Grounding Adaptive Leadership into Systems Thinking

By: Beatrice Benne (Kinship Faculty member) As I am about to teach the Adaptive Leadership course wi

Resolving the Three Paradoxes of Water Conservation

Water efficiency credits can become a conservation currency with a simple, self-interested, formula

Kinship Announces 2014 Cohort

      Kinship Conservation Fellows Announces 18 Conservation Leaders Chosen for 2014

 

Grounding Adaptive Leadership into Systems Thinking

June 24, 2014 in Leadership and Business Skills

By: Beatrice Benne (Kinship Faculty member)

As I am about to teach the Adaptive Leadership course with the Kinship Conservation Fellows 2014 cohort, I want to reflect on the importance of grounding adaptive leadership into systems thinking.  Here are three main reasons.

Perhaps the most obvious reason is that today’s conservation projects deal with complex adaptive social and ecological challenges that must be addressed holistically if one is to re-establish the harmony that has been broken between communities and their natural environments.  Adaptive leaders must be able to embrace and make sense of the whole complexity of their projects.  A systems thinking approach can help them understand the dynamic relationships between elements of their projects and how patterns form.  In contrast, reductionist methods that focus on analyzing parts of a system independently of one another can only address symptoms but not root causes.

Consider the case of the rehabilitation of a degraded watershed in China’s Loess Plateau: for years, various ministries and departments of the Chinese government worked independently of one another to address two related issues of the highly degraded Loess plateau: soil erosion, and poverty of millions of people struggling to feed their families.  The uncoordinated interventions, however, often worked at cross-purposes.  On the one hand, the livestock distributed to farmers ate the seedling trees provided by reforestation programs, further aggravating erosion and forcing farmers to plant crops on higher slopes.  On the other hand, the tree varieties that were planted were chosen for their capacity to stabilize the soil but not bear fruit, and thus did not generate a source of farmers’ income.  It was not until the problem was reframed through an understanding of the dynamic of the whole system, and the connection was established between the need to first improve farmer livelihoods and then address the ecological degradation, that the whole socio-ecological problem could effectively be addressed and Loess plateau regenerated in only six years.

A second reason for adaptive leaders to become systems thinkers relates to the importance of seeing patterns.  The pattern of behavior of a complex system is the emergent outcome of the dynamic interactions between the elements in that system.  While dynamic interactions that operate over time are often hard to understand, patterns, in contrast, are easily observable.   Uncovering a pattern can provide many clues of what is going on in a complex system and might launch a leader on a fruitful inquiry path.  For the team of experts who were tasked to find a solution to rehabilitate the Loess Plateau, the moment of insight came when asking a village chief why in his particular village, agriculture was flourishing (an uncommon pattern in the area).  The chief replied: “it is green down there because of the walnut trees up here.”  The village had chosen to plant walnut trees and had banned grazing.  The team realized that if things could grow in that area, nature could perhaps re-grow on the Loess plateau, assuming people could give it a chance by changing their behavior and value system—which brings us to our third reason.

A critical skill for adaptive leaders is the ability to uncover and check stakeholders’ assumptions, values, and belief systems.  In her well-known article “Leverage Points: Places to Intervene in a System,” systems thinker Donella Meadows explains that the most effective leverage point in a system is our mindsets or paradigms, out of which the structures of our systems are designed.  I often use the Sufi tale of “The Blind Men and the Elephant” to show that, faced with a complex socio-ecological challenge, each stakeholder has a narrow and often imperfect understanding of the issues at hand due to deeply held beliefs.  To uncover what the ‘elephant’ really looks like (i.e., the adaptive challenge), an adaptive leader needs to help stakeholders work with one another, using a process of simultaneous inquiry and deep listening to challenge each other’s assumptions and mental models, until the beast shows its ‘true’ face.  When this happens, it’s like the blinders have been removed and people are able to see a situation with “new” eyes—a transformative change.

Benne, BeatriceBeatrice Benne, Ph.D., is the Founder and Principal of Soma Integral Consulting, which facilitates the resolution of adaptive challenges within the context of socio-ecological environments.  Beatrice brings to her clients a broad range of skills and expertise including a whole systems approach to organizational management, strategy, and change; transformative leadership capacity development; and creative approaches to addressing complex situations.  Beatrice also delivers regenerative design and development services to urban communities that want to become more sustainable.

Over the past 15+ years working in diverse organizational settings — from large corporations to startups — Beatrice has gained experience in facilitating change, leading process improvement projects, and creatively combining ideas from different fields for the design of strategic business solutions.  With her unique ability to combine rational analysis and perceptive intuition, Beatrice is able to successfully navigate the intricacy of highly complex organizational environments, while maintaining a sharp focus on the expected outcomes and performance of the projects and initiatives she leads.

Beatrice holds a M.Sc. and Ph.D. from the Department of Architecture at the University of Berkeley, California, USA, and a Diploma of Architect from the University of Geneva, Switzerland. She is a Kinship Conservation Fellows faculty member.

Resolving the Three Paradoxes of Water Conservation

May 15, 2014 in Ecosystems & Biodiversity

Water efficiency credits can become a conservation currency with a simple, self-interested, formula for success: Earn + Own + Trade = Restore.

By James G. Workman (Kinship Faculty and 2005 Kinship Fellow)

This is the final article in a four-part series for The Kinship Lens about the three paradoxes that obstruct water conservation: value (part 1), efficiency ([part 2), and monopoly (part 3)

In April 2001, U.S. Vice President Dick Cheney famously trashed the idea of doing more with less: “Conservation may be a sign of personal virtue,” he said, “but it is not a sufficient basis for a sound, comprehensive energy policy.”

It pains my conscience to admit it, but more than a decade later it seems he’s right. To save water and energy and build deep-seated resilience from the grassroots level up, cities need to start tapping into a far deeper human instinct: avarice.

Yes, yes. I know that sounds rather crass, even for me, but hear me out.

We can agree that climate mitigation demands clean energy; likewise climate adaptation demands efficient water use. Building on that, we all know that water and energy conservation remains by far the fairest, fastest, cheapest and cleanest route to global security. It restores a resilient society, a stable climate, an autonomous foreign policy and a robust economy while avoiding political land mines of regulations, carbon taxes or cap-and-trade treaties.

