chains. Each fishery assessed provided a piece of a larger puzzle, allowing Wilderness Markets to identify the components of a sustainable seafood value chain and its relationship to stock health which, in turn, drives value chain health.This document provides a summary of the findings in Indonesia