Does conservation pay?

While educating developers concerning environmental impacts is important, greater profits will induce developers more than appeals to their environmental ethic or their conscience.

As conservationists and Michigan State University Extension educators, we often approach the question as posed in the title as “We hope so,” even while we stress an environmental ethic as a way to avoid regulation. The common belief is that if an environmental ethic is insufficient, government regulation is the only remedy for protecting our ecosystem. However, there is substantial evidence that harnessing the power of the market is much more effective than regulation.

Research published in the Journal of Soil and Water Conservation suggests that building lots with environmental amenities sell for more than bare lots. In fact, the difference can be substantially greater than the cost of providing the amenities. This suggests that developers could increase their profits if they incorporated environmental aspects into their development.

A development project that I was asked to review had a unique concept for maximizing their returns while preserving aspects of the environment. The developer set aside over 20 percent of the acreage and spent hundreds of thousands of dollars to restore ecological integrity to those acres by planting native grasses and trees, curtailing streambank erosion and restoring wetlands. Then the developer deeded those acres, with conservation easements, to a local land trust for the long-term management. The company platted their development so that there are no home sites on the wooded bluff overlooking the riparian corridor and they planned for some mixed use commercial in order to reduce dependence upon automobiles.

Why would a company invest so heavily in trying to be more ecologically sensitive? Is this a case of someone forsaking profit for the environmental ethic? Probably not! This company’s environmental ethic or lack thereof is not the important variable. Because their potential buyers care about their environment and were willing to pay more for housing lots that have these amenities, the developer was just maximizing profits. Just as lakefront lots cost more than those further away, lots in an environmentally friendly development will cost more. So homeowners get to enjoy a more ecologically-balanced neighborhood, the developer makes more money and the environment wins.

What are the lessons that can be gleaned from this example?

One, is that if it is important to us, we will pay. If ecologically-sensitive development is important, we are willing to pay more for the land upon which to build; the same as we are willing to pay more for a lake view or a larger lot.

Secondly, if we want to further our conservation goals, we need to make sure that the market is receiving the correct signals about our desires. While educating developers concerning environmental impacts is all right, greater profits will induce developers more than appeals to their environmental ethic or their conscience.

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