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Banking on Sage Grouse Habitat

Banking on Sage Grouse Habitat: Developing Alternatives for Offsetting Habitat Loss. Photo by Noppadol Paothong, used with permission.Developing alternatives for offsetting habitat loss

Story by Lindsay White, NRCS

This piece is also available as a multimedia story.

Since 2010, nearly 1,700 ranchers have restored and protected 6.3 million acres of range land habitat through the Sage Grouse Initiative, led by the USDA Natural Resources Conservation Service (NRCS). Through the Initiative and Farm Bill conservation programs, NRCS has partnered with ranchers in 11 western states to implement science-based conservation practices such as invasive conifer removal, fence flagging, rotational grazing, and conservation easements to keep large ranches and key habitat intact.

These locally-led, partnership-based conservation efforts contributed to the Greater Sage-Grouse’s removal from the Endangered Species Act candidate list in 2015 and continue to make a difference.

Through the Conservation Innovation Grants (CIG) program, NRCS supports developing innovative alternatives for offsetting sage grouse habitat loss and disturbance stemming from energy and mining development. These approaches financially support conservation on Western ranches, attract non-Federal funding to sage grouse conservation, help ranchers generate new income streams, and serve as models for species conservation beyond sage grouse.

Habitat Credits for Sale

Wildlife habitat credits are generated by restoring sage grouse habitat. Land developers can purchase these credits to offset their habitat impact. Photo by Noppadol Paothong.Wildlife habitat credits are generated by restoring sage grouse habitat. Land developers can purchase these credits to offset their habitat impact. Photo by Noppadol Paothong.

Land developers use wildlife habitat credits, generated on restored land, to offset their overall habitat impact. It is often more cost effective for a developer to purchase credits from a landowner or credit “banker” than to complete land protection and restoration work themselves.

The following three CIG projects seek to develop habitat credits by working directly with ranchers to restore and improve sage grouse habitat and increase the quality of their ranch lands for livestock through conservation practices. Each funded in 2016, the projects provide wildlife habitat credits to energy and mining companies to offset their impact on sage grouse habitat while working on public lands.

Environmental Incentives: Nevada Bank Open for Business

A project highlighted in a recent a recent Pay for Success story map, has helped the state of Nevada create a sage grouse habitat conservation credit system. The Nevada Conservation Credit System developed and sold its first credits in November 2017.

Environmental Incentives, collaborating with Partners for Western Conservation, is working to expand the Pay for Success model beyond Nevada, having developed a toolkit to help other western states attract private funding for habitat protection and enhancement.

This recently released Pay for Performance Toolkit is now available online.

i2 Capital: Neighbors Helping Habitat

i2 Capital’s Upper Green River Conservancy pilots a co-op conservation banking model, working with neighboring landowners to restore habitat and develop habitat credits in southwestern Wyoming. The program packages habitat improvements of neighboring landowners, forming contiguous habitat acres and selling credits to developers through a single, cooperative model.

The following practices can be used to restore sage grouse habitat on rangeland:

  • Rotational grazing
  • Fencing to protect water quality and upland sagebrush habitat
  • Mitigating fire and reducing the spread of West Nile Virus
  • Managing invasive species including Russian thistle and cheatgrass​

K-Coe Isom: Planting Seed Capital to Grow Habitat

Sage grouse credit development can be a risky proposition for both investors and landowners because of start-up costs, regulatory uncertainty and other factors. To address these challenges, K-Coe Isom is developing a compensatory habitat mitigation catalyst fund to provide seed capital for projects that generate habitat credits on ranches. 

The fund helps reduce financial risk for landowners and outside investors. The catalyst fund provides loans to landowners for completing early-stage habitat value quantification, management plans, or habitat treatment activities. Landowners repay the loan once credits are developed and sold at a profit to the landowner.

K-Coe Isom provides funding to ranchers in Wyoming and Utah with  plans to expand to Montana, Colorado, Idaho, Nevada, California, and Oregon. 

They are currently working with the Oregon Department of Fish and Wildlife and Willamette Partners to provide catalyst funding for pilot projects in the state’s compensatory mitigation program.

They are also providing catalyst funding to landowners cooperating with the Nevada Conservation Credit System highlighted above when Nevada has a gap in funding. 

What's Good for the Bird is Good for the Herd

These CIG projects help landowners implement habitat restoration activities that are good for grazing cattle and sage grouse.These CIG projects help landowners implement habitat restoration activities that are good for grazing cattle and sage grouse.

Many of the participating ranchers in these projects are working land that’s been in their family for generations. They understand their land’s limitations and are drawn to opportunities to generate additional income while projecting and enhancing their family’s livelihood. Like NRCS’ Sage Grouse Initiative, these CIG projects help landowners implement habitat restoration activities that are good for grazing cattle and sage grouse: What’s good for the bird is good for the herd. 

Maximizing Habitat Potential

Each CIG project seeks to work with ranchers with large tracts of land, optimizing habitat credit development and providing contiguous habitat for the sage grouse.

The i2 Capital co-op pilot project partners first with an “anchor landowner,” with a significant amount of acreage of prime habitat. This land serves as a model landscape for the habitat assessment and crediting process. Once the anchor landowner completes the credit generation process, i2 Capital works with neighboring landowners to generate additional, contiguous habitat credits.

Likewise, K-Coe Isom focuses on properties at least 5,000 acres in size. The group completed habitat value quantification in early summer of 2017 on the Page Land and Cattle Company ranch in Carbon County, Wyoming. They are also managing a wildlife friendly fence installation for sage-grouse and ungulates at the Circle Bar Ranch near Fruitland, Utah.

This project is in partnership with the Utah Division of Wildlife Resource (DWR) and NRCS,  which is providing weed and vegetation treatments—including pinyon juniper removal. These large properties generate significant habitat credits and encourage neighboring landowners to join the project, creating a landscape-scale approach. 

Neighboring properties don’t need to be directly adjacent to add conservation value—habitat connectivity is the key for sage grouse. Ranches neighboring public land managed by BLM or the U.S. Forest Service can also provide habitat continuity.

Strengthening the Case for Investors

Investors in these projects are often mission-driven, interested in environmental or social impacts as well as financial returns.Investors in these projects are often mission-driven, interested in environmental or social impacts as well as financial returns.

Ultimately these projects anticipate private investor participation, whether from philanthropic program related investments (PRI’s) or investment capital. Cultivating private capital is a challenge for project partners, particularly given the uncertain regulatory climate regarding sage grouse protections.

Likely investors are mission-driven, interested in environmental or social impacts as well as financial returns. An investor with a special interest in habitat conservation or working ranchland may be willing to engage in higher risk investments, like the three CIG projects highlighted in this storymap.

Funding from CIG covers the early stage costs and financial gaps provided by other entities, allowing project developers to prove an investment concept. If successful, the Federal investment in these habitat development projects could be leveraged many times over. Ultimately, these CIG projects can spur investment and return in working lands, helping producers become planners and partners in conservation, and extending the mission of NRCS to help people help the land.

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Since 2010, nearly 1,700 ranchers have restored and protected 6.3 million acres of range land habitat through the Sage Grouse Initiative. Photo by Noppadol Paothong.Since 2010, nearly 1,700 ranchers have restored and protected 6.3 million acres of range land habitat through the Sage Grouse Initiative. Photo by Noppadol Paothong.