Changing the incentive system is not difficult

A space preserving incentive system is not difficult to implement because there are predecessor systems already in place that support conservation of other resources—wetlands, habitat for threatened and endangered species, and restraints on carbon emissions, for example. Mitigation banks allow an asset loss in one place to be offset by a gain in another, facilitated through financial transactions. Among other things, mitigation banking allows free markets to establish the value of resources.

Three interlocking pieces

Measuring space

Essential to everything is establishment of a standard and broadly accepted way to measure space. The space measurement presented here (see Measuring Space II) adequately and straightforwardly measures spaciousness, in a way that reflects both area and uninterrupted distance.1

Space credits

Measurement of space newly preserved by conservation easement, and of space lost to development, allows for the balancing of space conservation and space loss. Space measurements are converted into space credits that are bought and sold in a free market environment.

One regulation

Only one regulation is needed. Any development that will cause space loss cannot proceed without ownership of space credits—typically placed in an escrow account. At conclusion of development or a phase of development, the space lost in development is measured and space credits are relinquished (destroyed) in a compensation ratio to the space that has been lost.Manipulation of the compensation ratio allows for a specific fraction of the total available space resource to be protected.3

Essentials of the Space Preservation System

The diagram to the left shows the three essential parts of a space preservation system:
1. Permanent protection of space by conservation easement.
2. Measurement of space protected and space lost to development.
3.  Creation of space credits, purchase of credits by developer(s), and relinquishment of credits at conclusion of development (or a phase of development).

Implementation of this system requires many elements that are not depicted, for example:

  • A space mitigation bank that facilitates buying and selling of space credits, and whose operations determine the price of space credits (i.e., the value of space).
  • Official standards for space measurement and accreditation of parties qualified to make space measurements.
  • An accounting system for registration of space credits and space credit ownership, similar to systems used to track real estate ownership.

For a more detailed picture, see Some Implementation Details.

Read more…

Some Implementation Details
There are multiple institutional and procedural connections among the essential parts of the space preserving financial system.
 Measuring Space I and Measuring Space II
Space measurement is at the core of our space preservation strategy and system. These pages explain how NOT to measure space and how TO measure space.
Mitigation Banking
Mitigation banks help those who protect space and also  those who cause space loss, by converting space transactions into financial transactions.
1 Different settings require different foils for space calculations. See Measuring Space II for a discussion of foils used in space calculations.
2 Institutions and processes are required for validating and registering space credits (much the same as real estate titles are registered with county authorities in the United States), and for invalidating space credits that are relinquished in exchange for space lost in development.
3 The compensation ratio establishes the ultimate condition, when all land has been either developed or protected. A 1:1 ratio causes half of remaining space within the bank’s service area to be protected. A 2:1 ratio (space credits : space loss) causes 2/3 of the space to be protected (2 cubic kilometers protected, 1 cubic kilometer lost to development, 3 total cubic kilometers).