[00:00:08] Speaker A: Good planets are hard to find. Now, temperate zones and tropic climbs and run through currents and thriving seas, winds blowing through breathing trees and strongholds on safe sunshine, good planets are hard to find. Yeah.
[00:00:35] Speaker B: Hello, K squid listeners. It's every other Sunday again, and you're listening to sustainability now, a bi weekly K squid radio show focused on environment, sustainability and social justice in the Monterey Bay region, California and the world. I'm your host, Ronnie Lipschitz. Can protection of the environment coexist with economic development and growth? There's been a longstanding debate over this question, with optimists arguing that it is possible to green the economy through technological modernization and careful management of natural resources. Pessimists argue that while air and water in the United States might be cleaner than 50 years ago, we continue to destroy land, forests and waters in the reckless pursuit of more growth. My guest today is an optimist on this question. Larry Seltzer, president and CEO of the Conservation Fund, a Virginia based nonprofit that buys land for conservation and promotes sustainable economic development. The conservation fund works with public agencies to acquire land and hold it until the agencies are ready to purchase it back. And the organization focuses on protecting working forests and farms, which provide clean air, clean water and jobs for rural communities.
Larry Selzer, welcome to sustainability.
[00:01:51] Speaker C: Now, I'm thrilled to be here.
[00:01:53] Speaker B: Why don't we start with some background on the conservation fund? What is it? When was it established? What does it do? Who are its supporters and funders?
[00:02:02] Speaker C: The Conservation fund is a unique institution across the american landscape. We're a national nonprofit and the only nonprofit in the country that's chartered for both land conservation and economic development. And working at that interface between business and environment, trying to balance economic return and environmental protection is where we like to play. Our primary business is buying land on behalf of public agencies at the federal, state and local level. They come to us having identified their priorities, and then we use our balance sheet. We're like the investment bank for conservation, and we acquire the properties that they have targeted. We hold them until the public agencies are ready to buy them back from us. And then when we sell them to the public agencies, we can take our money and put it into the next transaction. And so our balance sheet is a revolving pool of capital that, in perpetuity, will protect land across the american landscape.
[00:03:12] Speaker B: Well, you've answered almost all of the questions that I had. So what's your background? How did you come to be CEO and president of the fund? And what's your experience in the environmental and conservation movements?
[00:03:25] Speaker C: Well, I grew up in Connecticut on the ocean. We lived in a little town called Milford and on Long Island Sound. And from the time I was very young, I wanted to be a marine biologist. Most of my waking hours when I wasn't at school was spent at the beach. It was a rocky beach, and we were either catching bait to go fishing, or we had bait, and we were fishing. I was very lucky after college that I got to be a marine biologist. And I worked at a private biology research station in southeastern Massachusetts called Manomet center for Conservation Science. And when I joined, it was right after Ronald Reagan had proposed opening up the outer continental shelf in the east coast for oil and gas exploration. The New England states hated that idea because they were afraid that an oil spill would destroy commercial fishing and tourism, two of the biggest industries for the New England states. And they filed a lawsuit under a relatively new law called the Marine Mammal Protection act, which is like the Endangered Species act for whales. And they said, look, there are whales all over the place. We have whale watching boats that go out every day, but we don't know anything about them. And you can't explore for oil and gas exploration until we figure that out. And my group got the contract to do the population dynamics for marine mammals, seabirds, and sea turtles from Nova Scotia down to Florida and out to the 200 miles exclusive economic zone. What I learned during the seven years that I was a marine biologist were two very important lessons. The first is that while I love science and I have a passion for natural history, I wasn't a very good scientist. I didn't have the temperament to be methodical and slow going in terms of data collection and analysis. I guess temperamentally, I'm more of an action oriented person. But the more important lesson, Ronnie, was this. We had the data, and at every major meeting where we were asked to present the data upon which major decisions were going to be made, it was like the start of a really bad joke. The politics, the money, and the science walk into a bar, and right before they walk into the bar, the politics and the money would look at the science and say, when we get inside, you sit down and shut up, and we'll tell you what the answer is. And that was an eye opener for me, that that's how the world really worked and how decisions got made was not based on the best science, but either by politics or money. And I didn't have an interest in the politics, the regulatory side of the equation. But what I came to understand over time was that I didn't know anything about money. I was naive to the point of ignorance. And so I made a pivot in my career. And instead of going back to graduate school to get a PhD in science, I went to business school to learn about money. And when I was in business school, I met the fellow who had just founded the conservation fund, a brilliant man named Pat Noonan. He invited me to come and join the conservation fund when I got out of business school in 1990, and I've been here for now more than 34 years.
