ABSTRACT
Market-based instruments, also known as financial incentives, have grown in popularity over the past 40 years to promote the protection of a variety of rural lands, including farmland and forestland, wildlife habitats, and recreational lands. The United States has been a leader in voluntary, market-based instruments most notably through the purchase and donation of conservation easements and the transfer of development rights. More recently, some rural landowners have been able to receive payments for reducing greenhouse gas emissions based on land management practices that sequester carbon. Market-based incentives appear most effective when combined with comprehensive plans and land-use regulations to manage growth. Regulations – such as zoning and urban growth boundaries – are less expensive than market-based instruments, but are vulnerable to political change. The acquisition of conservation easements provides long-term protection from incompatible development through a binding legal contract. The cost of acquiring conservation easements can be as high as 90 per cent of the fair market value of the property, however. Regulatory techniques can restrain the cost of acquiring conservation easements. Transfer of development rights has achieved some noteworthy success, but is more difficult to implement than a purchase of conservation easements programme. Finally, payments to rural landowners for environmental services could expand significantly if the federal government were to adopt a national cap-and-trade programme with carbon offsets.
