In the process, bankers take on all ecological, legal, and financial responsibilities. In the HCB framework, landowners/bankers generate ‘credits’ that can then be sold to developers required by regulation to mitigate adverse impacts on listed species. HCBs are similar to wetland mitigation banks but differ in terms of legislative instruments, policy frameworks, and agencies in charge of implementation. HCBs are permanently protected lands managed for endangered species and their habitat. The findings are helpful in identifying lands and prioritizing investments to generate conservation credits. This could build confidence on those who may have been discouraged from lack of knowledge and fear of losing revenue due to regulatory compliance to conserve endangered species habitat in their land. A right selection of space (land acquisition costs can make or break finances for HCB) and species could encourage landowners to establish HCBs. But there is not enough evidence to ascertain financial certainty from their revenues. On the brighter side, the number of HCBs has increased with time. With the inclusion of land acquisition costs, three of eight HCBs performed financially well. However, only 14 HCBs out of 26 produced a positive return. The average NPV for 26 HCBs was $4205.90/acre at a 4% rate of return, indicating an overall positive return from such an easement instrument. The average annual cost of operating HCBs was $42.78/acre (median: $22.58/acre), and the average credit price or revenue from credit sale was $6014.72/acre (median: $553.65/acre). We do so by compiling the cost and revenue data for habitat conservation banks.
This paper evaluates 26 habitat conservation banks (HCB) in California by calculating their Net Present Values (NPV). A financial analysis of habitat conservation banks (HCB) informs policymakers and conservation biologists of the long-term success of this policy and the future of HCBs.
This policy instrument aims to protect habitat, but little or no thought has been given to its financial performance. Habitat conservation banking is a policy instrument for conserving endangered species by providing financial incentives for the landowners in the United States.
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