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Permanently Reauthorize the Land and Water Conservation Fund

UPDATE: On February 4, 2016, President Obama proposed a permanent reauthorization of the Land and Water Conservation Fund in his 2017 budget request. If approved by Congress, the fund would receive $900 million annually to fund recreation and conservation of public lands. The LWCF was previously re-authorized for the next three years as part of Congress’ year end budget bill, which passed in December of 2015. Source: The Hill.

This technical piece provides background and a policy recommendation to reauthorize the expired Land and Water Conservation Fund, a mechanism to fund public land acquisition and recreation in the United States. The Act to authorize the fund expired in September 2015. 

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 Executive Summary

The Land and Water Conservation Fund (LWCF) Act of 1964 authorized the appropriation of up to $900 million annually for public land acquisition and support of state recreation programs. Funding was derived from offshore oil and gas royalties and had to be approved annually by Congress. In September 30, 2015, the Act expired. In the 50 years since its passage, the Fund has raised $16.8 billion and provided economic and ecological benefits to society. The returns on investment of the Fund has been at least 4 to 1. Several bills to reinstate the LWCF have been proposed recently. The PARC (Protecting America’s Recreation and Conservation) Act would reinstate the Fund but reduce spending on federal land acquisition and increase spending for state recreation and offshore oil exploration. Bills to permanently reauthorize the LWCF have also been proposed in the House (H.R. 1814) and Senate (S. 338). Based on the analysis of these policy alternatives, I recommend that Congress permanently authorize the LWCF by passing H.R. 1814/S. 338. This will allow society to realize the maximum benefits and avoid the risk of a future funding gap.

Source: http://wilderness.org/mapping-land-and-water-conservation-fund-lwcf

Source: http://wilderness.org/mapping-land-and-water-conservation-fund-lwcf

Background of the Land and Water Conservation Fund

To address the market failure of the undersupply of public lands (generally a public good), the Land and Water Conservation (LWCF) Act was passed in 1964[i]. This Act established a funding mechanism which allocated a portion of revenues from oil and gas drilling in the Outer Continental Shelf and directed that funding to public land acquisition and recreational activities. [ii] The law allowed the Fund to raise up to $900 million annually. The level of funding was determined and approved by Congress each year. Historically, Congress had approved only portion of the LWCF; the fund could have raised $36.2 billion to date, but only $16.8 billion was allocated to the Fund itself.[iii] The remainder was diverted to other appropriations in the general federal budget. The LWCF appropriated funding toward three purposes: land acquisition by the four federal land management agencies (the National Park Service, Fish and Wildlife Service, Bureau of Land Management, and Forest Service), matching grants for states to support recreational activities, and other federal programs.[iv] On September 30, 2015, the LWCF expired. Several bills to reinstate the LWCF with modifications or with a permanent funding mechanism have been proposed in Congress in 2015.

 Benefits and Costs of the Land and Water Conservation Fund, 1965 – 2015

The Land and Water Conservation Fund allocated over 41,000 individual funds[v] which have contributed to the protection of 4.5 million acres of federal[vi] and 2.6 million acres of state and local lands[vii]. These public lands are located in all 50 states, the District of Columbia and US territories in 98% of counties in the United States.[viii] In terms of political feasibility, the LWCF is supported by a coalition of state, local, and national conservation and recreation organizations[ix] and received bi-partisan support in Congress from 1965 to 2015.

The LWCF is a primary source of funding for the four federal land agencies which provide recreational opportunities to the American public. Recreation contributes to the economy directly and indirectly; park-goers spend money at local tourism outlets (hotels, restaurants) and purchase recreational equipment to support their activities. The Fish and Wildlife Service estimated that recreational activities related to wildlife hunting on public lands contributed $3.7 billion to the economy in 2011 alone.[x] The Federal Interagency Council on Recreation found that recreational activities on public lands (national parks, wildlife refuges, forests, and others) supported 880,000 jobs in 2012 alone[xi].

