Market-Based Instruments & the Alberta Land Stewardship Act

Market-Based Instruments & the Alberta Land Stewardship Act

Market-Based Instruments & the Alberta Land Stewardship Act

 

The ELC is publishing a series of four volumes concerning Market-Based Instruments & the Alberta Land Stewardship Act.  This work is to encourage the use of MBIs in a way that benefits the environment and to identify what regulations or other legal changes are necessary to do so.

The Environmental Law Centre has undertaken this project to review the market based instruments (MBIs) that are enabled by the Alberta Land Stewardship Act (ALSA). Our goal in this project is to encourage the use of MBIs in a way that benefits the environment and to identify what regulations or other legal changes are necessary to do so.

The results of this project are published as a report in four volumes:

Volume 1: An Introduction to Market-Based Instruments & the Alberta Land Stewardship Act

Volume 2: Transfer of Development Credits under the Alberta Land Stewardship Act

Volume 3: Conservation Offsets under the Alberta Land Stewardship Act

Volume 4: Stewardship Units & the Exchange under the Alberta Land Stewardship Act

 

This report defines MBIs as a form of regulation albeit different from conventional command and control regulation.  As generally believed, ALSA has significant potential to advance use of MBIs. In ALSA, MBIs are placed within a comprehensive suite of conservation tools that include options for voluntary or coerced conservation and which make tools available for public and private lands.  Because these conservation tools have similar purposes, this should allow them to work together such that the protective tools secure the conservation outcomes of the MBIs.

While ALSA provides a broad mandate to develop MBIs, this report focuses on those MBIs that are specifically provided for by ALSA. These are:

  • Transfer of Development Credits (TDCs), a tool used primarily by municipalities to redirect future development.
  • Conservation Offsets which involve actions to compensate for the ecological impacts of development.
  • Stewardship Units and the Exchange which could be understood as credits and the trading platform that could help facilitate TDCs and offsets.

 

All of these specific ALSA tools can be considered true “market” instruments in that all involve buying, selling or trading between private parties rather than simply the provision of financial incentives for environmentally beneficial behaviour.

This report proposes and applies three major criteria for the assessment of MBIs under ALSA.  These criteria are the need for:

  • guiding environmental principles;
  • sufficient resolution of property law issues; and
  • a strong regulatory framework.

 

These criteria are applied both to the general scheme of ALSA and to the specific MBIs contemplated by ALSA.

Upon analyzing the general scheme of ALSA in light of these criteria, several conclusions can be made:

  • ALSA is significant for recognizing principles of sustainable development and cumulative effects management that are lacking in other provincial land and resource legislation.
  • ALSA’s potential adverse effect on property rights is likely overstated. ALSA largely provides purpose for use of pre-existing regulatory authority and it may have some impact on the existing property rights regime by offering compensation for regulatory action and incentives for voluntary private conservation.
  • ALSA provides multiple options to strengthen the regulatory framework for MBIs through regional plans or regulations of general application. Regional plans have more ability to overcome systemic barriers to MBI use created by the larger framework for regulation of land and natural resources, while regulations of general application are more suited where the need is for principles and rules of general application.

 

However, in other ways, ALSA is an imperfect platform for MBIs:

  • ALSA does not ensure a principled approach to MBIs. Sustainable development and cumulative effects have proven hard to operationalize through regulatory decisions without more specific sub-principles.  ALSA leaves need to rely on other legislation for principles of pollution prevention and polluter pay, and it continues trends of restrictive public participation and no precautionary principle under provincial legislation.
  • ALSA does not provide a private conservation tool for public lands or recognize property interests that could protect private conservation against minerals activity.  ALSA also leaves uncertainty around compensation for regulatory restrictions on property interests or property values.

 

In addition, while designed to implement the Land Use Framework (LUF), ALSA does not fully address all the policy gaps identified in the LUF nor does it fully implement all the strategies proposed by the LUF.   ALSA also fails to directly fill the policy gaps which with MBIs might help.

There are some universal considerations respecting the regulatory framework for MBIs under ALSA:

  • The legal effect of ALSA depends almost entirely on future regulations or regional plans for which ALSA provides Cabinet with broad discretion and little substantive guidance.
  • ALSA is not a platform for development approvals that would be conditional on conservation, so there is ongoing need for the other land and resource legislation.
  • ALSA was not necessarily needed for the MBIs in question, as authority to establish simple TDCs likely existed under the MGA and authority to require offsets on regulatory approvals exists under multiple other provincial statutes.  The main need from ALSA was (and remains) guidance for use of these tools.
  • ALSA does not clearly require legal securement of conservation activities related to TDCs, offsets or the recognition of Stewardship Units.

 

To date, ALSA has been primarily used for its regional planning provisions.  Several needs can be identified from that experience:  clear objectives, regulatory limits on the impact of activities, coordination of multiple uses, stronger direction to regulators, legal protection of identified conservation areas, and more attention to administrative functions.  These motherhood issues with ALSA may become even more important if ALSA is to regulate the implementation of MBIs in Alberta.

General Recommendations

  1. Adopt the precautionary principle in any policies, regional plans or regulations that could provide direction on the use of MBIs, especially the biodiversity frameworks.
  2. Formalize public and stakeholder participation in the development and implementation of MBIs.
  3. Protect private conservation activity carried out in pursuit of public policy objectives from the impacts of minerals activity, beginning with Conservation Easements.
  4. Clarify and require legal securement tools for all conservation activities related to MBIs.
  5. Explore direct use of regional plans and Conservation Directives as means to designate and protect conservation areas associated with MBIs.

 

The results of this project are published as a report in four volumes, which you can download:

Volume 1: An Introduction to Market-Based Instruments & the Alberta Land Stewardship Act

Volume 2: Transfer of Development Credits under the Alberta Land Stewardship Act

Volume 3: Conservation Offsets under the Alberta Land Stewardship Act

Volume 4: Stewardship Units & the Exchange under the Alberta Land Stewardship Act

 

The Environmental Law Centre wishes to thanks the members of our advisory committee – Guy Greenway, Dave Poulton, Marian Weber and others – for their valuable contribution of time and expertise.  All opinions, interpretations, and conclusions in this report are the product of the ELC.

The Environmental Law Centre would like to thank our supporters, who prefer to remain anonymous, that have made this project possible.

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