Separate utilities board for #Colorado Springs?

Pikes Peak with Garden of the Gods in the foreground
Pikes Peak with Garden of the Gods in the foreground

From The Colorado Springs Gazette (Billie Stanton Anleu):

When you pay that bill to Colorado Springs Utilities each month, you might not realize that Colorado Springs owns the four-utility organization, and it’s run by the City Council, which also functions as the Utilities Board.

Mayor John Suthers, Council President Merv Bennett and Colorado Springs Forward, a powerful nonprofit, want to see an appointed board take over governance of the $1 billion-a-year public entity.

Most City Council members don’t. They want either an elected board or no change at all. So Suthers and Colorado Springs Forward are pushing for a compromise – a hybrid board, with a majority of appointed members plus a few elected ones.

What’s the best model to govern Utilities? Through the City Council, as is done now, a different elected board, an appointed board or a combination of both? And if members will be appointed, who should appoint them?

Current Utilities Board members could recommend a switch to any of those new models, but they don’t decide whether a change actually gets made. That will be up to voters, the ratepayers themselves, who are expected to see a ballot proposal in April.

The hybrid board

This model is widely regarded as dysfunctional, and the Utilities Board voted unanimously May 25 to reject it as an option.

“The hybrid governance model is rare, for good reason,” said Jeff Tarbert, consulting facilitator for the Utilities Board’s governance review. “Any model that has the consequence of creating unintended factions or creates confusion concerning where a board’s ultimate fiduciary duty lies makes effective governance more difficult.”

Bennett said, “All the research we’ve done, in every instance, it (the hybrid model) created dysfunction. I could accept either (appointed or elected); I much prefer an appointed board.”

Board member Keith King said he sat on the Colorado League of Charter Schools’ hybrid board for 14 years and watched as fighting factions formed.

“In the end, it was a non-functioning board. A hybrid does not work well because people who are elected then are appointing people to the board. It makes for conflicts,” King said.

The league structure was changed four years ago. Now all its members are elected, King said.

Colorado Springs Forward leaders said in a statement to The Gazette they prefer the elected model: “While we see many advantages to the all-appointed option . we believe the hybrid of appointed and elected is the better alternative .”

The status quo

Some Utilities Board members believe they’re doing a fine job in that role even while serving on the City Council.

“If it ain’t broke, don’t fix it,” said City Council President Pro Tem Jill Gaebler.

“They say they want people who would focus exclusively on Utilities. Tell me who that is. Give me a name. Those who are qualified are probably CEOs of other companies, and I don’t think they’re going to have any more time than I do.”

That’s a reversal from Gaebler’s position six months ago, when she said serving Utilities and its committees took too much time. “I don’t think it’s fair to ask that much of a council that has a whole other role at $6,250 a year,” she said then.

Gaebler’s previous viewpoint resonates with some of her colleagues. As council members, they have their hands full working on marijuana regulatory reforms, a new strategic plan, a review of the City Code and myriad landslide, land swap, planning, rezoning and other issues.

The time crunch has become intense for a council facing contentious issues in a city of nearly a half million people while also supervising Utilities in the increasingly complex energy and water arena.

But Gaebler and others say they can oversee Utilities if they’re given better resources.

“The longer I look at it, the more I’m inclined to leave it with the City Council,” King said. “I’m not sure we’d be getting higher-qualified people running Utilities than what we’re already doing. If the council could have staff, the ability to do research, the ability to really govern . I think we would be able to govern it well.”

Board member Bill Murray pointed to a J.D. Powers study that ranked Utilities No. 2 in the West among mid-size utilities for customer satisfaction as proof that ratepayers have no issue with Utilities’ governance.

“In this particular case, the name of the game is control of the Utilities,” Murray said. “The mayor needs to control Utilities because he needs the money.”

But while some board members say they provide good accountability for Utilities, critics say City Council members lack scientific knowledge to run the enterprise effectively.

“This board – being elected and being politicians – they’re so easily swayed,” said Jacquie Ostrom, who served on Utilities’ Customer Advisory Group last year to help develop its Electric Integrated Resource Plan. “CSU works so hard to schmooze them and be their friend. We need to gain information and knowledge outside of CSU. . There’s just no way these politicians can bring the kind of expertise we need.”

