Background:

Generally speaking, a conservation market is a program that facilitates payments to landowners for environmental improvements. The theory behind conservation markets is that regulatory requirements can be met by paying landowners for conservation projects. Conservation markets are also known as ecosystem service markets, conservation and mitigation banks, and water quality trading programs.

In 2008 the State Conservation Commission (Commission) was directed by the Legislature to conduct a study on the feasibility and desirability of establishing farm and forestry-based conservation markets in Washington. To carry out this study, the Commission was given the authority to enter into a contract with an entity that has knowledge and experience in agriculture and conservation markets. The study required the Commission to:

evaluate agricultural conservation markets operating in other states;
collaborate with farm and small forest landowners' organizations and agricultural special purpose districts to assess market-ready products;
identify opportunities for conservation markets that could provide ongoing revenue to farm and small forestry operations to improve their long-term viability; and
work with public agencies to determine potential demand.

The Commission was to present its findings and recommendations by December 1, 2008. If the study determined that conservation markets were feasible and desirable, the Commission was to conduct two demonstration projects. In its official report, the Commission found that pilot projects were warranted and that the Commission, together with the Department of Natural Resources, should lead efforts to identify and pursue projects in farm and forest communities. The Commission recommended that particular attention should be focused on pilots that could demonstrate the potential of greenhouse gas and water quality markets. The pilot projects were not completed.

Summary:

The Commission, in partnership with the Department of Ecology (Department), is directed to build upon the conservation market report it delivered to the Legislature in 2009 and further explore whether there are a sufficient number of potential buyers and sellers for a water quality trading program to be successful in watersheds where total maximum daily loads have been established. The assessment must be conducted in coordination with other interested entities.

The final report must be delivered to the Legislature by October 31, 2017. Prior to issuing the report, the Commission must ensure that the Department concurs with its determinations.

Votes on Final Passage:

House	93	5
Senate	49	0