California legislators have enacted the state's first conservation banking law, based on a pioneering program launched here 18 years ago. The new law provides a regulatory framework for the first time, adopting several reforms proposed by a comprehensive study appearing in the April-June 2013 issue of UC’s California Agriculturejournal.

Conservation banks enable farmers, ranchers and other landowners to receive income for managing their lands to benefit wildlife. California established the nation's first conservation banking program in 1995, but it was by executive order only.

“For the first time, Senate Bill 1148 provides statutory procedures for the California Department of Fish and Wildlife to evaluate and approve proposed conservation banks.This new law could become a model for other states,” says David Bunn, lead author of the article and researcher for the Wildlife Health Center at UC Davis. "It also authorizes new fees that will make it possible to fund more dedicated staff to carry out the program. However, further reforms are needed, for instance to set minimum conservation standards, enabling wildlife agencies to prioritize potential sites within a region.”

Bunn’s article reports the first evaluation of the 18-year old California Conservation Banking Program. Although the bellwether program fostered 29 conservation banks, new approvals have dropped in recent years; most were approved before 2006 and none has been approved since 2009.

“This is partly because the lack of clear standards and procedures caused negotiations over potential new banks to drag on for five or more years,” says Bunn. The economic recession also contributed to the dwindling use of the program, he adds, because banks provide credits to developers who need to mitigate environmental impacts — and since 2009 there has been little new residential or commercial development.

The new law became effective in January. California is recognized as a world leader in implementing biodiversity offsets as a means to conserve species. Modeled on the federal wetlands mitigation bank program, California’s program fosters establishment of conservation banks to protect species and their habitats in perpetuity. The owner, or management firm owning the bank, is authorized by wildlife agencies to sell credits to developers to mitigate impacts of their proposed developments on wildlife.

In contrast to the regulatory approach that penalizes landowners for harming protected species, conservation banking creates a market incentive for landowners to conserve wildlife. These banks are publicly or privately owned lands managed to provide habitat for species of concern. The owner, or management firm owning the bank, is authorized by wildlife agencies to sell credits to developers to mitigate impacts of their proposed development projects on wildlife.

Developers have to mitigate with habitat similar to the species’ habitat they are negatively impacting, and they have to buy credits in the Bank Service Area designated for the particular species.  

Bunn and colleagues first identified the factors limiting the program’s potential, and then surveyed the state’s wildlife agency conservation bank staff and practitioners to identify needed reforms. Three key actions proposed were enactment of standards in critical areas such as prioritizing potential sites, addition of experienced program-dedicated staff, and establishment of a regional approach to planning and monitoring.

The research article, and the entire April-June 2013 issue, can be downloaded at http://californiaagriculture.ucanr.edu.

For more information on the new conservation banking law, visit http://www.dfg.ca.gov/habcon/conplan/mitbank.