The only drawback to conservation is that it requires sacrifice from the richest and most powerful citizens, businesses, and political interest groups. Arguing for more virtue from these elites simply won’t do the trick, as Aldo Leopold warned in 1948 and as we have seen for the past few decades (or for that matter, millennia).

The good news is that today, technology promises to deliver the same result based on a radical form of conservation that leverages their (and, yes, our own) inner greed.

Why? Because in any democracy, urban conservation must reach beyond Prius-hybdrid-carpooling-farmers’-market-hemp-bag-toting-vegan-cardigan-sweater-wearing pillars of society.

It needs at least 51 percent. That includes flawed people (including yours truly) who blast air-conditioning and take long hot showers.

This not-so-moral majority consumes more water and energy than it needs to. It feels vaguely guilty. Still, it could take comfort in a dirty little secret long known by insiders and now more widely recognized by the public: virtue-driven conservation is economically unsustainable.

Wait. As humans save resources, we lower bills, reduce effect and avoid sanctions, right? Not necessarily –thanks to the absolute natural monopoly that is our local water and energy utility.

But as we have seen in the case of urban water, it turns out utilities’ conservation directors showcase conservation programs touting conservation rebates, but quietly pray like hell that no one will conserve.

Instead, like any enterprise, a utility’s operating income depends on mass consumption. The more combined water and energy people waste, the more money utilities have to work with.

So people cut consumption by half, monopoly utilities must unilaterally double rates per gallon or kilowatt-hour to balance operating costs. After a dip, monthly utility bills rise back, higher than ever.

Happily, new information technologies may lead us out of this destructive and dangerous spiral of perverse incentives. The Internet can unlock authentic, sustainable, comprehensive conservation policies that eluded Cheney. How? By borrowing from the Xaro system of the Bushmen; from successful “catch shares” programs in recovering fisheries; and from a national idea used back in the 1990s to cut acid rain causing sulfur dioxide emissions that were killing lakes and forests: tradable credits.

The Internet can unlock authentic, sustainable, comprehensive conservation policies that eluded Cheney.

Here’s how some say it could work to encourage real, meaningful conservation:

  1. First, encourage monopoly utilities to convert messy physical water or energy into cleanly defined virtual credits.
  1. Next allocate equal incentives for online conservation of metered assets – direct or proportional rewards earned for keeping below their historic thresholds —to every residential, commercial and industrial account.
  1. Then let us trade whatever we don’t consume to those who want more.

These online platforms could unlock virtual urban water markets within natural monopolies, working to reward voluntary frugality, efficiency and innovation.

The trick is not trying to improve on human nature, or make everyone extra virtuous, but to leverage our innate sin. If one person consumed less, she could sell unused shares to another, to businesses or to the utility for a cash profit.

Under this defined rule of transparent governance, greed makes green. Pride in higher wealth and status would compel me to use even less just to keep up –a benevolent consequence of envy.

This approach unlocks a truly durable and sustainable path, and does so by going beyond virtue.

Indeed, to unlock a robust water conservation policy, water districts need only tap our inner vice.

Read the first three parts of this series for The Kinship Lens: Part 1, Part 2, and Part 3.

JamieWorkman_editedbyJenWorkman is a leader in the design and execution of natural resource conservation markets for water, fisheries, forest and energy. He is author of Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, which won the prestigious Rachel Carson Award for best book of the year from the Society of Environmental Journalists, and co-author with Amanda Leland of the forthcoming The Quiet Sea Change: How America’s Hunter Gatherers Are Transforming the Rules of the Wild. He has been a visiting professor at Whitman Colleague and Wesleyan University’s College of the Environment, and co-founded AquaJust, an online utility-based platform that unlocks equitable water markets for cities using the system that has sustained the Kalahari’s indigenous people for 30,000 years. He was a 2005 Kinship Conservation Fellow and current Kinship Faculty member.

Kinship Announces 2014 Cohort

April 29, 2014 in About Kinship

2014cohort

 

 

 

Kinship Conservation Fellows Announces 18 Conservation Leaders Chosen for 2014 Cohort

Conservation leaders based in 10 countries will gather in Bellingham, Washington, USA for a month-long fellowship exploring market-based approaches to environmental issues.

Kinship Conservation Fellows today announced the selection of their twelfth cohort of Fellows. The 18 Fellows will travel from 10 countries including Belgium, Canada, China, Ecuador, Kenya, Madagascar, Mexico, South Africa, the United Kingdom, and the United States to attend the month-long program in Bellingham, Washington.

Kinship Conservation Fellows are mid-career practitioners with an interest in market-based conservation principles and a demonstrated commitment to leadership. From June 29 to July 30, the 2014 cohort of Fellows will take part in an exceptional learning community that prepares them to successfully implement innovative strategies in the field.

“I am honored to announce our impressive group of 2014 Kinship Fellows,” said Nigel Asquith, Director of Kinship Conservation Fellows. “This cohort is tackling conservation issues around the world, from watershed conservation in China to the establishment of collaborative forest management systems in the Ecuadorian Amazon. Kinship faculty and I look forward to helping them advance their goals in using market-based tools for conservation and hone their leadership skills during the upcoming program.”

Highlights of Kinship Conservation Fellows include:

  • Month-long in-residence program
  • Core instruction in the application of market-based tools
  • Training in leadership, economic, finance and business management practices
  • Hands-on application of learning via individual and group projects
  • Faculty with international expertise
  • Inclusion in a global Fellows community
  • $6,000 stipend with lodging provided

A list of this year’s 18 Fellows is below. Click here for photos and to view a brief description of each Fellows’ project.