“In the past,” said board member Don Knight, “we’ve had board members who won’t believe a single word the staff tells them, and we’ve had board members who will never question the board. Whether appointed or elected, we need a board that will know when you have to dig deep and question, when something doesn’t seem right on the surface or is an incomplete solution.”

Environmental activist John Crandall said competency is an issue, citing a previous City Council’s decision in 2011 to sign a $111.8 million contract for unproven coal-plant scrubber technology without putting the project out to bid.

“My emphasis is on competency,” said Crandall. “That’s what I want to see on the board, and we’ve never had that. It’s a hell of a job.”

Monument attorney Leslie Weise, a clean-air advocate, said City Council candidates aren’t asked about their qualifications to serve on the Utilities Board.

“It’s almost an afterthought that you have this extra duty to run a $1 billion business that’s highly technical, regulated and complex,” Weise said. “From what I’ve observed, it’s not functioning.”

Some ratepayers favor a governing board of experts in air quality, water quality, medical effects of air pollution and other specialties. That’s not the plan, though. Current members want a board of management experts, such as CEOs with business backgrounds.

The appointed board

A random check of municipal utilities about the size of the local department shows all have unpaid, appointed boards.

“I come from a nonprofit environment, where all our boards are appointed,” Bennett said. “Personally, I think we can get better talent through an appointed board.”

Said Suthers: “Utilities is getting more and more complex – the role of renewables, when to terminate coal-fired power. I would like to bring more expertise to the table. I would love to feel more comfortable with the Neumann Systems (scrubbers). You don’t get that kind of expertise in an elected board.”

Lincoln Electric System in Nebraska has nine board members representing the utility’s service area. The City Council can recommend nominees, who are chosen by the mayor and confirmed by the council.

The Knoxville (Tenn.) Utilities Board of seven commissioners nominates its own replacements, who then are appointed by the mayor and confirmed by the City Council. The board also appoints a president and CEO.

The public utility in Tacoma, Wash., has a five-member board appointed by the City Council.

The five-member board for the Orlando, Fla., utility consists of the mayor, three Orlando residents and one from unincorporated Orange County.

Orlando has a nominating board that vets candidates for appointments. When a seat opens, a few nominees are selected, and the sitting utilities board interviews them and chooses one.

And the five-member utility board for Chattanooga, Tenn., is appointed by the mayor and confirmed by the City Council.

But even if the Colorado Springs City Council appointed the Utilities Board, most current members don’t favor that model.

“I have not seen any appointments, whether by the mayor or fellow council members, that have not been approved for confirmation,” Knight said. “I don’t think we do a really good job of a complete vetting and getting the people’s input on it. The other concern I have, I’ve also seen nobody (appointed) ever get dismissed.

“If I buy stock in any company, and I don’t like what the board of directors is doing, I can sell my stock. I can’t do that as a CSU ratepayer. The ultimate accountability is to the ratepayers, and those are the voters. When you’re appointed, you’re also beholden to the person who appointed you.”

A new elected board

Like Knight, most other current Utilities Board members say if any change is made, it should be to a separate elected board.

Murray said he’d be willing to turn Utilities governance over to an elected board. “But that would be the only way I’d do it. . We’re very concerned about the appointment process because, historically, the mayor appoints, and you’ve never even seen who applied.”

Utilities Board Chairman Andres Pico, who initially balked at the idea of shedding board responsibilities, now says he’s willing to consider that change, but only to an elected board, which ratepayers overwhelmingly preferred in a recent survey by Utilities.

“With a company, the stockholders pick the board the majority of the time, and the board answers to the stockholders,” Pico said. “And that’s the same here: The citizens are the stockholders. I adamantly think an elected board is the way to go.”

Colorado Springs Forward, whose PAC endorses and donates money to candidates, said it can’t support an all-elected board because that would set up “a situation where election politics and special-interest agendas will dominate the election process, creating a highly politicized board.”

The Utilities Board expects to decide in July whether to recommend a change and, if so, what change or changes.

Whether appointed or elected, Bennett said, a change is needed. “We need a City Council who gives 100 percent attention to the city and a Utilities board who gives 100 percent attention to Utilities.”

“We’ve got a lot of capable people here in the city, and I think we can find the folks who can do the job,” said Councilman Larry Bagley, who is leaning in favor of an appointed board. “I don’t have any qualms about it being a separate board or different people doing it. I think it’ll work.”

