The winning formula for private land conservation

by Hyungjin Choi BA’16 (6/6/13)

Hyungjin Choi BA’16

Henry Tepper, President of Mass Audubon, talks about the challenges and rewards of financing private land conservation initiatives.

Henery TepperIn today’s world where pollution and distortion of nature are prevalent, the work of land trust and land conservation initiatives merit substantial attention. The notion of preserving the ecological balance and beauty of our natural surroundings, however, seems to be easier said than done. In particular, the act of engineering the legal and political framework of these initiatives involves multiple parties and complex agreements. Henry Tepper, President of the Massachusetts Audubon Society, joined the Finance and Sustainability Colloquium to discuss the mechanisms behind private land conservation initiatives in the U.S. and Chile, two countries where land trusts are most active.

Land trusts are private land conservation initiatives that set aside and preserve habitat, scenic areas, or historically/culturally significant backgrounds. They do not usually attempt to change laws to promote pro-environmental terms like advocacy groups. In fact, land trusts do not take advocacy positions.  Mass Audubon, however, is the exception simultaneously serving as an advocate for environmental laws, policies and regulations as well as a land trust.

Private land conservation depends on the voluntary actions of private land owners. Landowners agree to have land trusts preserve their lands while retaining the ownership of the land. The concept of conservation easements is grounded in English common law: the idea of sharing a neighbor’s source of water, for instance. Isolating the right to develop and preventing the development of land is the core concept of conservation easements.

According to Tepper, landowners are willing to commit to this partnership for two reasons: a genuine concern for the well-being of their land and the financial incentive they receive once in agreement. These financial incentives can come in various ways. Tax savings such as income tax deductions and estate tax reductions, flexible legal agreements, and financial compensation through public-private land acquisition funds are some of the major ways.

Land trusts in the United States have been hugely successful and the numbers indicate likewise. Over the last 8 years, over 1700 land trusts and agreements have been formed and approximately 57 million acres of land were permanently protected. Tepper explained that the winning formula is composed of conservation land, willing land owners, conservation easements, tax incentives, and finally land trusts to facilitate transactions.

Among the components of the winning formula, Tepper singled out the conservation easements as the most significant. As explained above, conservation easements work on the idea of separating the development rights to a land. Tepper listed several reasons for the success of conservation easements. First, the ability of landowners to retain the privacy of their lands seems to be appealing. Second, the tax easements provide another incentive for landowners. Third, the limited development permitted to landowners allow them to allot a small portion of their land for private use, as long as it does not interfere with the successful maintenance of the land. Tepper added that most land trusts take place in fairly built areas that still have some sort of ecological importance.

Tepper cited the Columbia Land Conservancy in Chatham, NY as an example of a successfully engineered conservation easement. Contrary to the success land trusts have been experiencing in the U.S., the record in Latin America is abysmal. Tepper attributed several reasons for this difference. One of the primary challenges is that of converting the concepts behind English Common Law to Napoleonic laws, the predominant legal framework in most Latin American countries. The lack of stable rule of law and a host of socioeconomic challenges are also obstacles that land trusts must maneuver.

Amidst the unfavorable conditions, one country is receiving particular attention for its progress in the Latin American land trust market. Chile, the 2,700 mile long and 250 mile wide nation on the Western coast of Latin America, is becoming one of the most active markets for land trusts. The reason for such development in Chile is its private sector-dominated market. Its major industries are ones that work directly with the four major extractive industries in the country: mining, timber, fishing, and agriculture. Intelligent leaders of these industries are leading land trust activities in Chile.

The Chilean Private Land Conservation Initiative operates on a strategy that closely resembles that of the U.S. Most of the challenges and differences seem to come from the legal structure. Tepper identified two different goals in developing land trusts in Chile. The long-term goal is to establish formal enabling legislations, called derechos de conservación. The short-term, and the much more manageable goal, is to argue for a practical conservation easement template under existing law, or servidumbre voluntaria.

Companies like Patagonia Sur, LLC have been making progress in activating land trusts in Chile. Valle California, an eco-tourist area in Chile, is a successful case. With 6 designated limited development areas, 93% of the area is designated for conservation.

There are many challenges in need of creative solutions. Creating tax incentives, for instance, is an issue that has to be resolved legally. Securing stable financial support for the land trusts is another. Despite the challenges, Tepper projected that the future is positive. With each land conservation initiative, we are moving one step closer to creating a sustainable future.

Written by Hyungjin Choi BA’16.