Funding for the LWCF is generated from the royalties (e.g. revenues) from offshore oil and gas drilling activities. Royalties that must be paid from offshore drilling activities in the U.S. range from 12.5 to 18.75% and are determined by a law separate from the LWCF.[xii] A portion of these royalties (up to $900 million annually) has gone to the LWCF while a majority of the remainder goes to the US Treasury. The other funds from oil royalties support the Historic Preservation Fund, the states where the oil operation was leased, and other allocations.[xiii] Royalties are charged whether or not the LWCF exists. Hence, a change in the law to reinstate or cancel the LWCF does not affect oil company’s profit margins nor the price of oil. Without the LWCF, the revenues that would normally cover the fund are used within the general federal budget.

Most funding from oil and gas drilling on public lands goes to the US Treasury. Source:  https://useiti.doi.gov/

Most funding from oil and gas drilling on public lands goes to the US Treasury. Source: https://useiti.doi.gov/

A 2010 report analyzed the return on investment of the LWCF and found that for every dollar spent through the fund, there was a $4 return in economic value.[xiv] This value was estimated based on a suite of ecosystem services provided by lands acquired through the LWCF including water quality protection, habitat provision, carbon sequestration, erosion control, aesthetics, and others. This does not include direct economic values for recreation, tourism, historical resources, and those other benefits which cannot be valued in dollar terms including existence and bequest value. Hence, the return on investment in the LWCF is likely greater than four to one.

Policy Alternative 1: Reinstate the LWCF with modifications with the PARC Act

The PARC (Protecting America’s Recreation and Conservation) Act was introduced in the House in October 2015. This Act aims to reauthorize the LWCF at the same level ($900 million annually) for the next seven years but reforms the allocation by reducing funding for federal land acquisition (not more than 3.5% as compared to the previous 60%), and increasing funding for state recreation projects (not less than 45% as compared to the previous 25%).[xv] The PARC act also allocates funding toward promoting offshore energy exploration, innovation and education (not less than 20%) as well as other programs.[xvi] The breakdown of these allocations suggests that the PARC Act would eventually indirectly increase offshore drilling, but would not increase the amount of royalties diverted to the LWCF itself. This effects the efficiency of the Fund in society; by promoting additional drilling and carbon emissions, the externality of carbon pollution will be less internalized with the PARC Act than with the original LWCF.

The PARC Act was introduced by Rep. Bob Bishop (R-Utah). Photo: http://www.standard.net/Government/2015/05/15/House-defies-Obama-veto-threat-passes-defense-policy-bill

The PARC Act was introduced by Rep. Bob Bishop (R-Utah). Photo: http://www.standard.net/Government/2015/05/15/House-defies-Obama-veto-threat-passes-defense-policy-bill

The political feasibility of the PARC Act is currently low. Although it has been promoted by the chair of the House Committee of Natural Resources, it is opposed in the house Democrats and many Republicans[xvii] as well as by the White House.[xviii] In addition, it is opposed by prominent advocacy groups. John Gardner from the National Parks Conservation Association stated that “the PARC Act does not remotely constitute a reauthorization of LWCF, as it seeks to systematically dismantle the program and, for purposes of federal land acquisition, render it effectively worthless.”[xix]

Policy Alternative 2: Reinstate the LWCF with permanent funding

Efforts to reinstate the LWCF with permanent funding have been introduced in Congress: H.R. 1814 in the House (which currently has 196 cosponsors) and S. 338 in the Senate (which currently has 18 co-sponsors). These bills would reinstate the LWCF and allow for permanent funding; this would avoid the need for Congress to annually reauthorize and approve the fund. The only allocation specification that the bill makes is that “not less than 1.5% …be used for projects that secure recreational public access to Federal public land.”[xx] The remainder of the appropriations would remain as in the original LWCF.

HR 1814  was introduced by Raul Grijalva (D - Arizona). Photo: govtrack.us

HR 1814 was introduced by Raul Grijalva (D – Arizona). Photo: govtrack.us

Benefits of these bills are expected to be in line with the historical benefits as provided by the LWCF – at least a 4 to 1 return on investment. The benefits provided by the LWCF from 1965 to 2015 is a testament to the likely success of a permanent reauthorization and dedicated funding of the program. If passed, permanent reauthorization would avoid future gaps in the flow of funds from LWCF as there has been since September 2015. In addition, the political feasibility is high with bipartisan support in Congress and the support of a large coalition of organizations.[xxi]  It is unclear in the language of the bill whether there would be guaranteed full funding ($900 million) annually. If it is not guaranteed, then an inconsistent funding stream of a future LWCF constitutes a limitation of its effectiveness.

