Development and resource extraction projects invade open space and, therefore, diminish space. Suppose that regulations place responsibility for compensating preservation of space directly on a project owner or manager (generically, a developer). Then the developer would have to either (a) purchase a larger tract of land and place a conservation easement on part of the expanded holding; or (b) establish conservation easements nearby, on other land. In either case, this is a substantial administrative burden.
In the system that we envision, a developer simply purchases space credits to satisfy the requirement for compensating space preservation. While this represents a financial cost to the developer, there is no reason to think that the cost in a space-market system should be higher than the cost in a parcel-by-parcel system—and the developer’s administrative cost is far lower. Developers typically are specialists, and their business is not to hunt down land owners who would be willing to have conservation easements on their lands, negotiate easement terms and prices with them, and so on. A space-market system moves these burdens to other organizations, which may be public, private, or a combination that works in that particular area.
|A Space Market
A space market trades in space credits, which quantitatively represent preserved space. Space credits are created when space is preserved and are destroyed (relinquished) when space is filled by invasion.
|Markets and Prices
A space market assures that supply and demand establish a fair price for space. Developers who acquire, and later relinquish, space credits can be assured that they are not paying more for the preservation of compensating space than anyone else.