Paola Bauche, Independent Consultant – Guadalajara, Mexico
Jane Boles, Offsetters Climate Solutions Inc – Vancouver, Canada
Jennifer Chapman, Blue Ventures – London, England
Wain Collen, PlanJunto – Quito, Ecuador
Tanguy De Bock, Riviéres de Wallonie – Hyon, Belgium
Mwangi Githiru, Wildlife Works – Voi, Kenya
Andrew Goldberg, Dogwood Alliance – Asheville, NC, USA
Andrew Harvey, MantaWatch – London, England
Matthew King, Living GREEN Foundation – Boulder, CO, USA
Hao Li, Beijing Forestry Society – Beijing, China
Greg Martindale, Ezemvelo Kwazulu-Natal Wildlife – Nottingham Road, South Africa
Kelli McCune, Sustainable Conservation – San Francisco, CA, USA
Faith Milkah Muniale, ERMIS Africa – Nakuru, Kenya
Tsering Norbu, The Pendeba Society of the Tibet Autonomous Region – Lhasa, China
Voahirana Claudia Randriamamonjy, Madagasikara Voakajy – Antananarivo, Madagascar
Cornelia Rindt, Offsetters - Vancouver, BC, Canada
Cecilia Simon, Climate Action Reserve – Valle de Bravo, Mexico
Jacquelyn Wallace, Okanogan Land Trust – Pateros, WA, USA

ABOUT KINSHIP

Established in 2001, Kinship’s mission is to develop a community of leaders dedicated to collaborative approaches to environmental issues with an emphasis on market-based principles. For more information about Kinship Conservation Fellows, please contact Catherine Rabenstine at (312) 803-6200, catherine.rabenstine@kinshipfoundation.org, or visit www.KinshipFellows.org. For more about market-based approaches to conservation, read our blog: www.thekinshiplens.com.

Kinship Conservation Fellows: Connection. Collaboration. Impact. from Kinship Conservation Fellows on Vimeo.

The Third Paradox of Water: Monopoly

April 28, 2014 in Ecosystems & Biodiversity, Mechanisms for Market-based Conservation

Water conservation erodes a private or public utility’s revenues. To remain solvent, or grow, providers are forced to encourage and reward waste.

By James G. Workman (Faculty Member and 2005 Kinship Fellow)

This is the third in a four-part series for The Kinship Lens about the three paradoxes that obstruct water conservation: value (part 1), efficiency ([part 2), and monopoly (part 3). The fourth and concluding article in the series will be available in early May.

Let me introduce you to my friend – an extraordinarily conflicted professional – who manages conservation programs at your local urban water district.

She’s hardly alone in her anxiety, or unique in facing the predicament that caused it. Using her name would jeopardize her career. But based on 53,000 American water utilities, I estimate at least 100,000 people like her suffer in the U.S. alone. Her symptoms remain mild – a nervous twitch, sweaty palms, and mild headaches – but worsen as water scarcity puts competing tensions on her utility’s aging system.

The roots of her trauma are simple. Nearly a decade ago she was hired, given a small staff, budget and discretionary funds to promote ambitious conservation programs and rebates throughout the service area of her water utility. It was the ideal job to match her ideals, a rare opportunity that pays you to do what you love. But there was, alas, a deep and hidden problem, which gave rise to mental health complications.

Perverse priorities

It soon became clear that, the more she succeeded at a noble cause while saving nature, the more she would wreak havoc on her institution’s foundation, destroy the revenue base of operations, and force herself and her team out on the streets and into the welfare lines.

Conversely, if she utterly failed at her job, and proved hopelessly incompetent at the task defined, everyone wins and loves her. She would boost sales, generate high returns on almost no investment, and likely land herself a series of promotions, salary hikes, bigger team, and longer vacations until she ran the show.

The only problem with that second route was that she would have to sacrifice her just original soul, sense of pride, and drive endangered species to extinction.

What’s forcing this professional anxiety? It’s not a matter of ‘public’ versus ‘private’ water utilities. That’s a red herring. Whether investors or voters own a water district, it remains a natural monopoly. That monopoly needs more money each year just to operate – to pay its staff, invest in repairs, maintain the system, cover health care and pensions etc. Increased funds depend on increased revenues, higher sales, and thus escalating water use by all end users – residential, commercial, industrial or municipal.

In theory, a monopoly should be able to increase revenues by selling ever-less water at ever-higher rates. In reality, that’s political suicide. Private and public utilities are regulated by officials elected to act on behalf of voters; voters rarely demand the right to pay more for less of something they depend on in every aspect of their lives, especially something many believe they should get for free.

Walking the tightrope

Hence the fine monopolistic line my strained friend must walk, and the tightrope beneath her, is beginning to fray. The current recession makes families and firms consume less water. That’s wonderful for nature, but horrible for her utility’s bottom line. She is, professionally, both pleased and tormented. Her job is to lock in more efficiencies but her boss visits daily with thinly veiled threats if she does. Unless she backs off on conservation, her position, team, and budget will be at risk of being eliminated first as part of austerity. If she saves more water, she slits her own throat. Then her skills become worthless in the marketplace; who hires someone good at eroding the bottom line?

This is the Third Paradox of Water: conserving water destroys revenues; a thriving monopoly must reward waste.

Frugal utilities have less room to negotiate. Those who encourage water saving today must punish it tomorrow with higher rates. These perversions remain true at the household level, the building level, the neighborhood, the municipal district and the river. Perversely, the existence of a water monopoly means that all people involved in it – from the person flushing the toilet to the State Water Board setting targets for water allocations – are left with no choice, no competition, and no incentives to conserve.

Indeed, the Third Paradox ensures that the most frugal, responsive, and equitable users and managers in the vertically integrated water monopoly can only succeed through subterfuge or martyrdom. As this paradox undercuts performance and customer relations it is known throughout the water industry as ‘the death spiral.’ After all, to paraphrase the U.S. soldier hoping to justify his extreme decision against a peaceful village in the Vietnam War, the paradox means we must destroy the monopoly’s water in order to save the utility.

The converse is that through the principles of H2Ownership, we can find a way to unlock the monopoly in order to save both water and the utility.

To that end, stay tuned for the fourth and concluding blog in this series, Resolving the Three Paradoxes of Water. Read part 1 here and part 2 here.

JamieWorkman_editedbyJenWorkman is a leader in the design and execution of natural resource conservation markets for water, fisheries, forest and energy. He is author of Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, which won the prestigious Rachel Carson Award for best book of the year from the Society of Environmental Journalists, and co-author with Amanda Leland of the forthcoming The Quiet Sea Change: How America’s Hunter Gatherers Are Transforming the Rules of the Wild. He has been a visiting professor at Whitman Colleague and Wesleyan University’s College of the Environment, and co-founded AquaJust, an online utility-based platform that unlocks equitable water markets for cities using the system that has sustained the Kalahari’s indigenous people for 30,000 years.