Conclusion

To correct the market failure of the undersupply of public lands and to provide net benefits to society, the LWCF should be reinstated with permanent funding (H.R. 1814/S. 338). These bills avoid the limitations of the PARC Act which would contribute to the externality of carbon pollution. Benefits of permanent reauthorization of the LWCF outweigh the costs to society by at least 4 to 1. Passage of S. 338 and H.R. 1814 is possible given the bi-partisan support from both chambers of Congress and from the Executive Branch. Language in the bill should be clarified as to whether the fund will be guaranteed to be financed fully ($900 million annually). Permanent authorization would avoid a gap in the funding stream. A complete, consistent, and permanent funding of the LWCF would deliver maximized net social benefits to the American public.

References:

[i] Act of September 3, 1964; P.L. 88-578, 78 Stat. 897. 16 U.S.C. §§460l-4, et seq

[ii] Hardy Vincent, Carol. 2014. Land and Water Conservation Fund: Overview, Funding History, and Issues. Congressional Research Service. Retrieved from https://www.fas.org/sgp/crs/misc/RL33531.pdf (accessed 12/1/2015).

[iii] Ibid

[iv] Ibid

[v] Walls, Margaret. 2009. Federal Funding for Conservation and Recreation: The Land and Water Conservation Fund. Resources for the Future. Retrieved from http://www.rff.org/files/sharepoint/WorkImages/Download/RFF-BCK-ORRG_LWCF.pdf (accessed 11/27/2015).

[vi] Zinn, Jeffrey. 2005. Land and Water Conservation Fund: Current Status and Issues. Congressional Research Service Report for Congress. Retrieved from http://nationalaglawcenter.org/wp-content/uploads/assets/crs/RS21503.pdf (accessed 12/2/2015).

[vii] Walls, Margaret. 2009. Federal Funding for Conservation and Recreation: The Land and Water Conservation Fund. Resources for the Future. Retrieved from http://www.rff.org/files/sharepoint/WorkImages/Download/RFF-BCK-ORRG_LWCF.pdf (accessed 11/27/2015).

[viii] National Recreation and Park Association. 2008. Land and Water Conservation Fund (LWCF) State Assistance Program. Retrieved from www.nrpa.org (accessed 12/1/2015).

[ix] Land and Water Conservation Fund Coalition. Retrieved from http://lwcfcoalition.org/about-us.html (accessed 11/30/2015).

[x] Based on calculation from report: 4.9 million people hunting on public lands in 2011 multiplied by trip expenditures per hunter of $762. Source: U.S. Department of the Interior, U.S. Fish and Wildlife Service, and U.S. Department of Commerce, U.S. Census Bureau. 2011 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation

[xi] Federal Interagency Council on Recreation. 2014. Fact Sheet on Outdoor Recreation Jobs and Income.

[xii] Government Accountability Office. 2010. Federal Oil and Gas Leases: Opportunities Exist to Capture Vented and Flared Natural Gas, Which Would Increase Royalty Payments and Reduce Greenhouse Gases. Retrieved from http://www.gao.gov/new.items/d1134.pdf (accessed 12/2/2015).

[xiii] Department of the Interior. Natural Resource Revenues from U.S. Federal Lands. Retrieved from  https://useiti.doi.gov/ (accessed 12/1/2015).

[xiv] Trust for Public Land. 2010. The Return on Investment from the Land and Water Conservation Fund. Retrieved from https://www.tpl.org/return-investment-land-and-water-conservation-fund (accessed 11/29/2015).

[xv] House Committee on Natural Resources. 2015. The Protecting America’s Recreation and Conservation Act (PARC). Retrieved from http://naturalresources.house.gov/uploadedfiles/nr_parc.act_11.6.2015.pdf (accessed 12/1/2015).