Business voices come out in support of Clean Power Plan — GreenBiz #keepitintheground

Solar panels, such these at the Garfield County Airport near Rifle, Colo., need virtually no water, once they are manufactured. Photo/Allen Best
Solar panels, such these at the Garfield County Airport near Rifle, Colo., need virtually no water, once they are manufactured. Photo/Allen Best

From GreenBiz (Barbara Grady):

Tech titans Apple, Google, Microsoft and Amazon as well as global brand companies Ikea, Mars, Adobe and Blue Shield Blue Cross Massachusetts told a U.S. court Friday that they need the federal Clean Power Plan for economic reasons.

In two separate Amici Curiae briefs filed in U.S. Circuit Court supporting the EPA’s plan for reducing carbon emissions from the nation’s power plants by 32 percent, the corporate giants said without a “national carbon mitigation plan,” they face “undesirable business risk,” energy price volatility and higher costs.

With these arguments, the businesses seem to have flipped prospects for the Obama administration’s centerpiece climate change policy, which only a month ago looked dim after the U.S. Supreme Court ruled to delay its enforcement.

Since the eight companies collectively employ about 1 million people, account for nearly $2 trillion in market capitalization and are major energy consumers — the tech companies alone use 10 million megawatt hours of electricity a year — they have clout.

Their briefs refute some claims made by 27 states that are plaintiffs in the State of West Virginia, et al vs. U.S. Environmental Protection Agency case challenging the Clean Power Plan as an overreach of federal authority by the EPA in a way that would harm jobs and raise electricity prices.

Among the companies’ most interesting refutations? Their expansion plans depend partly on how they can procure low-carbon electricity.

New Interior rule to protect streams in coal-mining areas draws criticism #keepitintheground

Mountain top removal for coal mining
Mountain top removal for coal mining

From The Grand Junction Daily Sentinel (Dennis Webb):

A federal proposal to better protect streams from impacts of coal mining is coming under scrutiny regarding its level of necessity, particularly out West, and what benefits it would provide.

The National Mining Association is criticizing the proposal by the federal Office of Surface Mining Reclamation and Enforcement, saying it applies a nationwide approach to dealing with issues arising with so-called mountaintop removal surface mining in Appalachia.

“Obviously we’re very concerned about this (proposal), for the impact it will have on production,” said Luke Popovich, an NMA spokesman.

The Interior Department released the proposal last July, saying it would protect some 6,500 miles of streams over 20 years. It would replace regulations adopted in 1983, incorporating updated science and benefiting surface and groundwater, fish and wildlife, Interior said.

Companies would have to monitor stream conditions before, during and after operations, and the rule also addresses post-mining stream restoration. [ed. emphasis mine]

A rule adopted during the Bush administration in 2008 was challenged by environmental groups, who said it would weaken existing stream protections. That rule was vacated in a court ruling in 2014 and remanded for further action.

Adam Eckman, associate general counsel with the National Mining Association, said the Obama administration instead decided to develop a rule that “bears no resemblance” to the 2008 rule, which was narrowly aimed at a small set of issues in Appalachia.

“It really is confusing why this is being expanded out West to Colorado when Colorado has a nearly perfect reclamation record (by mines) and when no science related to impacts in the West has been cited at all” in support of the proposal, he said.

The NMA sees the rule, and other Obama administration moves including its court-challenged Clean Power Plan and its current moratorium on new federal coal leasing, as being part of an administration effort to eliminate coal-burning altogether.

Jeremy Nichols of the conservation group WildEarth Guardians said the proposal would impact Colorado’s underground mines only to the limited degree they have surface impacts, while having larger implications for surface mines like Colowyo and Trapper in northwest Colorado.

But he said a minimum level of such protections should apply nationally.

“Our clean water is just as deserving of protection as Appalachia’s clean water,” he said.

A study done for NMA estimates the new rule could cost up to 77,520 mining jobs, including potentially more than 10,000 in the West.

The Office of Surface Mining Reclamation and Enforcement says it could cost an average of 260 jobs related to coal production a year, which would be offset by an average increase of 250 jobs a year related to complying with the rule.

It estimates the compliance cost at $52 million a year, including $2.5 million for Colorado Plateau surface mines and $200,000 for underground mines on the plateau.