WEBINAR: Want Influence? Eliminate Your Blind Spots.

April 18, 2014 in Kinship Webinar Series, Leadership and Business Skills

When organizations are working to change policies, change a behavior, or mobilize people to action, they all need one thing to succeed: influence. Once they know who can make their desired change a reality they need to determine how to actually influence that individual or group to do what they need them to do. Without an influence strategy, organizations risk being overtaken by blind spots that can derail their efforts and ultimately lead to failure. Fortunately, these blind spots can be eliminated – if groups spot them early enough.

In this webinar, Spitfire Vice President Pete Rafle identified the top blind spots that prevent groups from successfully wielding influence and offered a few tried and true strategies for overcoming these challenges to create real progress. In order to realistically assess an organization’s blind spots, Pete Rafle suggested starting with the below.

The Four Elements Needed to Eliminate Blind Spots and Craft Successful Influence Strategies:

1. A clear sense of the decisions that need to be made.

2. An understanding of who makes those decisions.

3. An informed hypothesis of how the decision will get made.

4. An understanding of how the organization can influence the decision-making process and a gameplan for making that happen.

For more information about establishing a theory of influence, review the collection of tips (via Tweets) below and read Spitfire’s report, Want Influence? Eliminate Your Blind Spots©.

Spitfire Strategies is a national consulting firm offering nonprofits and foundations top-notch strategic communications and campaign planning, training, counsel and tools to make a real impact.

Pete Rafle_SpitfireFor more than 20 years, Pete Rafle has specialized in smart, strategic advocacy communications, guided by the organization’s mission and driven by its legislative, political and policy objectives. His resume includes campaigns on issues as diverse as climate and energy legislation, agricultural policy, wilderness protection, health care access and school discipline.

Pete leads Spitfire’s ongoing work with the Heinz Endowments, helping advocates in western Pennsylvania mount a collaborative effort to secure “the air we need, for the healthy economy we want.” He has helped a diverse coalition of public health advocates, business leaders, academic research institutions, and local and regional environmental organizations develop and implement a long-term communications plan that spotlights the human health costs of air pollution and the economic benefits of cleaning up the air.

Pete also directs the Spitfire team working with the Colorado Trust to build public support for expanded access to health care. Through tailored coaching and training, messaging guidance and other strategic counsel, Spitfire is building the communications skills and capacity of more than a dozen of the Trust’s grantee organizations.

Maximum-impact campaign planning and strategy is Pete’s specialty. He captains Spitfires’ “Planning to Win” campaign strategy workshops, which provide social-change leaders with a multi-day bootcamp on the fundamentals of effective preparation for multi-faceted sustained advocacy campaigns.

Pete came to Spitfire from the United States Senate, where he was communications director for the Environment and Public Works Committee, providing strategic counsel to Senator Barbara Boxer during her first four years as chairman of the committee. In addition to acting as primary media strategist for the committee’s legislative docket – including toxics and children’s environmental health rules, comprehensive climate change legislation, clean energy job creation, clean air and water bills, and transportation policy – he worked extensively with the senator’s in-state staff on California environmental and infrastructure issues. He also consulted on a volunteer basis in Washington and in California as part of the senator’s successful 2010 re-election campaign.

Before heading to Capitol Hill, Pete spent five years as director of advocacy communications at The Wilderness Society, where he led a cooperative integrated communications campaign that was instrumental in defending the Arctic National Wildlife Refuge from oil and gas development, and helped shape TWS’ efforts to incorporate strategic communications in all its program areas and its network of regional offices.

At DDB Issues & Advocacy, he worked to develop and implement communications strategies for issues ranging from energy efficiency to sustainable fisheries and fair trade coffee.

From 1992 to 1999, he was communications director for Trout Unlimited, where he helped the grassroots fisheries conservation organization push back ill-conceived congressional attacks on the Clean Water Act and created a television series showcasing the group’s work that aired for several seasons on ESPN. He was also responsible for establishing the organization’s first-ever online presence and served as editor and publisher of Trout Magazine, TU’s quarterly member publication. His resume also includes a stint as senior writer for Thirteen/WNET in New York, one of public broadcasting’s flagship television stations.

A graduate of Yale University, Pete also holds a black belt in the Korean martial art of Tae Kwon Do. He and his wife Margo have two children.

WEBINAR: Incentivizing Market Transformation

March 28, 2014 in Kinship Webinar Series, Mechanisms for Market-based Conservation

Join 2005 Kinship Fellow Katie McCann from Earth Innovation Institute and 2013 Kinship Fellow Jos Hill from Olazul as they describe different approaches aimed at moving both small and large scale markets towards sustainability. Katie and Jos explain some of the tools that can be used to transform markets, such as: certification, traceability, and use of technology.

They also discuss the challenges and opportunities of implementing supply chain interventions in their own projects. Jos describes Olazul’s work helping small scale collectors of marine ornamental fish design and adopt sustainable practices and deliver a “boutique” product to market. Katie discusses Earth Innovation’s work with commodity markets in the tropics (soy, beef, sugar, palm oil) and their efforts to accelerate the transition towards sustainability.

Presenter bios:

Hill, JosJos Hill is a marine ecologist and entrepreneur with over ten years of international practice in conservation. She has worked on sustainable seafood issues, designed conservation programs, advised on incentive based resource management initiatives, supported business and operational planning for sustainably-minded organizations and has led capacity-building workshops on coral reef monitoring and protected area management in the Indo Pacific and Caribbean. Jos is also a two-time Packard Environment Fellow and a Kinship Conservation Fellow. Before joining Olazul, Jos founded and led Reef Check Australia, an award-winning non-profit that engages the general public in coral reef monitoring and education. Jos holds a Bachelor of Science degree with Honours in Biology from the University of Leeds in the U.K., a Masters of Applied Science in Natural Resource Management from James Cook University, Australia and an MBA in Sustainable Business from Presidio Graduate School, USA.

