What’s red hot in Green, Well, Environmental credit banking is something that is heating up to red-hot. And some might say “we” are going to get burned by it in the long run.
Not classically greenwashing, environmental credit banking is a huge and growing industry feeding on both our communal desire to save perceived habitat or delicate land, and the desire to develop sensitive land that would for whatever reason have too high a mitigation cost to build on without the credits.
Let me paint an admittedly simplified picture of how this works, and what I think is wrong with it.
A developer wants to build a housing tract “on the edge” of a natural wetlands area. The owner of the land, who for the sake of this little story we will say grew up on, and inherited this property would like to see the natural beauty, and value as habitat, protected of course, but is tempted by the offer (of way more money than she ever thought that the land would sell for, because she knows that the area is recognized as a sensitive environmental area). In fact, she has gone to many rather dry land use meetings about local growth and knows already that the property right next to hers was not able to be built on because of the possible impact to habitat. The developer explains that he is willing to take the risk and promises to take good care of the land; weather or not he is ever able to build on it.
Now, the temptation and the promise outweigh the owner’s fears and she sells.
Plans are drawn, surveys are done, testing happens and the local, regional, state, and national regulating bodies each have their say about mitigation and impact. It looks bad for our poor developer. His investment in the land was high for land that looks like it cannot reasonably be built on due to how much impact mitigation would cost. It looks great for the old seller who made a great profit from what she thought was monetarily low value land, and to feel even better about it, she took some of that money and donated it to a land conservation group that buys large sensitive acreage and deeds it as permanent protected land.
All warm and fuzzy! Right?
What she might not know is that the group that she donated to, a “not for profit” group that, is run by some very well paid people who are actually running an Environmental Credit Bank.
A what? But they can’t be developing the land that they buy up to protect. That would be fraud. Explain!
Ok, They are protecting the land that they buy, or often even have donated. They clean it up, do inventories of endangered species, spend time and money (both often volunteered, or donated) documenting the environmental value of this land that because of their efforts is now “environmentally even better” than before, they file the documents to forever protect that land, and they play up the great thing that they have done. By the way, getting even more donations from all of the great publicity.
What they don’t publicize is that what they have also done, through the documentation process, is been granted “Environmental Credits” for protecting the sensitive land. They then take those credits and simply sell them to developers that need to offset the impact that the developers want to make on other projects.
That is right, in many situations developers can quite literally buy their way out of cleaning up or adversely impacting an otherwise sensitive area.
This is not by any means the case in every project, nor is it the only business model that land preservation groups or developers use, but it is a dirty little secret that people don’t see.
Our seller who moved out of the area with her windfall, came back to visit old friends a couple years later. She was shocked at the unexpected growth on what she had though would always be open land (due to the sensitivity) that some over eager developer gave her, what she thought of as too much money for. “Dang, that was a great place to see birds before, I better give some more money to that group so they can protect more land in the future.”
Everyone made money in this example, some land was even protected, but honestly, what is the endgame on this practice? Does this look like the direction things should be going in to you? This is a tough one, as with the right people and the right projects this is a great tool and will do great things. The skeptic in me sees the opportunity for unscrupulous people to do permanent damage to areas that can never be repaired, all for a quick buck.
This same idea is used for clean water/watershed issues, “dirty energy”/”clean energy” species habitat preservation, and other related issues. Some of these deals are permanent some are binding for only a few years. How about the idea of buying partially cleared forest land, getting volunteers to donate time and effort to replant the land, then selling carbon credits, gained from holding the forest for twenty years, then at the end of the end of the credit period harvesting the forest for lumber. Boy it flips back and forth so much and is done over such a long time frame that the people don’t realize what is going on. On the other hand, if we are going to be using lumber we certainly should be replanting. It’s just that the less than transparent way this gets done, smacks of dishonesty. And the credits can be sold to a company that wants to use the credits to clear-cut today, or keep from making their power plant run cleaner at a higher cost to the shareholders.
Lots to think about. How do you feel about it?