The NMA study estimates the rule could result in a 27 to 64 percent decrease in access to recoverable coal reserves, and up to $6.4 billion annually in lost federal and state revenue.

The Colorado Division of Reclamation, Mining and Safety has sent the Reclamation and Enforcement office a letter supporting certain details of the proposal, but listing a number of concerns about it.

It says the rules would require extensive permit coordination between Reclamation and Enforcement, the Environmental Protection Agency, the Army Corps of Engineers and states, which could delay permitting.

“The proposed rules do not account for regional differences in hydrology, climate, and mining methods/practices,” the Division of Reclamation, Mining and Safety added.

Environment: Mercury deposition increasing in West and Midwest

Summit County Citizens Voice

asf Mercury emissions from power plants are a global issue.

Asia’s power plants affect U.S. environment

Staff Report

Mercury levels in precipitation are increasing in the central U.S. but steadily dropping along the East Coast, scientists reported in a new study.

The findings suggest that mercury emissions from coal-burning power plants in Asia are on the rise, while they are decreasing in North America, according to Peter Weiss-Penzias, an environmental toxicologist at UC Santa Cruz who was the lead author of the study.

Mercury is a toxic element released into the environment through a variety of human activities, including the burning of coal, as well as by natural processes. Rainfall washes mercury out of the atmosphere and into soils and surface waters. Bacteria convert elemental mercury into a more toxic form, methyl mercury, which becomes increasingly concentrated in organisms higher up the food chain. Mercury concentrations in some predatory fish are…

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#ClimateChange: Carbondale carbon tax — The Mountain Town News

Carbondale is a town of 6,500 people located 30 miles west of Aspen. That’s Mt. Sopris, Colorado’s loveliest mountain, in the background. Photo source/Wikipedia - See more at: http://mountaintownnews.net/2016/01/15/carbondale-carbon-tax/#sthash.tUbLVIZh.dpuf
Carbondale is a town of 6,500 people located 30 miles west of Aspen. That’s Mt. Sopris, Colorado’s loveliest mountain, in the background. Photo source/Wikipedia – See more at: http://mountaintownnews.net/2016/01/15/carbondale-carbon-tax/#sthash.tUbLVIZh.dpuf

From The Mountain Town News (Allen Best):

Carbondale proposes to levy tax on carbon in electric, heat bills

Although one resident has called it ridiculous, residents in Carbondale in April will decide whether to adopt a carbon tax. If approved by voters in the town of 6,500 people, it would be among just a handful of municipal carbon taxes in the United States.

Proponents estimate that the tax would add an estimated $5 to $7 per month to the utility bill of an average home and $20 to $40 for an average business. It would not apply to sale of gasoline.

Under the plan approved by town trustees on Wednesday, revenue would be used to continue and expand programs to improve energy efficiency in homes and businesses and incentivize renewable energy. Funding has ranged from $65,000 to $100,000 for such programs, but the source of that funding—the town’s share of proceeds from natural gas and oil extraction in Garfield County—is expected to diminish in future years.

“It actually started with the trustees,” says Erica Sparhawk, of the non-profit advocacy group Clean Energy Economy for the Region, or CLEER. “This is a very educated group of trustees, dedicated to sustainability, and they take their clean energy goals seriously. So they asked us to help them research and analyze different potential funding sources, so that these kinds of programs without the town having to tap their general funds.”

With just a modest business and industrial sector, 60 percent of Carbondale’s greenhouse gases come from the town’s 2,400 homes. The town’s climate action plan envisions upgrades to those homes so that they use less energy and, coincidentally, are more comfortable to live in. The program being envisioned would address 1,000 homes in the next five years.

Trustees, as the elected members of the town board are called, believe it’s important to create n income-qualifying program, so that lower-incomer residents can benefit from the carbon tax.

Other potential use of revenues could include a large solar farm and a local micro-grid with battery storage.

Once a coal-mining town

The irony of Carbondale adopting a carbon tax is obvious. Mid-Continent Resource’s coal mine was a major payroll in the town for decades. The mine closed in 1991.

“What better place than a town called Carbondale to implement a local carbon fee and put talk into action?” asks Mayor Stacey Bernot, a native, who grew up in Carbondale when it was still a mining town.