McCann, KatieKatie McCann, Program Director of the Earth Innovation Institute, has more than 13 years of experience developing strategic environmental and sustainability initiatives.  With professional experience in the foundation, nonprofit, international development, and sustainable business sectors, Katie has established strong project management skills and a proven track record of forging successful relationship across and among diverse stakeholder groups.  She holds a Bachelor of Arts degree from Hobart and William Smith Colleges and an Master of Business Administration specialized in sustainable business and ecosystem services from Presidio Graduate School. Katie was a 2005 Kinship Conservation Fellow.

Presentation slides:

Katie McCann, Earth Innovation Institute

Jos Hill, Olazul

Webinar Recording and Storify feed:

WEBINAR: Incentivizing Market Transformation Stories of Consumers and Commodities in Transition from Kinship Conservation Fellows on Vimeo.

Assessing the Economic Value of Public Lands

March 27, 2014 in Funding, Fundraising, and Finance, Mechanisms for Market-based Conservation

By Delilah Jaworski (2013 Fellow)

The debate on how to value America’s public lands is highlighted in a recent article in High Country News that addresses Sen. Tom Coburn’s report on national parks. The centerpiece of this debate is the contribution of public lands to job creation. This is a variation on a debate that I have seen and been involved in numerous times. Politicians and the public expect economists to tally the number of jobs that a project or policy will “create.” The push for such estimates accelerated in the years since the recession due to persistent unemployment and the need to justify agency expenditures in a tight budget climate.

Here’s some of what we’ve learned: the recreation industry in the US accounts for approximately six million jobs, which is nearly 10-times the number of jobs in the mining sector. But average wages in the mining sector are among the highest, while those in recreation are among the lowest. So how do we use this information to assess the economic value of different public land uses? Typically, we don’t.

The value of public lands is in their contribution to social well-being.

Jobs are a politically salient measure, but employment estimates don’t reveal the economic value of national parks, national forests, and other public lands. The value of public lands is in their contribution to social well-being. Market activity and the associated jobs are only one part of the total economic value of our public lands. An emphasis on jobs will tell us about commodity production and visitor spending, but much of what we value is excluded from these calculations. Additionally, failure to account for externalities (e.g., air pollution from oil and gas operations) will overstate the social value of market activities on public lands.

Much of what we value is not traded in the marketplace: the provision of clean water to downstream communities, carbon sequestration, protection of habitat for threatened and endangered species, and the value to visitors beyond what they spend while traveling to the site. All of these ecosystem services contribute to social well-being, yet they do not translate into employment. In contrast, ecosystem destruction could create jobs, for example, as water treatment plants are needed to compensate for the loss of natural purification capacity. Consideration of non-market goods and services is essential to ensuring that conservation of our public lands is seen as an economic benefit, not just a cost.

Federal land managers increasingly recognize the importance of accounting for non-market sources of value in decision-making. The Forest Service’s 2012 Planning Rule incorporates ecosystem services. The Bureau of Land Management recently released guidance on the consideration of non-market values in decision-making. The Park Service regularly incorporates non-market values in its economic analyses. Nevertheless, it remains challenging to quantify, let alone monetize, the flow of ecosystem services and other non-market values from public lands. This challenge makes it appealing to focus on something observable and easily calculable, such as jobs. The expansion of environmental markets, particularly for water and carbon, improves our ability to describe the economic value of goods and services that typically lack prices. Nevertheless, such markets remain the exception in the United States.

Debates on how to prioritize limited budgets will be more fruitful if we can focus our attention on improving social well-being: understanding how and why federal lands are valuable to the public. This approach can incorporate the desire for stable employment in rural communities as well as the need for climate regulation and water purification. Moving away from a job-centric view may improve public land management, as conservation and economic prosperity need not be opposing goals.

Jaworski, DelilahDelilah is a social scientist with the TEAMS Enterprise Unit of the U.S. Forest Service. She works with natural resource and land management agencies across the United States to incorporate social and economic considerations into National Environmental Policy Act and long-term planning documents. She began her career as a Presidential Management Fellow with the Bureau of Land Management (BLM) in Denver, Colorado. During her tenure in government, she has completed rotational assignments to the U.S. Institute for Environmental Conflict Resolution and the Gila District Office of the BLM in southern Arizona. Much of her work focuses on the inclusion of ecosystem service values in project and policy evaluation. Delilah has an M.Sc. in environment and development from the London School of Economics and a B.A. in Middle Eastern studies from the George Washington University. She was a 2013 Kinship Conservation Fellows. 

Environmental Conservation off Cuban Shores

March 24, 2014 in Ecosystems & Biodiversity

Ebb and Flow: Environmental Conservation off Cuban Shores

By Fernando Bretos (2011 Kinship Fellow)

A typical Cuban fishing boat shot from the upper deck of the Felipe Poey, the University of Havana’s research vessel. Red Flag Magazine

A typical Cuban fishing boat shot from the upper deck of the Felipe Poey, the University of Havana’s research vessel. Red Flag Magazine

I stand on the Havana malecón — this bustling city’s majestic seawall only 90 miles from Key West. Ironically, it was built by the Army Corps of Engineers during the 1898 American occupation of Cuba. I look north toward “La Yuma,” the quirky name Cubans call the United States. In my 15 years working in Cuba, no one can fully explain the name’s origin. For some Cubans, Yuma means the lurking Yankee imperialist, while for others it is a place worth risking one’s life to get to.

I strain my eyes scanning the northern horizon. I try my hardest, but even on a clear tropical night I can’t make out the bright lights of America’s southernmost outpost of Key West. But I know it’s there. I know it’s close. My flight from Miami was in the air for all of 35 minutes.

As a biologist with The Ocean Foundation based at the Miami Science Museum, I have spent almost half of my 38 years studying the close biological links between Cuba and the United States and the rich marine habitats along Cuba’s 3,000 miles of coastline. The links are numerous; not only do almost two million Cubans live in the US, but our cultures and histories are intricately woven.

