The Economics of Conservation

The Economics of Conservation (and Even More Important Stuff)

We are undoubtedly living in tough times, a time when frivolous expenditures of all types are frowned-upon, at least publicly.  Metrics and dashboards are used to gauge the success of the policies that are meant to rebuild our state’s economy.  Certainly the implication is that things which cannot be measured accurately literally cannot be valued.

The conservation community inMichigan, and elsewhere, is not exclusively motivated by the economic values that accrue to the community from the preservation of land.  We believe in preserving and managing land in such a way that we improve its beauty and its overall health.  And yet, the work that we do has been shown time and again to be essential to the economic well-being of the community.

The economic benefits of open space, farmland preservation, and recreational facilities have now been catalogued over several decades.   Consider the following examples:

  • A review of over 60 studies on the impact open spaces have on residential property values shows that home prices increase based its proximity to a park or recreational area, and to the size of that area.   Most studies find a “premium” on home values when located near a park, and conclude that larger parks and natural areas are more valuable to nearby residents than small parks.  For instance, the authors of a study conducted nearPortland,Oregon, which reviewed some 16,400 home sales, concluded that the optimal size of parks and natural areas to be similar to that of a golf course.
  • Because access to parks and natural areas increases nearby property values, local governments often reap proportionately higher property tax revenues.  For instance, a study conducted in threeMarylandcounties calculated the economic benefits of preserved agricultural land to homeowners.  The study concluded that a 1% increase in preserved open space inCalvertCounty  increased housing values within a one-mile radius by an average of $251,674 – enough tax revenue to purchase an additional 88 acres of parkland in one year.
  • Access to connected open space, such as greenways or trails, has a particularly high impact on property values.  For instance, a study of the Monon trail inIndianapolisfound that average property price premiums for 1999 home sales conferred a net present recreational benefit of $7.6million.

Another way of looking at the value of open space has been pioneered by the American Farmland Trust in its widespread “Cost of Community Services” studies.  Such studies, conducted in far flung locations across the country have consistently shown that certain types of land uses actually not only pay for themselves but they subsidize residential uses.  Time and again, after a careful accounting of both tax revenues generated and the services required from different classifications of land, these studies have shown that farmland and forestlands generate much more in tax revenues than they require in services.  The old adage that “cows don’t go to school” and “cherry trees don’t call 911” is as true in Leelanau as elsewhere.

In fact, since we have a multiplicity of taxing jurisdictions in Leelanau (11 Townships), a review of local millage rates plotted against population density reveals that in fact the highest local tax rates are invariably levied to supply services to our most densely-developed townships.   The two townships with the lowest overall population density,ClevelandandCenterville, also assess the lowest millage rates.

A third category of economic benefits that flow from preserving land falls under the heading of “ecosystem services.”  Scientists who work in the this field strive mightily to place a value on such things as the ability of wetlands to soak up heavy rains, therefore alleviating flooding; the ability of bees and other beneficial insects to pollinate important food crops; and the ability of forests to remove impurities from the air and store carbon.

While it may be difficult to parse out these numbers exactly, no one seriously doubts the validity of the claim:  these lands and the wildlife they support provide valuable services that we can’t replace with any amount of technology.

All of these types of studies do in fact give some sense of the economic benefits to the community of preserved open space, but the numbers they generate are  almost certainly grossly underestimated because they exclude “nonmarket values associated with passive uses, such as just knowing that open spaces exist.”   There is plenty of evidence for this.  Consider, what price can we assign to the overall health (think obesity reduction, for instance) that comes from a daily walk in a natural area.  What price can be assigned to the joy of watching bald eagles soaring overhead, and knowing that those eagles nest successfully near your home?  What of the chance to catch fish in a stream that you can walk to with your grandchildren?

Nearly 100 years ago Aldo Leopold crafted his Land Ethic:

A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community.  It is wrong when it tends otherwise.

It probably doesn’t even need to be pointed out that careful economic analysis didn’t give rise to the Leelanau Conservancy some 23 years ago.  The desire to preserve beauty did, pure and simple.   What motivates us today is the same as it was in 1988, and it would provide sufficient reason to band together to preserve our Clay Cliffs, our Sonny’s Farms, and our KehlLakeseven if it didn’t seem to make economic sense to do so.   Wild things and wild places exist for their own sakes, not just for our pleasure.   But isn’t it great to know that we are on the right side of the “metrics” as well?

-Brian Price, Executive Director 2010

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