But the demographics of the town have changed dramatically in the last 25 years, and Carbondale is now home to wide variety of innovators, creators and activists but also to a large population of immigrants who work in the construction and service sector of the Aspen-area economy. Latinos, mostly immigrants, compose 30 to 40 percent of the town’s population, and they tend to live in trailers and other lower-end housing.

Lately, carbon of another sort has concerned town residents, because of the potential for drilling for natural gas in nearby Thompson Creek Valley. It’s part of the broad swathe of the mineral-rich Piceance Basin that arcs across west-central Colorado.

Town residents have loudly opposed drilling, as they generally see drilling incompatible with the hunting and recreational uses of the valley. by one study, the Thompson Divide provides 300 jobs in the Carbondale-area economy.

Sparhawk says trustees recognize what some—including this writer—called out as an inconsistency: How can you oppose drilling in your backyard while using natural gas to heat your homes and, increasingly, to produce your electricity?

Trustees recognize the need to walk their talk, says Sparhawk. “If we are going to oppose drilling in the Thompson Divide, then we in the community need to lessen our demand for natural gas.”

Six funding mechanisms were evaluated as dedicated revenue sources for energy efficiency and renewable energy improvements in Carbondale, but after a series of work sessions with town trustees, efforts narrowed to the tax on carbon used for home heating and that proportionate of the electricity that comes from carbon sources.

Trustees are scheduled to finalize the ballot proposal at their Jan. 13 meeting.

Modeled on Boulder

Carbondale’s plan is modeled on the tax adopted in 2007 by the municipality of Boulder, Colo.. It is described on the Boulder’s website as the “nation’s first voter-approved tax dedicated to addressing climate change.”

The tax costs the average household about $1.33 a month and now generates $1.8 million a year. The tax is administered through Xcel Energy, which also provides electricity to Carbondale.

Boulder sustainability officials claim to that use of the tax money has been used to stop the growth of greenhouse gas emissions.

“What’s really interesting about Boulder’s carbon tax,” says Will Toor, a former mayor, “is just how popular it has been.” Boulder is deeply divided about whether to get a divorce from electrical provider Xcel Energy, but the 77 percent of voters last November decided to extend the tax through March 2023.

The tax applies only to electricity, and it exempts any energy produced without burning fossil fuels.

Other jurisdictions also have carbon taxes. In Arcata, Calif., a college town two hours north of San Francisco, voters in 2012 passed, by a margin of 68 percent to 32 percent, what they call an excessive electricity use tax. According to the city’s website, the 45 percent tax is assessed on residential household meters that use more than 600 percent of baseline electricity or more than an average of three residential households from one meter.

Washington D.C. also has a carbon tax levied on natural gas and electric bills. The tax in 2014 delivered $20 million to the Sustainable Energy Trust Fund, which is used to improve energy efficiency and expand renewable energy.

Just one mountain town in Colorado has flirted with a carbon tax. Joan May, an elected commissioner in San Miguel County, proposed a carbon tax on electricity and natural gas that would have generated $100,000 a year. Few towns are as liberal as Telluride, but the tax lost badly at the polls.

May says she failed to do her work in advance, leaving voters confused about the administration and use of the money. “I would solicit more support before we put it on the ballot,” she says. “It was basically ready, fire, aim.”

She says she wouldn’t change the proposal itself, though. Similar to Boulder and other programs, the money would have gone into a fund that could be tapped for energy efficiency improvements.

Argument against

In Carbondale, CLEER avoided May’s mistake in Telluride by holding community meetings. Still, there’s a bit of pushback. In a letter published in the Sopris Sun, Carl Ted Stude, a retired environmental engineer and a 10-year resident of the town, dismissed the idea as impractical.

It’s not the idea of a carbon tax that dismays him. He supports phasing in of a carbon tax at the national level. “I believe the preponderance of scientific evidence that emissions of carbon dioxide are contributing to global warming that will have long-term consequences that are more catastrophic than, say, a reduced ski season at Aspen.”

Stude sees a national tax being phased in

while subsidies and mandates for ethanol, wind turbines and cultured algae are phased out. But a municipal carbon tax in a small town like Carbondale makes no sense, he argues.

“A carbon tax at the local level would involve substantial administrative effort (read ‘economic waste’) in calculating and assessing the tax.”

