Nature vs. Profit
Conservation easement study looks to increase benefit for all By Meg Henderson, Photo by David Ammon
rotecting and profiting from natural resources does not have to be an eitheror choice. A Mississippi State professor in the College of Forest Resources believes learning from past and present conservation easements can guide improvements for future agreements that will work more favorably for all involved. Changyou “Edwin” Sun, a George L. Switzer Professor of Forestry, has received a $600,000 USDA Agriculture and Food Research Initiative grant for his study of conservation easements. Collaborating with two economists and a law professor from the University of Georgia, Sun and the research team will scrutinize the legal and economic ramifications of restricting property rights on actively managed forests through conservation easements. A conservation easement is a voluntary, legal agreement between a landowner and a land trust or government agency designed to achieve environmental conservation goals by permanently restricting how the owner may use the land. “The major motivations for each stakeholder are different, but they come together to reach an agreement,” Sun said. “For landowners, a conservation easement can provide direct payment or tax benefits. To a conservation institute or government agency, these agreements foster non-market outputs such as carbon sequestration, water conservation or wildlife protection.” For the last three decades, conservation easements have become an innovative, effective, and sometimes controversial, instrument to protect forestland held by private owners. As of 2015, about 1.75%, or 13 million acres, of all forestlands in the U.S. was permanently protected under a conservation easement. Sun estimates the current number to be about 2%. In Mississippi, nearly 400,000 acres are protected under various conservation easements. That acreage amounts to just over 1% of total land area in the state.
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Sun found that past studies have not fully addressed some important economic questions. They have paid little attention to the unique features of working forests, especially irregular and uncertain timber revenues from multiple growth cycles. Likewise, the body of research on conservation easements from a legal standpoint has much room to expand. “The practice of conservation easements has been in place for the last 30 years,” Sun said. “However, studies on the economics
"For landowners, a conservation easement can provide direct payment or tax benefits. To a conservation institute or government agency, these agreements foster non-market outputs such as carbon sequestration, water conservation or wildlife protection." ~ Changyou Sun have lagged behind. That’s why we want to do more research.” MSU’s Forest and Wildlife Research Center, of which Sun is a part, will analyze disputes between landowners and nongovernmental organizations, also known as NGOs. With over 500 legal cases averaging 30 pages per case, there is an extensive amount of existing material to study. Sun and his team will use computational content analysis and manual summarization to identify common legal doctrines in these cases. “While the percentage of legal disputes over conservation easements is small, they still number in the thousands,” Sun said. “We want to determine what has changed in the landowner-agency relationship and how these disputes have been resolved over time.
Computers may not be as accurate as human analysts, but they can deal with large amounts of information.” In addition to examining legal cases, the team will develop a theoretical framework to evaluate the optimal contract length for a geographical region, considering uncertainties in the production of timber and environmental services. “Conservation easements are usually permanent agreements, but a shorter contract may be better for some landowners,” he said. “If it creates difficulty for the future landowner 50 or 80 years later, why not have a termed agreement? We are trying to analyze that to see what is better for stakeholders.” In some cases, perhaps shorter contracts with a greater number of landowners are more beneficial to the environment than a smaller number of permanent contracts. Sun noted, for instance, that newer growth forests sequester more carbon than older growth forests, and newly planted grasses prevent soil erosion better than grasses older than five years. In addition to examining the legal landscape of conservation easements, the team will, using economic models, assess their impact on forest management. Finally, the researchers will examine how conservation easements affect a region economically, looking at the direct and ripple effects of tax incentives and land value of encumbered and adjacent properties. The study’s findings will help the team make recommendations to improve management of existing easement contracts and design of future conservation easements. “Providing better information upfront will prevent pitfalls in these relationships and, consequently, lawsuits down the road,” Sun noted. “We anticipate the application of this knowledge will improve solutions to support forest landowners, improving both environmental conservation and the sustainable growth of forest and rural communities.” n