What is Conservation Finance?
Conservation finance is an emerging sector that seeks to find new financial vehicles and approaches to attract funding to conservation. Some define conservation finance narrowly as the practice of raising and managing private capital to support conservation. NRCS approaches conservation more broadly, supporting the development of a broad array of new and supplemental funding sources to implement natural resource conservation solutions on agricultural and forest lands.
Why is NRCS Involved?
NRCS provides technical and financial assistance to landowners and agricultural producers on millions of acres of agricultural and forestland every year. Nevertheless, a gap exists between NRCS’s available resources and the total conservation need on America’s private lands.
Conservation finance can help fill that gap by finding new sources of economic support for rural communities, developing new revenue streams and sources of capital for agricultural producers, and attracting non-Federal funding to private lands conservation. Conservation finance helps extend NRCS’s mission of Helping People Help the Land.
How NRCS Works on Conservation Finance
NRCS works through existing programs and policies to explore the development of innovative conservation finance approaches.
Conservation Finance at Work at NRCS
- Banking on Sage Grouse Habitat – Developing Conservation Finance Alternatives for Offsetting Sage Grouse Habitat Loss
Early Support for Pilot Projects
Programs like Conservation Innovation Grants (CIG) provide financial support for proof-of-concept conservation finance activities, lowering risk for innovating entities and priming the pump of early-stage conservation finance markets. CIG funding provides the support and backing to test new financial vehicles and approaches until they are ready for scaling and replication in more mainstream markets.
The success or failure of conservation finance approaches often rests on the ability to credibly measure the impact of conservation interventions. Those investing in conservation must be assured that they are indeed getting value for their investment. NRCS works with partners to develop ecosystem services quantification tools to estimate conservation performance. These tools provide credible, science-based measurements that can help NRCS understand the impact of agency activities while also providing support for conservation finance activities.
In 2017, NRCS supported Encourage Capital as it developed and published a research and analysis report titled NRCS and Private Capital: Investing in America Together. In the report, Encourage Capital identified opportunities—using both existing authorities and also proposing new authorities—for NRCS to improve its ability to leverage its Farm Bill funding with private capital to expand the agency’s conservation reach on working lands.
Related Programs and Projects
The Regional Conservation Partnership Program (RCPP) provides support to locally driven, public-private partnerships that improve the nation's water quality, combat drought, enhance soil health, support wildlife habitat, and protect agricultural viability. Applicants must match or exceed the federal award with private or local funds. Potential conservation partners include Indian tribes, state and local governments, water districts, universities, private industry, and non-government organizations, making RCPP an ideal program for supporting conservation finance projects.
In 2016, NRCS funded the new Gulf of Mexico – Forest to Sea RCPP project which will conserve Florida's pristine "Big Bend" area along the northeastern Gulf by implementing innovative conservation solutions with private working forest owners. Using an impact investment approach, The Conservation Fund and 12 partners will implement an easement and restoration plan on large forested tracts to address the natural resource concerns while allowing sustainable timber harvesting and maintaining local jobs. The project will serve as a model for further conservation and impact investing in the region and beyond.
Building the Conservation Finance Community
In 2015, NRCS provided a CIG award to the Conservation Finance Network to establish the Conservation Finance Practitioners Roundtable. The Roundtable meets 2-3 times a year and is a forum for conservation finance practitioners and stakeholders to convene, deliberate obstacles and challenges, and generate solutions to increase the amount of private capital, institutional investments, and other sources of non-Federal funding dedicated to natural resource conservation.