Allyn Harvey, a trustee in Carbondale, doesn’t think administration will be inefficient. CLER has met with Xcel Energy, Holy Cross Electric and Source Gas, the three energy utilities, and it’s not a difficult process. A greater concern, he says, is the impact on Latino and other poor families, especially if nobody speaks English. “They may be leery of people knocking on their odors to talk about energy,” he says,.

But Harvey sees this as a major opportunities, not just for poor people to ultimately benefit from more comfortable, energy efficient homes, but for Carbondale to take control of its own destiny.

“If we wait for the federal government to take action and for partisanship to end so that we can enact a carbon tax nationwide, ti will be generations form now,” he sways. “I think there’s an opportunity for the local community tot take actions and do something about a problem that we all recognize.”

Turning the Corner on #ClimateChange in 2016 — Western Resource Advocates

From Western Resource Advocates (Jon Goldin-Dubois):

As we begin the New Year I am filled with hope for real and concrete progress to protect the incredible place we call home. The past year has provided a strong foundation that we can build upon to reduce climate pollution and to protect western rivers and landscapes. Here’s what I mean:

Coming out of the climate agreements negotiated by 195 countries in Paris that concluded in December, many of the world’s nations are expected to take their first steps to address climate change. For the U.S. and most developed nations, this means cutting carbon emissions. For developing nations, the accord calls for financial incentives that will help them leapfrog carbon intensive development. Importantly, the agreement endeavors to limit warming to 1.5 degrees Celsius (scientists argue we must keep warming to under 2 degrees Celsius to stop climate change’s most devastating impacts).

Certainly, some advocates have argued that the agreement didn’t do enough. To be truthful, I would have liked to see stronger commitments to cut carbon pollution more quickly as well. But I think the agreement provides reason for hope. I say this for several reasons, not least of which is the fact that earlier in 2015 the EPA issued the Clean Power Plan, mandating carbon pollution reductions from U.S. power plants of about 33%. Clearly that’s not enough to address the U.S. share, but it does send a very strong message to the rest of the world that the U.S. is prepared to take action. In issuing the new standards earlier this year on coal-fired power plants, the Obama administration and EPA have taken our nation’s first real steps to address the carbon pollution that we know is leading to climate change. The rules have some other compelling attributes, including cleaning up air quality in communities across the country, substantial reductions in asthma attacks and other negative health impacts of dirty air, and saving consumers money.

The Paris Agreement, coupled with the Clean Power Plan, sends a strong message to power providers but also offers some predictability (which utilities want) and sets the stage for a carbon restrained, if not a carbon free, future.

I’m also optimistic because we now know that clean energy sources such as wind and solar can compete with coal on a cost basis, and that they are getting cheaper every day. This is a big part of the reason that in 2014, far more clean, renewable energy than fossil fuel-based energy was added to the electric grid in the United States. We will soon see the 2015 numbers, but this trend is projected to continue. In 2015 major utilities in our western region stated clearly that clean, renewable wind energy is now predictably their lowest-cost source for energy generation. And several solar projects are beating coal and gas on a head-to-head basis, leading to new projects that will come on line in 2016.

My hope goes beyond recent action on climate change. The end of 2015 provided some expectation that we will begin to face up to some of the severe challenges to the health of our western rivers. In Colorado, Governor Hickenlooper signed the state’s first water plan. This year presents the first opportunity to take action that forwards the plan’s goals of conservation, reuse and water sharing. 2015 also saw Governor Sandoval in Nevada addressing the region’s water challenges as he convened a drought forum to develop solutions for Nevada. While it is still unclear what the ultimate impact of the current El Nino weather system (which can bring above average precipitation to the Colorado River Basin) will mean to the West and our water supply, it seems like it is finally sinking in that we shouldn’t rely on the weather when it comes to water. We need to take action throughout the Colorado River states to ensure that we have the water we need to serve 40 million people that rely on the River. But we also must ensure that our rivers not only sustain life in our cities, but also can continue to provide the thrilling opportunities to raft and fish, and the habitat to sustain abundant wildlife – just a few of the things that make the West so spectacular.

Don’t get me wrong. There are plenty of challenges.