Cuba and the US have been associated long before there were people around to notice. Sea turtles, manatees, and the tiniest suspended offspring of fish and lobster have flowed back and forth well before Miami or Havana were large enough to light the evening sky. Later on, Hernando de Soto explored Florida and the southeastern US from a base in Havana in 1527. Pedro Menendez de Avilés, the conquistador and governor of Cuba, discovered the site of Miami and later actually founded St. Augustine, America’s oldest city. He was also operating from Havana.

My own family has been a part of these transmigrations. In 1895, during the Cuban War of Independence, my great-great grandmother went into exile in Tampa. My parents followed three generations later as “Pedro Pan” migrants: teenagers who left their families behind in Cuba at the height of the Cuban Revolution. Their thinking was that they would reunite in a matter of months. My mother has never returned to the island.

As a conservationist, the link that interests me most is biological. Florida and Cuba are joined by a narrow yet fast moving body of water called the Gulf Stream. This conveyor belt of biological and human passage has one stubborn feature: It only flows north. As a result, one country benefits more than the other.

This conveyor belt of biological and human passage has one stubborn feature: It only flows north.

All of the seawater departing the western Caribbean for the Gulf of Mexico passes south of the Florida Keys via the Florida Straits. Fish and lobster larvae, coral spawn, migrating sea turtles, and sharks hitch a free ride on this ocean freeway. This is the same body of water that hundreds of thousands of Cuban rafters have crossed to reach La Yuma.

This body of water is not the only thing separating our countries, which haven’t gotten along for almost six decades in part due to the embargo that has sought to overthrow the Cuban government with no success. As a result of academic restrictions, Cuba is a black hole in terms of our scientific comprehension of its biological riches. More than 50% of Cuba’s plants are endemic, meaning that they only grow in Cuba. The island is home to four massive coral reef chains that, if lined up, would be three times larger than the lush Mesoamerican Barrier Reef that stretches from Mexico to Honduras. Three of four of these Cuban reefs are almost as large as the Florida Keys. Cuban forests and plains host swaths of migrating birds making the rounds between their winter and summer homes. Cuba is home to amazing creatures, like the smallest hummingbird and the tiniest frog. Or the secretive almiqui, an ant-eating shrew that seems more likely to be found in Australia or Africa.

In 1999, I set out to prove that the Gulf Stream’s constant flow could move small marine organisms from Cuban waters to American shores. I wanted to dramatize that – no matter the political posturing on both sides of the Straits – protecting Cuba’s marine resources was critical to ensuring the health of our own reefs and fisheries all the way up to Massachusetts and as far west as Texas. I got a chance to work on an oceanographic research vessel out of Texas A&M University that received permission to sail from Cancun into Cuban waters to study oceanic currents. I hitched a ride on that vessel eager to prove a point.

My plan was to release 1,900 bottles off the southern coast of Cuba, each with a conspicuous yellow note inside. The nutrient rich and shallow, sunlit waters of the southern Cuba platform form one of the most highly productive marine areas in the Caribbean. On each piece of bright-yellow paper, the finder was asked to provide the date and the place where the bottle was found. Coral and fish larvae only live so long and in order to move passively over hundreds of miles, they would have had to get there quickly or succumb to the high seas.

My study was a crapshoot with little upside and plenty of drawbacks. For one, here was a self-proclaimed environmentalist and defender of the oceans essentially dumping glass into the ocean. I was sure to hear about this later.

We released our bottles off the coast of Cuba’s Isle of Youth and I returned to Washington, D.C., to wait. A few letters with yellow notes arrived in my mailbox and I eagerly opened them all. Most came from the Cayman Islands. But one day, precisely 46 days after our launch, a letter arrived from West Palm Beach, Florida. A week later, another bottle was reported from Port Aransas, Texas. I shouted with joy! If a vial had made the crossing to Florida in only six weeks, so could tiny fish or lobster larvae. And larger animals that swim would have it even easier.

This is critical to understanding the marine connectivity between our countries. Florida is home to 18 million residents and annually hosts upwards of 90 million tourists. Florida has seen unprecedented overuse of its coastal and reef habitats. The Everglades has been sucked dry and we spend billions of dollars importing sand onto our eroding beaches. We have taken too much out of the system and are relying on importing fish to feed the demand. Biologically, Florida and the US east coast are at the end of the supply chain. These areas rely on pristine habitats upstream more then ever. We depend on healthy Cuban marine habitats more than Cuba depends on ours.

Fortunately, our neighbor to the south has taken a progressive stance in terms of crafting environmental legislation and managing natural resources. Cuba also enjoys a low population density, hosts only three million tourists per year and practices small-scale organic agriculture out of necessity, all factors that have led the nation to be coined by a recent PBS Nature documentary an “accidental Eden.” Cuba has declared a goal of designating 25% of its land and water as protected areas by 2020, a goal that is halfway complete.

Not all the grass on the other side is green. Without help from the Soviet Union, Cuba turned to tourism in order to survive. While tourism figures are paltry compared to those in Florida, they are on the rise.

My experiment was by no means the first nor the last to demonstrate this phenomenon. Oceanographic studies have detected the movement of larvae and algae over broad stretches of the Florida Straits. In 2012, I got another chance to prove my point. In this case, instead of glass bottles, I decided to see if sea turtles born on Cuban beaches would make their way to the US. My Cuban colleagues from the University of Havana and I tagged the backs of five sea turtles nesting at Guanahacabibes National Park in August 2012.

Sea turtles are enigmatic creatures. They have been on the planet in an unchanged form for over 200 million years, making them quite highly evolved organisms. Out at sea for most of their lives, we know very little about them except that female turtles return to land to lay their eggs on the same sandy beaches. This roughly annual homecoming provides a unique opportunity to peer into their curious life histories. However, wherever they migrate, we know that sea turtles display what is called philopatry, meaning that a turtle hatched from one beach will return to that same area to nest. So while we couldn’t expect our Cuban turtles to nest on American beaches, we could learn quite a bit about where these turtles go to feed or mate.