[xvi] Ibid

[xvii] Henry, Devin. 2015. GOP infightiS.ng breaks out over conservation bill. The Hill. Retrieved from: http://thehill.com/policy/energy-environment/259728-gop-in-fighting-breaks-out-over-conservation-bill (accessed 11/29/2015).

[xviii] Cama, Timothy. 2015. Obama official objects to GOP conservation bill. Retrieved from http://thehill.com/policy/energy-environment/260588-obama-official-objects-to-gop-conservation-bill (accessed 11/22/2015).

[xix] Retrieved from https://www.npca.org/articles/892-position-on-the-parc-act.

[xx] S. 338 – A bill to permanent reauthorize the Land and Water Conservation Fund. Retrieved from https://www.congress.gov/bill/114th-congress/senate-bill/338 (accessed 12/1/15).

[xxi] Land and Water Conservation Fund Coalition. Current Legislation. Retrieved from  http://lwcfcoalition.org/legislation.html (accessed 12/1/15).

Managing Expectations for the Paris Climate Conference and Beyond

This article was originally posted here on New Security Beat, the blog of the Environmental Change and Security Program at the Woodrow Wilson Center.

COP

The focus of the global community on the outcomes of the Paris Conference of Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) in December is unprecedented. The world awaits, anticipating the details of an international and legally-binding agreement to address climate change. [Video Here]

The prospect of a successful outcome is certainly a source of optimism and excitement. “[T]he eyes of the world will be on Paris…all indications seem to point toward success,” said Christiana Figueres, the executive secretary of the UNFCC, in a video made specifically for the ongoing “Managing Our Planet” series. The road to Paris has been enabled by many other negotiations – from Kyoto to Copenhagen to Durban. These talks have set the precedent for a deal to come soon. However, despite this optimism and vision of an effective and comprehensive climate strategy, it is important to look beyond Paris.

To set the Paris deal in motion, the global community must ensure effective implementation, deliver adequate financing, and encourage transparency and accountability. Without these critical components, the negotiations will not stop temperatures from rising to dangerous levels. After the post-Paris celebrations calm down, the global community must keep up the momentum or risk another failed attempt at addressing climate change.

The Structure of the Negotiations 

The Paris negotiations will culminate in the Paris Alliance – a visionary and comprehensive plan to address global climate change. The Paris Alliance includes four pillars: a legally-binding international deal; a national plan from each country; financing of at least $100 billion annually; and formal recognition of non-state actions focused on alleviating climate change. This is an all-hands-on-deck, all-of-the-above approach; it will be implemented by all countries worldwide and utilize a variety of tools. Both mitigation and adaptation will be addressed, harnessing interventions ranging from higher fuel efficiency standards to renewable energy development to forest conservation.

Furthermore, the Paris negotiations are structured in a unique way. Historically, the UNFCCC has relied upon the premise of differentiation – developed and developing countries were expected to contribute to solutions in different ways. For instance, in the Kyoto Protocol, developed countries (polluters of the past) were responsible for meeting legally binding emissions targets, while developing countries were not. Although this is rooted in the polluter-pays principle, developed countries, including the United States, were not keen on it.

At the Wilson Center on October 14, Lisa Friedman, deputy editor of ClimateWire, emphasized the role of differentiation in the climate agreements, noting that “this fight has been going on for a long time…and the U.S. rejected [Kyoto] because of that.”

The deal in Paris, however, is quite different. Each nation must submit an Intended Nationally Determined Contributions (INDC) document detailing what commitments it will make. This voluntary, bottom-up approach ensures that each nation feels a sense of ownership. The national plans will hopefully eventually “add up” to carbon emissions reductions that prevent a rise in global temperatures of more than two degrees Celsius.

Expectations vs. Reality

As of today, at least 126 nations have submitted INDCs. The submission of so many plans months before the conference is a positive sign that negotiators will avoid last-minute uncertainty. Carbon accounting and transparency, along with innovative technological solutions, are integrated into many plans. However, as of now, the INDCs do not add up to match the two degrees Celsius target to which the global community aspires.