  • The nations of the world need to respond to the Paris agreement in the spirit with which it was crafted. Individual countries (and our states here in the West) need to respond by developing aggressive plans to reduce carbon pollution.
  • Our western states similarly need to take smart steps to protect and restore our rivers, as we plan for population and economic growth. This includes conservation, reuse, recycling, sharing water between urban and agriculture users, and smart storage solutions.
  • There are several ill-advised – okay, let’s be honest – flat out stupid plans to develop oil shale and tar sands throughout wilderness-quality lands in northeastern Utah that are still on the table. These plans need to be stopped.

We’ll take on these and other issues, like protection of Great Salt Lake and other iconic landscapes in the West, while working to find smart solutions on the climate, clean energy and river- and water-related efforts described above by building on the many successes of 2015.

Six days in to 2016, and yes, I am truly excited and hopeful about the prospects for making even more progress to protect the many places that we care about here in the West.

From left, President François Hollande of France; Laurent Fabius, the French foreign minister; and United Nations Secretary General Ban Ki-moon during the climate change conference on Saturday in Le Bourget, near Paris. (Credit Francois Mori/Associated Press)
From left, President François Hollande of France; Laurent Fabius, the French foreign minister; and United Nations Secretary General Ban Ki-moon during the climate change conference on Saturday in Le Bourget, near Paris. (Credit Francois Mori/Associated Press)

USGS: Using the Markets for Environmental Science

Honeybees are important pollinators, an ecosystem service that is not always adequately accounted for in traditional markets. Image credit: Marisa Lubeck, USGS.
Honeybees are important pollinators, an ecosystem service that is not always adequately accounted for in traditional markets. Image credit: Marisa Lubeck, USGS.

From the United States Geological Survey (Alex Demas):

The invisible hand of the market might seem a strange player for environmental science, but it’s an emerging force for regulators and land managers. It’s these markets that have inspired USGS scientists Emily Pindilli and Frank Casey to explore how earth science and economics can join forces to achieve meaningful impacts for decision-makers.

Their research falls under a concept known as environmental markets. These markets won’t be found in Wall Street, but rather out on the landscape, as the natural environment provides many amenities that aren’t included in traditional markets. For example, when bees pollinate farmers’ crops, they’re providing an ecosystem service that benefits the farmer and society with a higher crop yield.

Emissions trading is one example of a market-based solution to an environmental problem. Image credit: Arnold Paul/Gralo via Wikipedia.
Emissions trading is one example of a market-based solution to an environmental problem. Image credit: Arnold Paul/Gralo via Wikipedia.

The Economics of Earth Science

So how does earth science fit in with the idea of environmental markets? The answer is information. Markets function most efficiently when buyers and sellers have as much information as possible. In the realm of environmental markets, that takes the form of scientific information about ecosystems, habitats, animals and plants, and other ecological players that help the environment operate.

USGS, then, is perfectly situated to provide information along those lines to emerging environmental markets. From water levels, use, and quality data from thousands of streamgages across the country to bird surveys that have spanned decades, USGS can provide important materials for these markets to function as effectively as possible. Agencies like the USDA’s Office of Environmental Markets can then take USGS data and use it to help foster and coordinate environmental markets.

However, that then raises the question of what kind of markets are being implemented and how do they work? Pindilli and Casey decided to take that on, using the lens of biodiversity to frame their investigation.

Sagebrush landscapes are important habitat for maintaining biodiversity in much of the United States. Image credit: Steve Knick, USGS.
Sagebrush landscapes are important habitat for maintaining biodiversity in much of the United States. Image credit: Steve Knick, USGS.

In the Market for a Solution

Biodiversity is under increasing threat, both in the United States and all around the world. Species are going extinct at a rapid rate, which is an indication of the larger issue of biodiversity and habitat loss. Biodiversity and habitat provide important ecosystem functions and their loss represents a significant risk to the stability of these systems.

So how can environmental markets help protect biodiversity? A first, and significant, step is to understand the economic values associated with biodiversity. Even more important is to align those values with reasons to actually protect and restore biodiversity. Enter the concept of environmental markets. These markets are designed to allow environmental goods and services to be produced and traded similar to goods and services in traditional markets.

