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OEMOffice of Environmental Markets
Eco-Enterprise Zones: An idea looking for a home
A Community on Ecosystem Services ConferenceChandler, AZ
Nov 2010
Albert Todd, Chesapeake Bay Team LeaderUSDA Office of Environmental Markets
“We will not be able to sustain our businesses over the long haul because they are based on
assumptions that no longer hold. One was cheap, unlimited supplies of non-renewable
resources would always be available. The other was assuming an unlimited capacity for the
earth's ecosystems to absorb the waste of our production and consumption.
Chad Holliday, CEO, DuPont (2001)
OEMOffice of Environmental Markets
“Environmental markets…offer farmers and ranchers new sources of revenue that also create
public benefits for all Americans, such as clean water, clean air, and wildlife habitat.”
USDA Secretary Tom Vilsack, 2009
OEMOffice of Environmental Markets
"The most urgent priority is to put into practice what we already know, with all the
accompanying warts. We must learn by doing and mistakes will be made, but we
cannot afford to wait for certainty…. because doing better today is more important than
doing the best tomorrow." Craig Cox, SWCS, 2006
OEMOffice of Environmental Markets
History of Enterprise Zones
• 1967 Bill introduced by Sen. Robert Kennedy• 1970’s –first zones established in the UK (Peter Hall)• 1980 Federal regs (HUD); 1981 first State EZs• 1993 Federal tax code revisions stimulated additional
push for use of targeted business incentives in US• Over 450 cities and 26 States have EZ policies
OEMOffice of Environmental Markets
Types of Enterprise Zones• Urban enterprise zones – trigger business investment
in blighted or depressed areas• Manufacturing enterprise zones – to group
businesses and enhance job training• Science and Technology Enterprise Zones – Silicon
Valley and Denver Tech Center• Empowerment Zones and Enterprise Communities –
USDA Rural Development – long-term rural sustainability and diversification
OEMOffice of Environmental Markets
Types of Incentives• Highly diverse and sometimes localized• Tax – waivers, credits (capital gains, investment tax
credit, accelerated depreciation, hiring• Financing – low or no interest loans, endowments• Regulatory – licensing requirements, permit
exemptions, streamlining review, alignment of federal, state, and or local.
• Job training and housing subsidies
OEMOffice of Environmental Markets
Environmental Markets can help …
• Reduce overall costs of restoration• Target and prioritize conservation actions• Facilitate private investment• Create business opportunities • Retain working lands by expanding revenue portfolio• Improve accountability by measuring the products of
conservation and restoration
OEMOffice of Environmental Markets
An Eco-Enterprise Zone is….
a designated geographic area where economic growth and ecological restoration are linked through business, community development and conservation incentives.
Target areas with a growing population need for economic development and job creation critical ecological/environmental restoration needs a supportive regulatory environment
OEMOffice of Environmental Markets
Why Eco-Enterprise Zones?
• Stimulate the development of working models for environmental markets
• Restoration and conservation also require business development
• Like business, restoration investments have risk• There is a need for green job creation
OEMOffice of Environmental Markets
Business Infrastructure for Environmental Markets
BuyersBusiness, sewage plants, cities,
developers, private investors
Landowners (Sellers) Aggregator
VerifierThird party Standards
EntityScientists, NGOs,
& government
Trading Platform
Metrics Credit Registry
OEMOffice of Environmental Markets
Eco EZ Approaches
Tax Incentives
Regulatory Relief
Financing Incentives
Job and practice
Incentives
Environmental Markets
OEMOffice of Environmental Markets
Elements of an Eco-Enterprise program
• Grants to coordinate comprehensive land use and watershed planning with state and federal programs
• Tax credits for business development in Eco-Enterprise Zones• Development of ecosystem services markets providing additional
revenues for local land owners.• Targeted incentives for green job creation and job training• New business tax credits and no interest loans for green
industries that create jobs • Support for community education and sustainability • Support for environmental market design and infrastructure
operation.
OEMOffice of Environmental Markets
Benefits of Eco-Enterprise Zone Concept
• Accelerate testing of environmental market principles• Economic benefits accrue in the same locality as
ecological improvement. • Local businesses pursue triple bottom line• Ecological improvement linked to community well-
being and stability. • Business incentives tied to investments in land
stewardship and ecological health.
Slide 14
OEMOffice of Environmental Markets
Experimental Program: Eco-Enterprise Zones would be selected through a competitive process Criteria for selection could include an ability to:
• use a multi-credit approach to ecosystem services; • deliver strong local alliances with capacity for action; • create new investments in conservation; • engage local regulatory governance; • define operational systems that connect providers and beneficiaries;• deliver revenue directly to private landowners;• have capacity to restore/conserve ecosystems and measure progress.
Implementation would consist of a dedicated 5 year commitment of technical and financial assistance investments, tax incentives, and regulatory relief.
OEMOffice of Environmental Markets
Eco-nomics 101• Jobs from Watershed Restoration
– University of Oregon study (2010) - 16-24 jobs per $M spent ($1 generated $2.40 in local spending)
– Humbolt University, CA study (2010) - 20 jobs per $1 million spent
– University of Massachusetts – ARRA Study –Highest number of jobs created from natural resource conservation and forestry – 2- 40 jobs per $M spent
• Freshwater Trust – restoring 30,000 miles of stream would cost $1.5 billion but create 28,000+ jobs and $3 billion in local spending
OEMOffice of Environmental Markets
OEMOffice of Environmental Markets