I have worked on the Guanahacabibes Peninsula since 2001, studying a significant population of green sea turtles. It is a wild place, home to dense forests and beautiful coral reefs. The conditions are difficult, but we affixed our tags on our indifferent hosts’ carapaces and waited for a response. Initially, two of the five turtles beelined straight for Florida. I watched their tracks every morning from my office computer. Were they traveling to Florida to feed on seagrass beds in Miami’s Biscayne Bay? Ultimately, Harriet and Conchita made a U-turn to the south halfway from Florida. The good news is they found ample feeding grounds on seagrass beds in southern Cuba, Mexico, and Nicaragua.

Cuba and Florida are among the most important sea turtle nesting areas in the northern Atlantic. My study solely proved that turtles and other marine life do what they need to survive a tough life at sea. In a conservation context, it also showed that we have more work to do to develop cross-boundary policies to protect shared resources such as sea turtles. But how can we create effective policies to ensure the protection of migratory species when two countries don’t talk to each other?

We need to take a step further in engaging with one of our closest neighbors, especially with so much at stake. With an increase in tourism to Cuba comes an increased pressure on Cuba’s fisheries and coral reefs. The status quo of international relations relegates the US to the sidelines. By working with the conservation community in Cuba, my hope is that building bridges between our countries will ensure that Cuba avoids our mistakes, and that both countries formulate conservation decisions that effect species shared on both sides of the Florida Straits. Though more work needs to be done to understand what is at stake, marine science provides one of the few avenues for legitimate cooperation with Cuba. And as I stand on the Havana malecón, I still can’t make out Florida’s lights, though I know we are connected by something more important.

This article was published in the Winter 2014 Edition of Red Flag Magazine.

Bretos, FernandoFernando Bretos (2011 Kinship Fellow) is curator of ecology at Patricia and Phillip Frost Museum of Science in  Miami, Florida. There, Fernando directs The Ocean Foundation’s Cuba Marine  Research and Conservation Program. He has worked in Cuba for 15 years on major  marine biodiversity expeditions, coral reef health assessments and an effort with the  University of Havana to study a green sea turtle population at Guanahacabibes National Park.  As curator at the museum he is also helping design marine science based exhibits for a 250,000 square foot state-of-the-art museum and aquarium in downtown Miami where  the museum will relocate in late 2015. A 2011 Kinship Fellow and 2010 Audubon  Together Green Fellow, he holds a master’s degree in marine affairs and policy from  the University of Miami’s Rosenstiel School of Marine and Atmospheric Science and a  bachelor’s degree in biology from Oberlin College.

Conservation Finance is Gearing Up for Wall Street

March 19, 2014 in Funding, Fundraising, and Finance

Conservation Finance is Gearing Up for Wall Street

By: Logan Yonavjak (2013 Fellow)

Welcome to the third phase of conservation finance. Over the last 25 years, we have moved beyond public and philanthropic capital and begun to witness the growth of private sector involvement in conservation. This process has involved the emergence of mitigation banking, carbon finance, and nutrient trading, and we are now seeing replicable and scalable models, like water funds, emerging worldwide.

However, in order to truly preserve the health of natural ecosystems globally, a much larger amount of capital is needed – not to replace, but rather, to supplement traditional sources of conservation capital. Moreover, while many conservation finance mechanisms have already been tested, most of the work has been focused on the conservation objective and how to meet financing demand for conservation initiatives. However, the supply side of conservation finance – essentially the perspective of investors and their investment approaches – has received much less attention.

A recent report by Credit Suisse, McKinsey, and WWF identified, among other findings, a concrete number to put some perspective on the global need for conservation funding. The authors found that investible cash flows from conservation projects need to be at least 20-30 times greater than they are today, reaching $200-300 billion per year (if we assume that current government and philanthropic funding at least doubles). The good news is that if we can capture just 1 percent of the new and reinvested capital from high net worth/ultra-high net worth individuals, retail, and institutional investors, we can meet this goal.

It is within this context that a team of representatives from Credit Suisse, Equilibrium Capital, Lyme Timber, and Coady-Diemar Partners, joined forces to convene a discussion on how to move conservation beyond donor funding toward an investor-driven approach. In January 2014, more than 50 conservation finance professionals – including public agencies, NGOs, natural resource funds, and institutional investors and advisors – met to discuss scalable conservation finance models at the Federal Reserve Bank of San Francisco.

Broadly, the workshop goal was to identify the conditions needed to attract and redirect private capital toward conservation. Specifically, the conveners wanted to begin to match a number of direct conservation finance strategies and available investible funds with the long-term intent of creating a conservation finance asset class.

“More and more of our clients are looking for opportunities that can deliver conservation impacts while also generating a return,” said Fabian Huwyler, Vice President of Sustainability Affairs at Credit Suisse Group, “that means we need some investible deals that can accept higher volumes of capital.”

The problem is finding the investible deals. Investors need transparency, clear information on risks and return, and assurance that investments will have a tangible conservation impact. Currently, there are several reasons why conservation projects remain underinvested; a major one is that projects are not set up with the same focus on return/impact maximization and replication as traditional business models. For instance, immediate beneficiaries of conservation investments are often difficult to identify, which makes generating a cash flow difficult.

To catalyze the effort to identify investible deals, each workshop participant was asked to submit an idea that either is currently investible, or has the potential to scale and attract larger scale investor capital. The short story is that specific markets and products are at different points along the ‘S curve’ of investability, which ranges from early-stage, and often concessionary capital to large-scale, market-rate finance. Wetlands mitigation banks are fully investible, for example, while many fisheries projects are not. Temperature trading is one project arguably poised and ready for scale.

Case Study: Temperature credit trading

The Freshwater Trust, under the guidance of Joe Whitworth (2003 Kinship Fellow) has operationalized water quality trading in Oregon and is now working to scale up this model nationally. Under this water quality trading framework, a regulated entity (e.g. wastewater treatment facility) signs a contract with a qualified organization with restoration expertise to generate a certain number of temperature credits – built to rigorous quality specifications – which the entity will use to offset the impact of warm liquid effluent it discharges into streams and rivers and comply with the Clean Water Act.

In return, the offset projects entail planting native trees on the streambank within the affected watershed of the effluent discharge and cool the watershed – a cheaper approach than building large cooling towers to treat the effluent.

In terms of meeting large-scale investor requirements:

Transparency: Projects are third party certified, registered, maintained, and monitored annually for a minimum of 20 years.