Commitments so far do not add up to match the 2° C target

Many hard commitments are not yet in place. Exact targets for mitigation and commitments for financing, for example, are lacking. The plans to compensate those most affected by climate change are not yet agreed upon. Furthermore, the strategies to follow up on and upgrade these commitments are missing.

The details of the mitigation targets, financing, compensation for loss and damage, and other components will ultimately be determined by politics. The final outcome is unpredictable at this point, said Yamide Dagnet, a senior associate with the World Resources Institute’s Collective Climate Action Objective. She emphasized that the negotiations are likely to involve “asks and gives” between nations negotiating until “the final hour.”

Looking Beyond

When the dust settles this fall, the Paris COP is likely to produce the first binding, comprehensive international agreement to address climate change. After the celebrations die down, however, it is critical that the global community push for effective implementation of the Paris Alliance.

Nations must strive to reach their goals in a timely manner, deploying their resources and reporting on their progress to ensure transparency and accountability. Further, governments will need to begin investigating ways to avoid unintended consequences of their strategies and consider tradeoffs between goals (e.g., between renewable energy development and habitat connectivity in a biodiverse region).

Here in the United States, the 2016 presidential election is likely to play a key role in successful implementation of the deal. If the United States is not on board, Paris threatens to be another Kyoto.

If all goes well, and every nation successfully implements their INDCs, then the success of Paris will still have only just begun. Implementation will not be simple nor will benefits be immediate. Momentum may fade. “It’s very important that we don’t backtrack,” said Dagnet. “We need to keep the momentum way after Paris.” In order for the deal to truly be successful, there must be enough institutional and political will to carry this deal forward for decades into the future.

Sources: World Resources Institute.

Photo Credit: Bonn session of the UNFCCC Subsidiary Body for Implementation and Subsidiary Body for Scientific and Technological Advice, October 2014, courtesy of the UNFCCC. 

Impact Evaluation in Conservation Science

This is the first blog in a weekly series exploring impact evaluation and building the evidence base in conservation science and policy.

Impact. It’s a term that we hear everyday in the news without batting an eye. Here are some headlines from just today:

http://www.bloombergview.com/articles/2015-09-11/human-impact-on-global-environment-may-be-peaking

http://www.bloombergview.com/articles/2015-09-11/human-impact-on-global-environment-may-be-peaking

http://www.usatoday.com/story/news/2015/09/11/house-votes-reject-iran-nuclear-deal-but-action-has-little-impact/72061716/

http://www.usatoday.com/story/news/2015/09/11/house-votes-reject-iran-nuclear-deal-but-action-has-little-impact/72061716/

http://dailycaller.com/2015/09/11/new-data-shows-legalization-had-no-impact-on-teen-marijuana-use/

http://dailycaller.com/2015/09/11/new-data-shows-legalization-had-no-impact-on-teen-marijuana-use/

But what does the word impact actually mean? How can we really measure the impact of one thing (let’s say, a low fat diet) on another (weight loss)? Aren’t there many other factors at play that could actually be causing the change? What if, while a subject begins a low fat diet, he also starts exercising more and counting calories? Those factors are likely to be important to the measured outcome (weight loss) as well and have to be “teased out” somehow. How can this be done? Scientifically, we use a technical process called impact evaluation. This process attempts to estimate the actual effect of a treatment or intervention (e.g. a drug) on an important outcome (e.g. weight). This approach is used regularly in the medical research community when testing the effects of drugs on patients. Researchers must carefully design the trial so that the populations taking the drug itself and those taking the placebo represent a random cross-section of people. This helps to ensure that the two groups do not differ significantly in other ways that could affect the outcome. For example, if the treated (drug-taking) group in the trial contains a disproportionate number of individuals that have hypothyroidism (which is associated with low metabolism), this will bias the results. The hypothyroidism-group may be inherently less (or perhaps more!) likely to respond to the effects of the drug. Although the drug could indeed have an effect, it would not be effectively measured by trying it on this non-random sub-sample of the population. Through random assignment of participants to the treatment and control groups, researchers ensure that the groups are not inherently different from each other. This way, the groups are fairly comparable to each other and researchers can compare apples to apples.