[00:06:53] Speaker B: I'm curious, what were the results of that study of marine mammals along the coast?
[00:07:00] Speaker C: In answer to your question, animals largely follow discrete patterns in the wild, and most of that is based on food. And so whales and seabirds and sea turtles move. They have migratory pathways following large commercial stocks of fish. And so fishing quotas and marine mammal health as a population were directly related, and oil and gas exploration would have threatened all of that. And so we put together the maps that showed where animals were at different times of year and where their concentrations ought to be protected and where the food source were congregating. And those maps today still drive a lot of offshore decisions.
To generalize, we have an adversarial relationship between industry and government. And regulation is designed to provide the rules of the road, the guardrails, if you will, within which the economic system can operate and succeed. And so regulation comes from political will, but it also comes from economic necessity. And so there's always this push me, pull you. And sometimes the free enterprise system is out in front and regulation needs to catch up. And other times, regulation is out in front, and the free enterprise system innovates to figure out how they can be financially successful within.
[00:08:34] Speaker B: Well, you argue that the future of conservation lies in the convergence of the environmental movement and the free enterprise system. And there's been a longstanding debate about this point, whether conservation and economic growth can be reconciled. How do you respond to that question?
[00:08:50] Speaker C: Let's briefly trace the history of the environmental movement in this country, and that will lead me to answer your question. The modern environmental movement in this country started when Teddy Roosevelt was president at the turn of the 20th century. There were no regulations. There were no government agencies there to protect natural resources. And industry ran rampant over mining and forests and agricultural land and harvesting of animals. And Roosevelt was dismayed by all this, and he decided to put the government out in front, and he created the National Forest Service, he created the Fish and Wildlife Service, and he greatly accelerated the growth of the National Park Service. But the vision of conservation was that the federal government would draw lines on the map and set these lands aside. These were iconic landscapes, and they would set them aside, essentially protecting them from people, protecting them from economic interests. And that model lasted all the way through the end of World War two, when the country faced a different set of problems, largely pollution, due to the rapid industrialization of the country. And all of a sudden, we were facing air pollution, water pollution, chemicals, pesticides. The situation was becoming quite acute. And in 1962, a magnificent woman named Rachel Carson published a book called silent Spring, which for the first time, brought together human health and the environment. And her book unleashed a tidal wave of grassroots activism. And out of that came the Clean Air act, the Clean Water act, the endangered Species act, some of the most important pieces of legislation this country's ever seen. There are now more than 10,000 environmental nonprofits operating across the United States, and more than 50,000 pieces of environmental legislation and regulation at the federal, state, and local level. And that really was the second wave of the environmental movement in this country. If Roosevelt represented the first, Rachel Carson represented the second. And now we come to a place where we have largely dealt with those acute pollution problems. Industry knows the guardrails within which it must operate, and we face a different challenge, which is how to grow the economy, how to accommodate what is projected to be 600 million people in this country. How do we make an energy transition that will require a massive amount of infrastructure to be built and deployed across the landscape? And these challenges can't be done by, or cannot be addressed by government alone, because they involve private lands and financial resources that only industry can marshal. They can't be dealt with by philanthropy alone, because there isn't enough philanthropy, and it can't mobilize fast enough. The only way that we're going to bring the innovation and the capital to bear on climate change, clean water, biodiversity loss, all of these food security, all of these major issues, is by bringing together two of the most powerful forces that this country has ever seen, and that is the environmental movement and the free enterprise system.
We need the energy, the innovation, the sophistication, the speed and the scale of business to come to bear on the challenges of the environmental movement, whether it's climate change, water quality, food security, or biodiversity.
[00:12:34] Speaker B: If I hear you correctly, the free enterprise system does imply greater access to natural resources as the sort of sine qua non for economic growth.
