Next Article in Journal
Cost and Potential Savings of Electronic Consultation and Its Relationship with Reduction in Atmospheric Pollution
Previous Article in Journal
Scientific Competence in Developing Countries: Determinants and Relationship to the Environment
Article

Financial Analysis of Habitat Conservation Banking in California

Department of Forestry, Michigan State University, East Lansing, MI 48823, USA
*
Author to whom correspondence should be addressed.
Academic Editors: Iain J. Gordon and Sharif Ahmed Mukul
Sustainability 2021, 13(22), 12441; https://doi.org/10.3390/su132212441
Received: 23 August 2021 / Revised: 18 October 2021 / Accepted: 8 November 2021 / Published: 11 November 2021
(This article belongs to the Section Sustainability, Biodiversity and Conservation)
Habitat conservation banking is a policy instrument for conserving endangered species by providing financial incentives for the landowners in the United States. This policy instrument aims to protect habitat, but little or no thought has been given to its financial performance. A financial analysis of habitat conservation banks (HCB) informs policymakers and conservation biologists of the long-term success of this policy and the future of HCBs. This paper evaluates 26 habitat conservation banks (HCB) in California by calculating their Net Present Values (NPV). We do so by compiling the cost and revenue data for habitat conservation banks. The average annual cost of operating HCBs was $42.78/acre (median: $22.58/acre), and the average credit price or revenue from credit sale was $6014.72/acre (median: $553.65/acre). The average NPV for 26 HCBs was $4205.90/acre at a 4% rate of return, indicating an overall positive return from such an easement instrument. However, only 14 HCBs out of 26 produced a positive return. With the inclusion of land acquisition costs, three of eight HCBs performed financially well. On the brighter side, the number of HCBs has increased with time. But there is not enough evidence to ascertain financial certainty from their revenues. A right selection of space (land acquisition costs can make or break finances for HCB) and species could encourage landowners to establish HCBs. This could build confidence on those who may have been discouraged from lack of knowledge and fear of losing revenue due to regulatory compliance to conserve endangered species habitat in their land. The findings are helpful in identifying lands and prioritizing investments to generate conservation credits. View Full-Text
Keywords: biodiversity offsets; conservation easements; conservation credits; endangered species act; financial analysis; policy instrument; net present values biodiversity offsets; conservation easements; conservation credits; endangered species act; financial analysis; policy instrument; net present values
Show Figures

Figure 1

MDPI and ACS Style

Poudel, J.; Pokharel, R. Financial Analysis of Habitat Conservation Banking in California. Sustainability 2021, 13, 12441. https://doi.org/10.3390/su132212441

AMA Style

Poudel J, Pokharel R. Financial Analysis of Habitat Conservation Banking in California. Sustainability. 2021; 13(22):12441. https://doi.org/10.3390/su132212441

Chicago/Turabian Style

Poudel, Jagdish, and Raju Pokharel. 2021. "Financial Analysis of Habitat Conservation Banking in California" Sustainability 13, no. 22: 12441. https://doi.org/10.3390/su132212441

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop