1. Evaluation of a Land Conservation Credit
Jim Hawhee N.C. Division of Water Resources 05 August 2016
Department of Environmental Quality

2. First things first…
One, I absolutely agree that land conservation is a good thing, even a great thing…. Please don’t think my criticism of the draft nutrient load reduction crediting method for conservation is a universal criticism of conservation.
–Rich to UNRBA/Cardno
“I was really hoping to find a constructive line of reasoning to better justify a land conservation credit”
-Jim to Rich
“The Division recognizes that land conservation is an important tool to protect water quality and can potentially avoid future nutrient load increases. We also recognize its multitude of other benefits, including sensitive habitat protection and recreational opportunities for the citizens of our state.”
–Jay Zimmerman to Forrest Westall
Department of Environmental Quality

3. The Setting: Load Reduction Credits
J/F rules require nutrient reductions from a baseline year to restore water quality.
“Load-reduction credits” are used to track progress toward these goals.
Falls rules: “address the extent of load reduction” from “reforestation with conservation easement or other protective covenant.”
Jordan rules silent.
Department of Environmental Quality

4. The Setting: Load Reduction Credits
Offset rules: “the party seeking approval to sell excess loading reductions shall provide for accounting and tracking methods that ensure genuine, accurate, and verifiable achievement of the purposes of this rule.”
NSAB role in advising regarding nutrient accounting.
Department of Environmental Quality

5. Proposal Summary
“The credit associated with land conservation would be calculated as the difference between the average annual loading rate from new development … and the observed loading rate in undisturbed forests…”
Preliminary cap proposal
Preliminary conservation easement terms
Geographic limitation to UNCWI-identified high priority lands
Geologic Province
Annual Nitrogen Credit (lb/ac/yr)
Annual Phosphorus Credit (lb/ac/yr)
Carolina Slate Belt
1.2
0.19
Triassic Basin
0.4
0.16
Raleigh Belt
1.1
0.17
Department of Environmental Quality

6. DWR Technical Concerns
Load Reduced…
Loading
Verifiable nutrient reduction and credit
BMP installed, cattle fenced, etc., etc.
Time
Department of Environmental Quality

7. DWR Technical Concerns
… vs. Load Avoided (Conservation Easement)
Speculative increase avoided
Loading
Verifiable nutrient reduction
(0)
Easement secured
Theoretical development
Time
Department of Environmental Quality

8. DWR Technical Concerns
Load Reduced vs. Load Avoided
“As we’ve recognized previously, this practice is unique …in that it does not result in quantifiable load reductions from pre-existing conditions; instead… it may result in stemming of future load increases from watershed development. We – NPS Planning Branch staff – continue to see this distinction as a fundamental barrier to assigning the practice ED load reduction credit..”
-February 2016, DWR to Cardno/UNRBA
Department of Environmental Quality

9. DWR Technical Concerns
Response?
“We do not understand why a load avoided would need to be reported separately from a load reduced if load reductions are avoided either way: either by future load avoided or by existing load controlled onsite.”
Department of Environmental Quality

10. Technical vs. Policy
Let me say again, maybe in a different way, this isn’t a technical debate.  This is a public policy debate.
-Forrest Westall to Rich Gannon, Nov. 11, 2015 
Department of Environmental Quality

11. UNRBA’s Position (a distillation…)
Let’s make it simple.  Relative to nutrient impacts to the Lake:  Forest land conservation:  GOOD. Development of forest land: BAD. Avoiding the potential for additional nutrient load is a credit, no matter how you look at it. 
-Forrest Westall to Rich Gannon, November 2015
Department of Environmental Quality

12. Staff Policy Assessment
Credit and accounting integrity
Credit proposal evaluated in the context of the J/F rules
Civics 101: limits on executive power
Standard of review .
Department of Environmental Quality

13. Staff Policy Assessment
Incentivizing Land Conservation
Worthy of incentivizing? Sure… But where does this incentive come from?
Mixing “speculative loads avoided” with actual loads reduced.
Land conservation at the expense of load reductions and water quality improvements.
Department of Environmental Quality

14. Moving forward: DWR
The Division and staff remain open to (and happy to assist with!):
Crediting restoration activities (including reforestation) on conserved lands.
Studying land conservation in the context of the Falls relook, the UNC study, and rules readoption.
Evaluating proposals that seek to incentivize land conservation for its source protection value.
Department of Environmental Quality

15. Big Picture Issues: Land Conservation in the Nutrient Strategy Context
The speculative nature of conservation easements for pollution avoidance
Role of future land use projections
Allowable activities and conservation easement language
Varying incentive approaches
The near-term conversation
Department of Environmental Quality

16. Questions?
Department of Environmental Quality

17. Procedural Setting and Timeline
Regarding the timeline, Rich and Forrest have had informal conversations on this topic for several years.
First conceptual proposal provided by Cardno/UNRBA on 10/20/2015.
Agency/Cardno/UNRBA discussions hitting on many of the themes I’ll cover in this presentation through November 2015.
I was brought in on this discussion around the New Year…
2/4 Cardno/UNRBA revised proposal submitted to DWR.
2/15 DWR comments to revised proposal.
3/9 Cardno/UNRBA response to comments.
4/13 DWR staff denial of the credit.
6/7 COR/Cardno appeal to Director (meeting)
Department of Environmental Quality