[00:12:45] Speaker C: The free market, unfettered, is a disaster in terms of outcomes, and precisely because of the tragedy of the commons. If nobody has to account for the cost to the environment to nature, to clean air, clean water, or species diversity, then we will lose all of the above. And so what I'm talking about is a convergence of the best of the free market with the best of the environmental movement. Regulation has to be a strong part of that. Let me give you an example, and I'm going to use our work in forest conservation across the United States. It wasn't that long ago that almost all of the large, intact working forests, and by working forest, I mean forests that are being harvested. So fiber is being taken off. These lands are on the tax rolls. They provide jobs to two, 3 billion people across rural America. But it wasn't that long ago that these forests were owned by vertically integrated pulp and paper companies. Essentially, they owned the forest to guarantee wood supply to the mills. And in the mills, they either made paper or boxes or two by fours, whatever it was, and they sold that for high profit. Beginning in the 1990s, there were some structural changes in the forest products industry, and essentially almost all of the vertically integrated pulp and paper companies sold their forests. It was like a tidal wave of disinvestment, if I can use that. And it happened at such a speed and such a scale that the environmental community was able to secure almost nothing in terms of permanent conservation. When that first wave of sales took place, 20 million acres was lost right off the top, converted out of forests into housing developments, shopping centers, industrial parks, what we call euphemistically higher and better use lands. From an economic standpoint, 90 million acres of land was sold. It's the largest transfer of private lands in the history of the United States. And we lost 20 million right off the top. So now we have 70 million acres, which was, interestingly, purchased by a new set of buyers. And these were pension funds, university endowments, who began to view timber as an asset class.
And so they would aggregate capital, they would buy these forests and manage them. The good news is they bought 70 million acres of forest. There's still forest. The bad news is they would organize their capital in ten year increments, and at the end of ten years, they would have to return capital back to the investors with maximum returns. And the way they did that was by liquidating the forest and subdividing it for housing, shopping centers and industrial parks. And over the last 20 years, we have lost another 20 million acres of forest, and we continue to lose a million acres of forest every year in this country. There's 50 million acres left. The 50 million acres of large, intact working forests have been analyzed, and roughly 10% of that is of high conservation value. That's 5 million acres. Well, if you impute a value of, let's say, $1,000 an acre, that's an extraordinary sum of money. More than philanthropy has ever put forward, more than the government could ever put forward. And frankly, there isn't the political will to buy 5 million acres of forests and take it away from economic activity. The conservation fund looked at that challenge and decided we had to create something that didn't exist. A working forest fund where we could aggregate philanthropic capital, impact investing capital. We could tap the capital markets, which we did in 2019, issuing the very first green bond for conservation. It was $150,000,000.10 year taxable note. And we started competing for these forests when they came on the market. Most of them are sold at auction. And we have now passed an incredible milestone of acquiring 1 million acres of working forest as a nonprofit. We're one of the largest timberland owners in the country. All of these forests are on the tax rolls. All of them are still being harvested, but in a sustainable fashion. All of them will be returned back to the private sector after we have put a permanent conservation easement in place. That's a deed restriction that says these properties can never be subdivided, they can never be converted out of forestry, they can never be over harvested, but they can serve as working forests, which yields five, six, 7% annual returns. And that's an example of bringing together the best of the free market with the best of the environmental movement. We borrowed the skills, the tools, the ability to move quickly with scale and sophistication from the markets. But we deployed the capital we were able to use purely in this new brand of conservation that says that we need to protect these lands as economic assets. Otherwise, we're condemning these rural communities to death.
Many of them exist only because of the forest products industry. Over the last hundred years, we're maintaining the tax base, we're maintaining jobs, 2 million jobs that can't be exported overseas. But we are protecting the public interest values of intact forest, clean air, clean water, habitat for wildlife, opportunities for recreation, sinks for carbon, to address climate change. And so we're bringing the free enterprise system and the environmental movement together in a unique way, defined, redefining conservation for the future that can operate at scale.
[00:19:11] Speaker B: You're listening to sustainability now. I'm your host, Ronnie Lipschitz, and my guest today is Larry Selzer, president and CEO of the Conservation Fund, a Virginia based nonprofit that buys land for conservation and promotes sustainable economic development. And we've just been talking about the ways in which the conservation fund purchases lands, especially forest lands, and then eventually resells them with a conservation easement on the land that restricts the uses to which the land can be. Who are the. Who invests in the conservation fund? Because I'm assuming you do have to find sources of capital to help you do this.
[00:19:55] Speaker C: Of course, we are always looking for new forms of conservation capital because our aspirational view of mission is far greater than our ability to deliver with our existing balance sheet. But if I can use an analogy, Ronnie, we're like the investment bank for conservation. So we have our own pool of capital. We call it our revolving fund, which goes in and out of transactions all the time. We'll close 150 to 200 transactions a year. Every year. Over the last 38 years, we've completed 4000 transactions.
More than 9 million acres valued at more than $10 billion across all 50 states. And we have this pool, this revolving pool of capital that goes into a transaction. And then when we resell that asset, either to a government agency or to the private sector, subject to a permanent conservation easement, we can recycle our capital into the next transaction. Our business model is interesting, and I think unique, in that the vast majority of our operating budget is covered through earned income. In other words, we get paid to structure and complete transactions on behalf of government agencies.
And so we raised our pool of capital through philanthropy, and we need to do a lot more of that. But the deployment of that capital actually pays our operating expenses each year. I mentioned earlier that we tapped the capital markets for the very first green bond for conservation ever done. We were looking for a way to accelerate beyond the reach of philanthropy. The work that we were doing, interest rates were low. It was an ideal time to go to market, and we had to get rated. And we got an investment grade rating from the rating agencies. That allowed us to get significantly advantageous cost of capital in the bond market. And our bonds were oversubscribed several times. Overdose. The only reason we did not upsize the bond, as I said, it was $150 million, was that our balance sheet just couldn't sustain more debt without jeopardizing our credit rating. But we are now exploring all kinds of joint ventures, strategic alliances, where we can essentially make use of other people's balance sheets to achieve mission, use their capital on a temporary basis, and then after a designated period of time, we can return the capital back to them with some nominal return. That has never been done before in the conservation space. And it is a true innovation around deploying capital to achieve conservation outcomes.
[00:22:51] Speaker B: Can you give a specific story or case study about this just to help our listeners get a better sense of how that works?
[00:23:00] Speaker C: There's something that the tax code provides for, which is called a recoverable grant, and it's not a loan because we are not obligated to repay at a fixed rate of return. It is a grant that an individual or a company or a foundation can make to us for a discrete period of time. We then use that capital to buy land for conservation. When we sell that land to a public agency, for example, and recover the money, we can return that money back to the investor. This is the recoverable part of the grant they made to us, and if there is sufficient return, we can pay them, essentially a small return for the use of their balance sheet. This is a way for us to access capital that isn't debt, because right now we can't really put more debt on our balance sheet and significantly grow our ability to buy more land.
[00:24:05] Speaker B: Well, just to push that a little bit more, first of all, when you buy a piece of property and sell it back, do you sell it back at some premium?
[00:24:15] Speaker C: It's an excellent question. We do not sell it back at a premium. We have to follow the federal appraisal rules for what a property is valued at. It's called a yellow book appraisal, and so we won't pay above the appraised value for a piece of property. But when we sell it back, we can sell it back at that value that we paid for it. But we charge interest on the money because essentially we served as the bank for the transaction. We can recover all of our direct expenses, the staff time, the cost of surveys, the cost of closing. And we also can charge overhead. Nonprofits need to charge overhead in order to fund their operations. And it is that pool of money above and beyond the actual sales price that we can share with someone who allows us to access their balance sheet for a discrete period of time.
[00:25:15] Speaker B: Of course, the market assessment depends on the potential uses of the land, right? So the implication is that the land will remain restricted no matter what. I mean, basically, if you're doing the assessment, say it's a piece of land that's not too far from a city because that's where development would take place. Right. The potential.
This is a problem with farmland, too, as I'm sure you're aware, that there's more money to be made in selling off farmland than in farming, by and large. So the assessment does not take into account, or does it? The potential alternative uses of the land when you're buying it. Did I make that question clear?
[00:26:02] Speaker C: Yeah, you know you did. And it's actually a wonderful question if you think about our forest land model. It's a buy, protect, sell model, right? We buy the forest, we protect it with a conservation easement, and then we sell it back into the private market, subject to the easement. We believe that that model could have enormous implications and benefit to farmland, particularly small farms near major metropolitan areas, which are sprawling out and essentially overwhelming the agricultural enterprises that exist on these farmlands. Take the city of Atlanta, the fastest growing city in the history of the world. In terms of landmass. There's still about 30 or 40,000 acres of productive farmland surrounding the city of Atlanta. But as the city of Atlanta encroaches on this farmland, that land gets appraised at what's called highest and best use, which means development, not farming.
So if you're the farmer who is now reaching retirement age, and you are cash poor and land rich, the land is your retirement. And by the way, the average age of family farmers in this country today is north of 60. And so this problem is acute all across the country, around every major metropolitan area. The problem is that to solve the existing farmer's retirement need, they need to get paid what that land is worth, which is way above agricultural value.
The next problem is, even if you could buy that farm, the next generation young farmer can't afford to buy in the. Because if they have to pay development value, they'll never be able to make money. It's too much price. So we developed a farms fund that is designed to specifically address the pinch points in the transition of farmland around major metropolitan areas. We launched it two years ago around Atlanta. We're now outside of Chicago, outside of Charlotte, and expanding into more cities in 2025. Here's how it works. We buy, we raise a pool of capital, and we buy a farm from the aging farmer, and we pay them the full value, the development value for that land. So we have solved their retirement issue. They got paid for their land. Now we enter into a lease with an option to buy to a next generation young farmer, and they get to operate the farm and run a business and demonstrate that they have the financial and technical wherewithal to manage a farm during the period when they are leasing the farm. We sell a conservation easement on that farm to a public agency. In the case of outside of Atlanta, it's to the state of Georgia, which has a dedicated pool of funding for agricultural easements.
Once the easement is in place. We have essentially stripped off permanently the development value and returned that property to agricultural value. Now, the young farmer can actually buy in at an appropriate price that would allow them to have a successful farming enterprise. And the fact that they have managed the farm for five, six, or eight years gives them a track record that they can now go to the bank and borrow the money to buy the property from us. So we have solved the retiring farmers problem. We have solved the asymmetry and value between development and agriculture using conservation easements. We've solved the lack of creditworthiness by the next gen farmer because they've managed the farm for six or eight years, and they have a track record they can take to the bank. And we have now acquired 15 or 18 farms, which we're in the process of moving through that cycle right now. And it works incredibly well. And so this is another example of using the tools of the marketplace and converging them with the passion and the vision of the environmental movement to achieve.
[00:30:42] Speaker B: An outcome that raises a whole set of questions. So the conservation easement, the value of that is equivalent to the difference between the value of the land for farming and the value of the land for development, is that correct?
[00:30:56] Speaker C: That's correct. So the way you arrive at the value of the easement is you do two appraisals. You do an appraisal as if the land was going to be developed, that's called HBU, or higher and better use.
And then you do another appraisal as if there was no development value, just the agricultural enterprise. And the difference between the two appraisals is the value of the easement. Now, on a farm that's near Atlanta, the value of the easement might actually be 60 or 70% of the value of that land. If you're in a forest in north central Maine, it might be only 30% of the value of the land. And so it depends on where the land is and what the development pressures are. But that way you arrive at a discrete value for the easement that you can either fundraise or use government funding to acquire.
[00:31:50] Speaker B: Does this differ from what an agricultural land trust does?
[00:31:55] Speaker C: Agricultural land trusts largely are working off of donated conservation easements.
They rarely have the capital to move at scale and at speed, and we want to take this to be a national program. Now, a key component of this is we believe that the strongest infrastructure for this kind of work is a partnership between a national organization that can mobilize capital and move with scale and sophistication, and speed with local organizations that may hold the easement that may help the farmer after our transaction. And so we are very partnership oriented. We don't intend to supplant or push aside local partners who are doing great work. We want to bring them additional resources and scale their ultimate mission outcomes.
[00:32:45] Speaker B: You're listening to sustainability now. I'm your host, Ronnie Lipschitz. My guest today is Larry Selzer, who is president and CEO of the conservation Fund. And we've just been talking about an interesting approach to the protection of farmland, which I'm not going to go over again because it's a long story, but it sounds quite interesting in terms of how it works. Now, are you doing this with your internal funds, or have you gone out and solicited investors or supporters of this.
[00:33:21] Speaker C: Project, both internal and new capital that we're trying to raise. So we launched this farms fund. We launched the forest fund with internal capital. But as the program scales, we need to secure additional new forms of conservation capital. The interesting thing, as we talked about earlier, is it doesn't need to be straight up philanthropy, where people just give us money and it's ours forever. They can actually just let us use their money for some period of time to achieve mission outcome. And then because we are rolling into and then out of these projects, recovering the principal, we can give them their money back. And so it's a unique business opportunity that sits in between market rate investments and straight up philanthropy.
And so we're really excited that this is an opportunity to mobilize capital at a scale that has not been done before, because people don't have to make the permanent decision to give their money away. They can just let us use it. Now, of course, philanthropy is critically important. There are times when we need to leave money in the transaction. We need matching funds. And so we're always looking for a balance between this impact, investing and philanthropy, and all of that fuels our growth.
[00:34:44] Speaker B: Do you have any plans to expand to California?
[00:34:47] Speaker C: Actually, we do. In Washington state, the midwest, around Austin, Texas. All of these are areas where there are extant acres of farmland, mostly not corporate farms. A lot of farmland has transferred into what I would call industrial or investor ownership. We're talking about, frankly, an endangered species in this country called the family farm. But culturally and economically, these are critically important for communities and for landscapes, and those are the geographies, and those are the situations where we think we can add real value.
[00:35:27] Speaker B: All right, let's switch topics here. I'd love to pursue that one further.
Now, the fund runs. What are called compensatory mitigation programs for habitats threatened by various development activities. Can you explain what that is and how you do that?
[00:35:49] Speaker C: Sure.
We got into what an umbrella term would be called, mitigation. In other words, big infrastructure gets built, whether it's a chemical plant or a pipeline or a wind farm or transmission lines, big infrastructure gets built, crosses a lot of land. It impacts a lot of land, and sometimes important resources are impacted negatively. It could be endangered species, it could be wetlands, water quality, streams, whatever it is. And we realized early on that while we are not advocating for that infrastructure to receive a permit, that's not our role. We are not working for the infrastructure developer. But if a permit is going to be issued for a project that a government agency views as essential to have built, could be a pipeline, it could be a transmission line or a solar farm, and that infrastructure is going to impact resources that we can help deliver the mitigation for that impact by acquiring and permanently conserving habitat equivalent to what was taken away or even in greater excess than what was taken away. And over the last 15 years, we have mitigated for a lot of big infrastructure projects, and we have been able to protect several hundred thousand acres of essential habitat in the process, nearly $400 million of new conservation capital that otherwise would not have been available because it's private funding, it's not government, it's not philanthropy. And we have added that to the mix to protect these important lands. The most interesting part about this, Ronnie, is if you take that equation and project that forward to the energy transition that we need in this country to address climate change. The scale of the infrastructure that we're going to need to transition to renewables away from fossil fuels is staggering. The Inflation Reduction act contemplates nearly a million miles of new transmission capacity, nearly 100,000 miles of new pipelines to capture carbon dioxide and transport for underground storage, new mines for critical minerals to electrify transportation and industry, it's going to impact hundreds of millions of acres of land across this country.
Having said that, we are now in a biodiversity crisis in the United States, frankly, across the entire globe. But in the United States, we're losing species at an accelerating rate. To address the biodiversity crisis, we're going to need to protect millions of acres of new land.
So how do we put the millions of acres of land that are needed for infrastructure, together with millions of acres of land needed to protect habitat and species? And that's where we're leaning in to help accelerate the energy transition to address climate change. And use that as a mechanism for protecting millions of acres of land that is impacted by the infrastructure that's going to need to be built. That's an example of mitigation, if you will, at scale, allowing for the energy transition to address climate change, but also creating new conservation capital that can be used to stem the loss of biodiversity of across the country.
[00:39:40] Speaker B: Well, how do you identify and select the land that is going to be put aside as compensation, mitigation compensation?
Does it have to be near the affected, the land that's being developed? Can it be elsewhere? What are the criteria for decide, because, of course, habitats difference. So I'm sort of wondering, what are the criteria for doing something like that, identifying land and selecting it for protection?
[00:40:11] Speaker C: Yeah, it's a terrific question. So, in the mitigation space, there are two forms. One is a regulated form called compensatory mitigation. And that's where an agency recognizes that infrastructure is going to have a negative impact on a regulated, an endangered species or a river or a wetland, where there's a law that determines what can and cannot be done. Compensatory mitigation dictates that the mitigation occur adjacent to the injury, if you will, that the infrastructure being developed causes. And so the agency that would approve the permit, it might be the National Park Service or the US Fish and Wildlife Service or the state of West Virginia, will tell us what lands they want protected as a result of issuing the permit, and then we'll go and do the transactions. That's on the compensatory mitigation side, then.
[00:41:19] Speaker B: Does that apply to public lands or also to private lands?
[00:41:22] Speaker C: It's acquiring private land. Public land is already protected public ownership. So this is a way of protecting additional resources, land resources, using the private capital as the money to complete the transaction. Now, on the other side, largely associated with things like the energy transition, you're talking about voluntary mitigation. In other words, crossing farmland or ranch land where there isn't an endangered species, you're not building a line across a river or destroying wetlands. And the question then is, how do you arrive at a mitigation number that is credible, that has meaning, that can be implemented, and that benefits the affected parties? And for that, we're focused on developing best practices around what are called community benefit agreements. In other words, where the injury occurs is where the benefit should be placed. Sometimes that'll be in terms of land and habitat protected. Sometimes it might be in recreational access points. Sometimes it might be in developing a health clinic in a rural community. That's lost its only access to health care. Sometimes it could be improving transportation corridors. Communities have, rural communities in particular, have real needs. They are struggling. And a lot of the infrastructure that is going to be built around the energy transition is in rural America. And so we're trying to make sure that when infrastructure is built, impacted communities benefit. And that's where we're devoting a lot of attention these days.
[00:43:15] Speaker B: So in that case, the compensation is not equivalent to the damage to the land, whatever it might be, right? It's in terms of services and other kinds of benefits, it might be an.
[00:43:26] Speaker C: All of the above approach. So it might be that if you're building a transmission corridor or a wind farm out on the western grasslands, sagebrush areas, and you have a species like sage grouse, which is in decline, a component of that might be protecting critically important sage grouse habitat, but it also might be other investments that benefit communities, helping rural communities not just survive, but thrive.
[00:43:57] Speaker B: Another thing I ran into was in lieu fee programs, which is related, I guess, to this compensatory mitigation.
But how does that operate?
[00:44:09] Speaker C: Yeah, in lieu fee programs, and we have a great deal of experience. We ran the in Lou Fee program for wetlands across the state of Alaska for nearly 15 years, and we currently operate the largest in LoU free program in the country, which incorporates some 20 states around bats. Bat conservation.
Some people may know that there's a recent fungal infection across bat communities that has caused the decline of bats by, in some cases, more than 90%. Bats are critical to the ecosystem. For one thing, they eat a heck of a lot of mosquitoes, and mosquitoes transport diseases. So bats are really important. The problem with something like bats is that they migrate and they don't live in one place. They live across a vast range, some 20 states across the United States for the long eared bat.
And so we created an in loop fee program so that any developer that impacts resources important for bats can pay into the fund, and then we can expend that fund anywhere within the in Lu Fee program boundary that is most important to conserve and protect bat populations. And it's a very effective mechanism for large geographies. Rather than point source injury, consider it like non point source injury, in other words, that you need to protect the best bat hibernation areas or forest habitat anywhere within their range. And an in lieu fee program provides that flexibility.
[00:45:51] Speaker B: And how is it working? How well is it working? Do you have results yet, or is it too new?
[00:45:56] Speaker C: Oh, no, it's working extremely well. We've acquired many thousands of acres for bat habitat across the range of several species, the Indiana bat, the longear bat, and all of that through the in loo fee mechanism. And the nice thing is that it allows a developer to pay into the system. And instead of, let's say, that their impact was valued at $100,000. Well, $100,000 doesn't buy you a lot of land, but if you can pool that with ten other project developers who put $100,000 in, now you have a million dollars. Now, you could go by a significant amount of habitat for bats. And so ecologically, you can have a much greater impact, in this instance through an in loop fee program, rather than tying mitigation to each individual project. It's a way of getting to scale.
[00:46:55] Speaker B: You're listening to sustainability now. I'm your host, Ronnie Lipschitz. My guest today is Larry Selzer, president and CEO of the Conservation Fund, which is based in Virginia. And we've just been talking about in lieu fee programs, which allow developers basically to pay for the protection of habitat critical lands in other areas nearby or in, across geographic scales.
I don't really want to get into politics, but I can't resist asking this particular question. Apparently, Donald Trump plans to seize federal lands for new housing.
And I know this is not quite within your bellywick, and maybe you don't want to say anything about it, but does it make any sense at all?
[00:47:53] Speaker C: Well, in anything, there's a kernel of truth. First of all, the president doesn't have the right to see, no president has a right to seize lands and convert it to housing. If the land is owned by the american people, it would take an act of Congress to do so. Lots of promises get made in campaigns that are either untethered from reality or will never take place. Having said that, Ronnie, there's a very interesting situation, and I'm going to go to Nevada to describe this, but let me just say this. Affordable housing in the United States is in crisis. And as outdoor recreation continues to grow, and particularly after the pandemic, it's now a trillion dollar industry across the United States, outdoor recreation. And it is tied to public lands where people want to go and recreate. There isn't enough housing to house the people who work at and support these public lands and the people, the tourists, who want to go and enjoy these public lands. And so as a nation, we really need to address this. And the conservation community needs to take affordable housing seriously. If we want these lands to be managed appropriately, we want to be able to go and recreate there. Then we have to take care of the people who are stewarding these lands, who live and work and want to raise families next to them.
In Nevada, the Bureau of Land Management, which is the largest landowner in the United States, I think it's almost 200 or more than 200 million acres of land, mostly in the west, owns a lot of land that has very little to no ecological value.
Now, they also own millions of acres of land that is of exceptionally high ecological value. But in and around the city of Las Vegas, the Bureau of Land Management owns lots inside the city of Las Vegas, inside Clark county, right adjacent to the city of Las Vegas. You can't tell me that those lands have any ecological value. They're surrounded by casinos.
Logically, they ought to be developed for something important.
And when Harry Reid was in the Senate and the Senate majority leader, he passed a law called the Southern Nevada Public Lands Management act, which allows the Bureau of Land Management to sell those non conservation lands. It's not a big number in terms of acres, but a very high dollar value, and those lands can be sold to support, for example, affordable housing. There is more public land surrounding the city of Las Vegas than anywhere else in the lower 48. There's 16 million acres of public land. People go there to visit public lands, and yet there is almost no affordable housing that the workers can stay in. To me, that's an example of slightly decreasing the federal estate, selling off land, but upgrading the quality of the federal estate, because the money that is raised by selling those in town lots is then used to buy high conservation value land. And in the meantime, those lots can be used for other publicly important issues like affordable housing. That's an example where the government can be a catalyst for incredibly important work, slightly decreasing the federal estate, upgrading the quality of the federal estate, and delivering public housing. So what former President Trump is proposing, that's not going to happen. But these types of creative solutions with government as a partner with the private sector, those are opportunities for real win wins.
[00:52:00] Speaker B: Have you spoken with BLM about this?
[00:52:03] Speaker C: Yes. In fact, I was at a meeting last week in Pittsburgh sponsored by the outdoor Recreation Roundtable. It was a terrific meeting where I led a panel on affordable housing tied to public lands, the gateway communities, to these magnificent parks and forests and refuges. And this program was highlighted. So we're looking for innovation, we're looking for creativity. But frankly, it's going to require the environmental movement to broaden its perspective on what conservation looks like. It can't just be about setting aside wilderness, protecting land from people we also need to think about protecting land for people, and this is a great example of how that can happen.
[00:52:46] Speaker B: All right, well, we're out of time, but all this has been really interesting, and I want to thank you for being my guest on sustainability now.
[00:52:54] Speaker C: Ronnie, thank you for having me. It's been a real pleasure.
[00:52:58] Speaker B: You've been listening to sustainability now interview with Larry Selzer, president and CEO of the Conservation Fund, a Virginia based nonprofit that buys land for conservation and promotes sustainable economic development.
If you'd like to listen to previous shows, you can find
[email protected] sustainabilityNow and Spotify YouTube and Pocketcasts, among other podcast sites. So thanks for listening and thanks to all the staff and volunteers who make Ksquid your community radio station and keep it going. And so until next, every other Sunday, sustainability now.
[00:53:41] Speaker A: Good planets are hard to find now, through currents and thriving seas and winds blowing through freezing trees, good planets are hard to find. Yeah.
[00:54:07] Speaker B: Good.
