Land Management for Healthy Watersheds: A New Financial Incentive in the Mid-Atlantic

The Chesapeake Bay, the largest estuary in the United States, is regulated by the U.S. EPA under a total maximum daily load (TMDL) to improve water quality. Since 2010, the states in the bay watershed have been developing and implementing actions, primarily via regulated communities. Recent outreach has focused on encouraging non-regulated communities to take voluntary actions. However, without regulations or funding, those communities are limited in their ability to contribute. The Healthy Watersheds project focuses on the recognizing the value of forest cover for achieving Chesapeake Bay water quality goals. A key to successful land conservation is to create, or tap into, a market for the private financing of high quality forest and agricultural land retention and land reforestation. By aggregating a landowner’s potential ecosystem service offerings (e.g., carbon credits, water quality credits, habitat enhancement, etc.), and matching those environmental resources to the investment market’s structural protocols (e.g., trade regulations, trade restrictions, liquidity, tax treatment, secondary markets, etc.), a financial conduit can be developed to link the aggregated demand for those green resources with money for the land owners and host locality. This approach essentially pays landowners to maintain or expand forest land which, in turn, improves water quality in the bay watershed and the bay itself allowing non-regulated communities to contribute to meeting the regional goals.