Free Market Environmentalism: Using Land-Based Conservation Easements as a Model for Marine Conservation Easements

Posted By on Aug 1, 2013 | 2 comments

By: Daniel Zummo

1.      Introduction

One of the newest instruments used by environmentalists to protect land in the United States is the conservation easement.  Easements have been instrumental in preserving rural and agricultural landscapes, from family farms to working ranches and timberlands. Between 1992 and 1997, more than 11 million acres of rural land in the United States was converted to developed use — an area five times the size of Yellowstone National Park.[1] The conservation easement was created as a way to compensate landowners for restricting the use and development of their property and help stop the flood of development in rural America.

In the marine context, conservation easements can be used as restrictive covenants that tie to the fishing permit/license and its subsequent holders.  Just like the land-based conservation easement, the marine conservation easement will compensate the permit/license holder for the restrictive use of their permit/license.

This article will be broken into two parts: 1) An Overview of Land-Based Conservation Easements; and 2) Applying the Tenets of Land-Based Conservation Easements to create Marine-Based Conservation Easements.

2.      An Overview of Land-Based Conservation Easements

Land-based conservation easements are seen to be one of the most powerful and effective tools available for the conservation of private lands. Their use has successfully protected millions of acres of wildlife habitat and open space, and hundreds of miles of rivers, all while keeping property in private hands and generating significant public benefits.[2]  The National Conservation Easement Database (NCED) estimates that there is 40 million acres of conservation easement protected land in the United States.[3] Landowners grant conservation easements because they want to protect their property from unwanted development, but they also wish to retain ownership of their land. By granting a conservation easement, a landowner can assure that the property will be protected forever, regardless of who owns the land in the future.

An additional benefit to the landowner in granting a conservation easement is that the easement can be custom tailored to allow the landowner to still carry on specified activities.  The activities allowed by a conservation easement depend on the landowner’s wishes and the characteristics of the property. In some instances, no further development is allowed on the land. In other circumstances, some additional development is allowed, but the amount and type of development is less than would otherwise be allowed under state land use restrictions. Conservation easements may also be designed to cover all or only a portion of a property. The flexibility of the conservation easement document is what makes easements highly desirable to landowners and conservation organizations.

Finally, even though some easement donors may be primarily or even solely motivated by selfish factors, such as the desire to obtain tax benefits or establish memorials to themselves or their families, this ulterior motive should be immaterial to the question of whether the donation is considered “charitable” for the purposes of the law.[4] The only question courts generally ask is whether the gift advances the public interest in some substantial way.[5]  The Supreme Court of Pennsylvania explained the reason for this rule in 1888:

      “There is ostentation in giving, as well as in the other transaction of life. In some instances donations to public charities may be in part due to this cause; in others, there may be the expectation of indirect pecuniary gain or return. . . . It would be as vain as it would be unprofitable for a human tribunal to speculate upon the motives of men in such cases. Nor is it necessary for any legal purpose. The money which is selfishly given to public charity does as much good as that which is contributed from a higher motive, and in a legal sense the donor must have equal credit therefore. We must look elsewhere for a definition of a legal public charity.”[6]

To qualify for a deduction, the landowner must meet the “conservation purposes” tests: protecting property for public outdoor recreation and education, protecting significant wildlife habitat, protecting certain qualifying open space, or protecting historic property.[7] Once that has been established and the landowner has protected some important conservation values, then the landowner gets an income tax deduction for the value of the donated property.[8]

3.      Applying the Tenets of Land-Based Conservation Easements to create Marine-Based Conservation Easements

Marine Conservation Easement (MCE) is a term that is used to describe legally binding agreements between commercial fishermen (grantors) and conservation NGOs (grantees) that amend certain fishing practices in exchange for payment.[9] The foremost difference between land-based conservation easements and marine-based conservation easements is that no one person or entity owns the ocean, while this is not the case in relation to land.[10] This is a major obstacle in creating a MCE because conservation NGOs do not have an owner to negotiate with.  However, many regulation schemes pertaining to fishery management create a property right to use the habitat in various ways and at specific times and places in the form of ITQs.  It is with this property right holder that a conservation NGO will have the ability to negotiate with in order to form a MCE.

There has been a growing concern for the dwindling of fish stock, triggered by the advancement in fishing technology and the impact of climate change. A MCE could be the next logical step for parties that are interested in conserving fish stock.  The grantor may retain the right to harvest target species as regulated by law, but agree to amend the methods of fishing for the benefit of non-commercial stocks and habitats in exchange for payment from a conservation entity.

Importantly, for the marine easement to be effective, it must encumber the commercial permit, and thus, remain binding when the permit is transferred to another fisherman.[11] This is currently the biggest obstacle to effective MCEs.  Unlike their land-based cousins, MCEs do not have a recording system that would have the capability of enforcing the easement on the owner of the encumbered permit/license. Without the ability to enforce the easement on a subsequent permit holder, the MCE mechanism will likely fail in the marine context.  Simply by creating an effective recording system for MCEs this problem could be overcome.

4.      Conclusion

The MCE concept is analogous in many respects to conservation easements over land.[12] The key difference in the marine context is the absence of property rights to marine habitats; there is no outright owner with whom a conservation NGO can negotiate. However, the regulatory policy in place to manage a fishery typically establishes property rights to use the habitat in various ways, and at specific times and places. An agreement by these rights holders to restrict their actions in specified ways, in exchange for compensation, would constitute a marine easement. The nature and extent of use rights established by existing fishery regulations is, therefore, a key consideration in the efficacy of the marine easement approach to management.  With the additional step of creating a recording system for MCEs, this conservation tool could likely be a step forward for free market environmentalists.[13]

[1] “New Acres of Developed Land in Metropolitan Areas, 1992-1997.” USDA, NRCS. Web. 13 Dec. ‎‎2000.


[4] Scheidelman v. C.I.R., 682 F.3d 189 (2d Cir. 2012)

[5] Id.

[6] Fire Ins. Patrol v. Boyd, 15 A. 553, 554-55 (Pa. 1888)

[7] Stephen J. Small, Real Estate Developers and Conservation Easements – Not as Simple as it Sounds, Prob. & Prop., May/June 2005, at 24.

[8] Id.

[9] Jessica Garrett, Looking Outward, Oceans Ahoy: TNC’s Marine Program Charts a Map for Conservation, THE NATURE CONSERVANCY, South Carolina Update (Spring 2013), at 3.

[10] Robert T. Deacon and Dominic P. Parker, Encumbering harvest rights to protect marine environments: a model of marine conservation easements, THE AUSTRALIAN JOURNAL OF AGRICULTURAL AND RESOURCE ECONOMICS, 53, at 38

[11] Gary D. Libecap, The tragedy of the commons: property rights and markets as solutions to resource and environmental problems, THE AUSTRALIAN JOURNAL OF AGRICULTURAL AND RESOURCE ECONOMICS, 53, at 138-39

[12] Supra, note 10

[13] For more information on this topic, please read the forthcoming paper titled, “Marine Conservation Easements: A Legal Overview” by Adam Soliman and Daniel Zummo