🌲 The Paradox of Agricultural Conservation: An Interview with Texas Agricultural Land Trust CEO Chad Ellis
This week, I interviewed Chad Ellis, CEO of the Texas Agricultural Land Trust (TALT), to discuss the shifting notions of conservation over time, and how we should think about ecosystem service markets and increasing land productivity within the purview of conservation. Ellis is a former Regional Rangeland Management Specialist for the USDA NRCS and worked in a variety of roles for the Noble Research Institute. Additionally, Ellis is the Chairman of the National Grazing Lands Coalition, Board Chair of the Ecosystem Service Marketplace Consortium, and on an advisory board to the U.S. Secretary of Agriculture. I’m fascinated by the heterodox nature of conservation, as it appeals across the political spectrum and seeks to balance productive land use with ecosystem services. Ellis’s insights and TALT’s stature reveal how this alleged trade-off might become a thing of the past through ecosystem service markets, more accessible conservation easement processes, and overall re-alignment of profitability with stewardship.
The Role of Land Trusts and Conservation Easements
TALT is a bellwether case study in the world of conservation. Put simply, they work with landowners with agricultural working lands, wildlife habitats, or natural resources to put the land under conservation easements to protect the land from development and general misuse. The focus is on providing private landowners the legal and procedural toolkit to become long-term land stewards. As Texas is the second-largest agricultural state in the U.S., generating $115 billion a year for the economy, the stakes are high. Agricultural lands are becoming more and more fragmented and, historically, the main incentives to account for the opportunity cost of not maximizing a land’s production value lie in the land steward’s affinity for regenerative land management and tax incentives.
TALT’s theory of change revolves around a key question that Ellis poses to himself every day: “how can we empower the land steward and producer to be better tomorrow than today?” Doing so requires a mix of technical assistance, legal support, and plenty of creativity. The conservation easement, which is perhaps the most frequently used tool in their kit, is a voluntary legal agreement between a landowner and a conservation organization or government agency that permanently limits a property’s uses in order to protect the property’s conservation values. This can be donated into perpetuity, which qualifies for a tax deduction based on the assessed loss in land value from the lack of potential development. Agricultural conservation easements seek to maintain the viability and productivity of agricultural lands. It’s a flexible tool in the sense that it can have different purposes, be it for recreation, the protection of biodiversity, and other services. However, it isn’t cheap: easements generally cost between $75,000 and $100,000 in transaction costs, monitoring costs, legal services, and other indirect services.
However, this is a unique time for easements and new structures for conservation. Though there are roughly 61 million acres conserved by land trusts according to The Land Trust Alliance, as Chad put it, there are “more challenges than we’ve ever had to conservation due to climate change, population growth, and overall land fragmentation that’s creating more pressure on lands to produce more of what’s left.” Texas, in particular, is “losing more land daily than anywhere in the nation” - meaning it’s time to “get outside the mindset of this is what we’ve always done” to find pathways to an “ROI for conservation.”
Ellis is seeking to cut through this gordian knot by advocating agricultural conservation easements that allow for “freedom to operate.” While easements and conservation structures were written in line with the best ecological understandings of their time, land stewards need to have the flexibility to adapt to newer practices that result in better ecological outcomes. For instance, Ellis alludes to the need for “ecological disturbance” through managed grazing and fire to protect a land’s conservation value. An easement or a 100-year carbon credit project is making a decision on land for future generations that one will never meet. Thus, creating avenues for folks and families to achieve environmentally successful outcomes while maintaining productivity is a fine line that needs constant iteration.
“Free Market Environmentalism” and The Promise of Ecosystem Service Markets
Ellis attributes his view of the shared responsibilities between private landowners and the government to a concept called “free-market environmentalism” and the think tank that produces research on it, the Property and Environment Research Center (PERC). Free market environmentalism is a philosophy that keys in on markets, property rights, and economic incentives as the key drivers of improving environmental quality and stewardship. Market incentives create dynamic cooperation between civil society and private landowners with the potential to generate ecosystem services. This also goes beyond mere economic drives, but rather requires a paradigm shift. In Ellis’s eyes, ranchers are often perceived as bad actors, yet “they are a solution to climate adaptation, heroes who can keep our country together.” Indeed, a quote I found interesting on the PERC website comes from conservationist Aldo Leopold: “Conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.”
Creating these incentive structures has been perhaps the most interesting development in agriculture in recent years. Ellis brought up the term “enviropreneurship” to speak of this emerging category of entrepreneurs focused on environmental stewardship. Ellis lived through an earlier experiment in ecosystem service markets: the Chicago Climate Exchange (CCX), which unceremoniously failed even though Ellis felt the excitement from ranchers and government officials alike. It is a poignant lesson for Ellis that these markets are not inevitable and they themselves require proper stewardship and transparency to root out bad actors.
To that end, Ellis is trying to build TALT as a trusted hub surrounding ecosystem services. Ellis feels that the current wave “is actually real”, yet requires sound decision-making to make sure bad actors don’t take over the market. The potential for land stewards seeking to implement conservation practices is immense. For reference, the California Rangeland Trust encompasses roughly 300,000 acres under conservation easement. Per a recent study, these acres produce around $1.4 Billion worth of ecosystem services that benefit the public writ large. A nationwide study should mimic such results. And once markets go beyond carbon, conservation-minded groups like Native American tribes would be adequately compensated for their water rights and stewardship, for instance.
Ellis is correct: now is a crucial time where both “finance and biology recognize the potential” of conservation capital. With nature-based carbon credits emerging in a business-to-business transaction environment, Ellis is looking to foster carbon, biodiversity, and other ecosystem service markets to reward proper land stewardship. Easement land is particularly valuable here because of the idea of permanence. As easements are into perpetuity, they safeguard against short-term thinking bad actors who may be looking to make a quick buck in carbon markets. An easement stacked with ecosystem service credits creates a virtuous cycle that both drives up the value of the conservation practices as well as the land itself.
What does this mean now?
I have a lot of respect for folks like Ellis who take a rancher-first approach and are willing to be creative in generating structures that fit each piece of land that has different characteristics. To this end, I wanted to lay out three illuminating conclusions I took away from talking with Chad:
Outcomes-based instruments should triumph over practice-based ones in ecosystem service markets. As Ellis put it, “we deal with ecological issues with principles, not practices.” A systems approach requires such flexibility to achieve desired outcomes, be it within the unique complex systems of an individual ranch or a state-wide approach. And even the implementation of practices like cover cropping across various farms might look vastly different based on both implementation and the ecological condition of the farm. Additionally, an outcomes-based instrument also provides assurances to the buyers about the impact of what they’re paying for while maximizing the payment amount to landowners on a per-unit basis.
“Public policy needs to be the stick that drives the market.” Prescriptive public policy solutions and requirements will inhibit innovation, be it in financing mechanisms, measurement, or even just building landowner-market trust. Building better soil carbon sequestration models and allowing project developers to sell to corporate buyers will find a market-based price that works for both parties. The government’s role should be in rooting out bad actors and helping create a market - not flooding it on both sides.
Acceleration will occur when we look beyond carbon. While a rising carbon price might incentivize enrollment of landowners in carbon markets, true conservation-minded stewardship has numerous externalities beyond carbon. Creating incentives that properly reward those outcomes, be it in water quality, biodiversity, species protection, or nutrient runoff, will foster the right mindset instead of carbon reductionism.
I encourage you all to donate to organizations like TALT and entrepreneurs to think about what alternative - and complementary - structures to carbon credits can emerge to compensate folks for their ecosystem services.
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