To avoid a climate collapse, more than 120 countries are striving to achieve zero net greenhouse gas emissions by 2050. This corresponds to promises of more than 1,000 companies and 450 cities with the same daring commitment. We’ll likely see even more net zero commitments from U.S. businesses and investors next month at President Biden’s Earth Day CEO climate summit.
Most of the attention to actions to achieve this net zero transformation has focused on increasing investments in technologies that reduce emissions from fossil fuels, such as wind, solar, efficiency energy and electric vehicles.
What is less widely understood and discussed in the United States and around the world is that achieving this ambitious goal will also require increased private sector investment in nature-based infrastructure solutions, such as wet area and forest restoration, which help extract carbon emissions from the atmosphere and integrate them into our natural ecosystems.
Private sector investment is the key to ecological restoration
Ecological restoration is a huge climate and a business opportunity in part because there is so much past damage, which luckily can be repaired using current technology and methods. We have a lot of work to do, as more than half of our original wetlands in the lower 48 states have been drained.
Today, a network of rivers and streams 10 times the total length of the U.S. highway system is considerably degraded by pollution, and the Ministry of Agriculture predicted a possible net loss of 37 million acres of forest by 2060.
The US ecological restoration industry is already undertaking some of this work with available capital. For example, approximately $ 4 billion for the restoration of wetlands and waterways is carried out each year by private companies specializing in the repair of damaged aquatic ecosystems. Ecological restoration must meet strict government standards, or it cannot be assessed under well-established federal net-zero wetland policies.
Unfortunately, a dramatic expansion in investments in climate resilience, water quality and ecosystems is held back by government rules. A patchwork of old state and federal laws, approval processes and government procurement strategies too often stifle private sector investments in ecological restoration.
Progress in Chesapeake Bay
The good news is that many lawmakers and climate advocates are working to accelerate the growth of the environmental restoration market by rethinking policies that promote market expansion for job-creating conservation. And there’s no better place to see how this change is already underway than in the surrounding states. America’s largest estuary, Chesapeake Bay.
Virginia has the only country program that effectively offsets water pollution caused by impacts such as the development of single-family homes. It does this by planting forests and protecting restoration companies on neighboring properties.
In Washington, DC, the government implemented the country’s first program that sets a minimum floor price for the future purchase of green infrastructure. This “price lock”Urges private companies and non-profit organizations to build green infrastructure such as rain gardens to offset future construction impacts on stormwater pollution.
In Pennsylvania, a nonprofit and business partnership launched a revolving water fund who pays farmers to restore water quality, whose credits are then purchased by others to meet regulatory requirements.
In Maryland, we’re also starting to see innovative proposals from the state legislature that show how subtle policy changes can dramatically increase private investment in conservation and climate resilience.
An invoice, the Maryland Drinking Water Trade Act, allows the state to purchase millions of dollars in water quality improvements after the project is completed and the water quality benefits are verified. We’re all used to buying products on or just before receiving them, but in an environmental program it’s a radical thing to pay on delivery.
A second innovative bill under study, the Maryland Comprehensive Conservation Finance Act (CCFA), goes further by aligning numerous state programs to attract capital interested in investing in improving the climate and water quality.
For example, protected or restored natural features such as oyster reefs and coastal marshes offer enormous potential to store carbon emissions and protect communities from flooding. Maryland’s CCFA legislation would redefine these climate-smart green and blue infrastructure projects, so that they are also eligible for state infrastructure funding.
The legislation would also put Maryland on the path to establishing standards for cities and counties to account for natural assets like forest carbon in municipal or county balance sheets, making it more likely to invest in maintaining these. active.
CCFA’s centerpiece builds on best practices from a similar proposal recently launched by the USDA. It would define environmental outcomes, such as sequestering carbon or reducing water pollution, as a commodity. By changing the way the state signs contracts for the delivery of these results and standardizing measurement and verification, we would finally create predictable standards to remove much of the uncertainty surrounding environmental offsets.
Private investment in climate resilience and ecological restoration is already on the rise. So too are legislative efforts to increase investment in these nature-based infrastructure solutions. To drive a positive climate future, we must build on the first wave of common sense policy reforms needed to accelerate investments in ecological restoration, which defines the “net” as net zero emissions.
This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.
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Jeff Eckel is President and CEO of Hannon Armstrong, a leading investor in climate solutions.
Male timothy is Executive Director of the Environmental Policy Innovation Center, a nonprofit organization focused on policies that will drive significantly faster environmental progress.