Risk/return: In addition to the regulated buyers, agreements have been secured with the U.S. Forest Service and Oregon Watershed Enhancement Board to purchase credits that will be retired for conservation purposes.

Clear impact: The conservation impact is clear: temperature reduction.

Next steps

Follow up from the January meeting will involve the development of concrete committees that can begin working on some of the most promising ideas discussed, and also looking at a clear communications strategy that can continue to educate the investing community about the opportunities in conservation finance. The plan is to host a follow-up event in early 2015.

In order to develop appropriate financing structures and ensure that private sector conservation finance results in measureable conservation outcomes, financial institutions and non-governmental organizations must experiment and define their respective roles and approaches. We also need clear policy drivers, new financial products, incubation opportunities for new products and funds, and to keep track of investible deals and projects. For further discussion on making conservation finance investible, here is a recent discussion article that features perspectives from six conservation finance professionals.

We have a new opportunity for collaboration that can help preserve natural capital for future generations – the private sector is starting to see promise in the emerging conservation asset class – let’s start bringing more deals up the S curve.

Kinship_Yonavjak, Logan (2013)Logan has been an independent consultant since 2012. Most recently, she has been consulting with Beartooth Capital, a private equity firm that performs ecological uplift for ranchland in the western U.S.; Working Lands Investment Partners, a private equity fund focused primarily on wetland mitigation banking in the eastern U.S.; and the Conservation Private Capital Group, a team of conservation finance experts working to launch a new U.S. fund for land conservation.

Logan is a freelance writer for Nextbillion.net, Ashoka Changemakers, and Forbes. She received her B.A. with Distinction from UNC-Chapel Hill in Geography with a concentration in GIS. She is a 2012 Property and Environment Research (PERC) Fellow, a Fellow with Tule Partners, and a 2013 Kinship Conservation Fellow. She is also a class of 2015 Master of Forestry candidate at Yale.

Environmental Funds are Network Hubs

March 17, 2014 in Funding, Fundraising, and Finance

Environmental Funds are Network Hubs

By Camila Monteiro (2013 Kinship Fellow)

Environmental Funds (EFs), also called Conservation Trust Funds (CTFs), have occupied an important part of the conservation finance discussion. EFs are a unique type of institution. They are the link between conservation funders and practitioners, intermediating not only financial resources from one side to the other, but also providing the specific conditions that each side needs to achieve their conservation objectives.

They provide a multitude of services to both funders and grantees including: financial control, monitoring and reporting, asset management, procurement services to parks and projects, capacity building to beneficiaries, and design of financial mechanisms for conservation issues.

As intermediaries, EFs always work in partnerships, being a network hub that connects the different audiences, including governmental agencies, park staff, NGOs, community-based organizations, international cooperation partners, private companies, and other Funds.

This position is one of the main advantages of EFs because it provides the capacity to leverage resources from different funders to specific issues, by co-funding agreements and coordinated investments.

Another key advantage of EFs, is the ability to ensure transparency and accountability  in conservation investments, and to provide continuity  in long-term projects, which often depend on close relationships with governmental bodies that are subject of changes due to government cycles.

Most Funds were created after the Rio 92 summit, as mechanisms to implement the international conventions, such as the Convention on Biological Diversity (CBD). At that time, the main sources were the Global Environmental Facility (GEF) and debt-for-nature swap agreements, such as the Tropical Forests Conservation Act (TFCA). Since the nineties, EFs have evolved and diversified their roles. From pure grantmaking agencies, mainly funding Protected Areas, they now operate a variety of mechanisms to support conservation.

Market-based instruments are becoming a more relevant source of funding and there are EFs managing PES revenues, REDD+ credits and funds, and offset projects and portfolios. Funds are also learning how to better work with the private sector, including high impact extractive industries, acknowledging that the relationship with those companies requires Funds to have clear guidelines and limits in place to ensure the validity of the project. Corporate Social Responsibility is one way for extractive industries to offset their impact, but Funds are now looking at the companies’ liabilities and providing solutions as well.

Many new challenges are posed to EFs. To add value, they need to continuously enhance their services while keeping their administrative costs at a minimum. They also have to deal more and more with impact evaluation of the investments, providing not only fiduciary services, but also assessing and aggregating conservation results reported by diverse partners in the field.

Despite some criticism faced by EFs for adding structures and steps to the conservation process, Funds continue to be created in different countries and regions, covering a variety of conservation issues, and increasingly include climate change.

Mentoring new Funds to become quickly operational is a new service that more consolidated Funds are now providing. The Funds’ networking skill has allowed them to gather frequently, exchange experiences, collaborate in collective initiatives and enhance the quality of their services. Networks such as RedLAC (LAC Funds), CAFÉ (African Funds) and the Conservation Finance Alliance – CFA (EFs’ main funders) congregate Funds and their supporters producing collaborative projects. RedLAC has published a series of handbooks for Funds covering their potential roles on PES, REDD+ and offsets, and also covering operational issues such as fundraising, resources mobilization, governance, communication, monitoring and strategic planning. The CFA has published relevant studies on EFs, such as the Rapid Review of CTFs (2008) and an annual survey on Funds’ performance in their investments – the Conservation Trust Investment Survey (CTIS). It has developed an online library of EFs’ documents, the EFs Toolkit. In 2014, the CFA is about to launch a set of Practice Standards for CTFs to guide new and existing Funds.

The Funds community keeps on growing in number and production as EFs start to be known and used by a broader group of institutions interested in conservation.

Monteiro, CamilaCamila Monteiro was born in São Paulo and currently lives in Rio de Janeiro. She joined Funbio in 2005 and became the Executive Secretary for the Latin American and Caribbean Network of Environmental Funds (RedLAC) in 2007. She served as RedLAC Executive Secretary for four years, where she worked with more than 40 Conservation Trust Funds (CTFs) in Latin America, the Caribbean and Africa, to systematize innovative financial mechanisms, best management practices and organize educational exchanges. Currently, she is the Communication & Networks Coordinator at Funbio, leading knowledge sharing projects aimed at strengthening CTFs. She is also part of Funbio’s team studying innovative investment models for creating new approaches to the territorial projects supported by the fund.