A good example of a created environmental market is the sulfur dioxide trading market. Here, a set number of sulfur dioxide credits are issued which caps sulfur dioxide emissions at a certain level each year. These credits can be traded between parties, with the idea being that some facilities can reduce emissions at a lower cost than others. Those facilities can then sell those credits to facilities who would otherwise have to pay even more money to reduce emissions. By making money from the sale of the credits, those facilities that could most cost-effectively reduce emissions have a good reason to do so. This is a win-win, whereby the environmental goal is attained and it is accomplished at the lowest cost.

In the United States, there are a number of other developing environmental markets and similar mechanisms that seek to leverage market forces to achieve environmental goals. There are emerging markets in water quality, carbon emissions, wetland preservation, and for species and habitat protection. Among these are a number of market-based or market-like approaches that can benefit biodiversity. The USGS has recently evaluated the status and potential of the following mechanisms:

Bats provide important pest control by eating insects, and threats to their biodiversity imperil that ecosystem service. Photo credit: Paul Cryan, USGS.
Bats provide important pest control by eating insects, and threats to their biodiversity imperil that ecosystem service. Photo credit: Paul Cryan, USGS.

Getting What You Pay For

The first approach is known as “Payments for Ecosystem Services.” Here, a “buyer” pays a “seller” for the ecosystem service of biodiversity. The “buyer” may be anyone, such as the Federal government, a State agency, a local community, a non-profit, or even a business, while the “seller” is the individual or business that will supply protections for species and their habitats. An example of this approach might be a conservation stewardship program that pays farmers to set some land aside for wildlife, or maintain the riverbanks with trees to shelter fish. The least like a traditional market, payments for ecosystem services are essentially contracts that provide incentives to potential biodiversity suppliers with payments that don’t necessarily reflect a market-value.

The Ohlone Reserve Conservation Bank in California, one of the many conservation banks run by the U.S. Fish and Wildlife Service. Photo credit: Robert Fletcher, Ohlone Preserve Conservation Bank
The Ohlone Reserve Conservation Bank in California, one of the many conservation banks run by the U.S. Fish and Wildlife Service. Photo credit: Robert Fletcher, Ohlone Preserve Conservation Bank

Conservation Banking

The next approach is explicitly market-based: regulations are set up that lay the foundations for a market that includes property rights to an environmental amenity and the ability to trade. One of the best examples for biodiversity is the Conservation Banking Program run by the U.S. Fish and Wildlife Service. Conservation banks are areas of habitat that are protected and managed to meet the needs of one or more threatened species in perpetuity. These banks must be approved by the FWS under stringent protocols. With this approval, the banks can sell ‘habitat’ or ‘species’ credits. Demand for credits comes from developers that are required to mitigate actions like building roads that may negatively affect threatened species and their habitats under the authority of the Endangered Species Act.

When planning suburban neighborhoods, for instance, a developer might buy land to set aside as habitat in exchange for encroaching on existing habitat. Image Credit: Roger Auch, USGS.
When planning suburban neighborhoods, for instance, a developer might buy land to set aside as habitat in exchange for encroaching on existing habitat. Image Credit: Roger Auch, USGS.

Beyond the Bank

Taking the concept of the conservation banks even further, there’s the idea of habitat exchanges. The concept of a habitat exchange is to extend the conservation banking approach to protect species or habitats that are not currently federally listed as threatened. Habitat exchanges also seek to streamline the conservation bank approval process by developing and implementing Habitat Quantification Tools. These tools are used to standardize the evaluation of the number of credits on a given plot of land and increase certainty and transparency for landowners. Habitat exchanges are an emerging concept and demonstration on the landscape has yet to be fully implemented.

Organic labeling is one such example of using a label to educate consumers.
Organic labeling is one such example of using a label to educate consumers.

It’s all in the Label

The last market-based approach evaluated goes in a different direction: the idea of eco-labeling, similar to the concepts of organic and fair-trade labeling currently seen in grocery stores. Farmers, ranchers, and others can take actions that help protect biodiversity, and in so doing receive an accreditation and label their products to signify that they are protecting biodiversity. People can then reward these businesses by selecting these ‘green products’ over comparable items, even if they cost a bit more. That extra cost compensates the farmers, ranchers, and others for implementing biodiversity protecting practices. Eco-labelling is the most like a traditional market.

Read More:

  • Biodiversity and habitat markets: Policy, economic, and ecological implications of market-based conservation,” by Emily Pindilli and Frank Casey
  • USGS Science and Decisions Center
  • USGS Social Values for Ecosystem Services