How a randomized control trial works http://library.downstate.edu/EBM2/2200.htm

How a randomized control trial works. From http://library.downstate.edu/EBM2/2200.htm

The randomized control trial is considered the gold-standard in scientific research. Because of the randomization, the evidence these studies produce provide solid estimates of the impact of treatments (e.g. drugs) on relevant outcomes (e.g. weight loss). However, in conservation and policy evaluation, it is nearly impossible to design a randomized experiment. For instance, would it be possible to test the effects of a Payments for Ecosystem Services plan using a randomized control trial with control and treatment (e.g. paid) groups? This would be a highly inequitable public policy, as the benefits of the payment would only benefit certain people. What about the evaluation of a protected area using randomization? Is it possible to randomly protect some areas and not others and then measure the outcomes? Of course, this approach would politically and practically impossible.

To get around these constraints, conservation scientists have borrowed from econometrics and have implemented approaches known as quasi-experimental methods for impact evaluation. Because we cannot directly experiment with conservation policies, we instead must employ a roundabout approach – hence the “quasi” term. Using sophisticated statistical techniques, conservation scientists attempt to simulate a randomized control trial. These approaches have been applied to evaluate protected areas and community-based conservation projects alike. The main idea is that these approaches attempt to estimate the counterfactual – what would the outcome have been in the absence of the policy?  We cannot directly observe this, so we can use statistical approaches to estimate it. What are some examples of these approaches? I’ll review three here: matching, instrumental variables, and structured equation modeling.

For example, with an approach called matching, treated groups are compared with select control groups that are as similar as possible to the treatment groups. In other words, they are matched up with each other. This matching process is designed to eliminate or reduce selection bias to the extent possible. Selection bias is essentially a converse of randomization: certain localities are more likely to be selected for a policy treatment (such as a protected area). By using matched controls with similar characteristics, the selection bias can be reduced. Imagine a simple matching situation: you want to estimate the impacts of a protected area on forest cover. To select matches, you’ll use covariates – variables that correlate with the treatment assignment of protection and the outcome variable of forest cover. One example of a covariate is distance to roads. (There are many other possible covariates, but we can just explore one in this simple example.) To select the appropriate matched control, simply choose a locality that is unprotected with the closest possible value for the distance to roads.

matching example

In reality, the analysis would include many covariates that would need to match as closely as possible between treated and control groups. Adding more covariates is not only necessary to reduce selection bias, but also may make it more difficult to identify close matches.

A second approach to try is called structured equation modeling (SEM). This method is somewhat similar to matching, as it employs covariates to reduce selection. However, SEM also allows the inclusion of extra components other than the treatment, called mediating factors, that may also contribute to the outcome. Using this method, it is possible to identify mechanisms – exactly how and through what pathways the treatment affected the outcome. In addition, the interactions between mediating variables can be taken into account – this is an advantage of SEM over matching, which leaves out those interactions.

SEM

Another approach to consider employs instrumental variables. In this case, you use an instrument – a variable that affects the probability of treatment but does not affect the outcomes except through the treatment. In other words, the instrument is not correlated with unobserved confounding variables. The advantage here is that it reduces selection bias and only focuses on locations where the treatment variable is not “contaminated” with unobserved confounders. However, it’s difficult to identify instruments in practice that actually work. One example of an instrumental variable that has been used in protected area evaluation is the distance to rivers. The idea here is that protected areas tend to be located near rivers; however, the distance to rivers is unlikely to correlate with an outcome variable such as forest loss or change.

instrumental variables

These are just three examples of evaluation approaches that can be used in conservation science. The appropriate methodological approach for your research will depend on important factors, especially the availability of data and scale of analysis.

For more information about impact evaluation in conservation science, check out these useful references:

Baylis, K., Honey-Rosés, J., Börner, J., Corbera, E., Ezzine-de-Blas, D., Ferraro, P. J., Lapeyre, R., Persson, U. M., Pfaff, A. and Wunder, S. (2015), Mainstreaming Impact Evaluation in Nature Conservation. Conservation Letters. doi: 10.1111/conl.12180

Ferraro, P. J. (2009), Counterfactual thinking and impact evaluation in environmental policy. New Directions for Evaluation, 2009: 75–84. doi: 10.1002/ev.297