The May 13 noon lecture at the Smithsonian’s Tupper Auditorium was unusual in a couple of respects. First, it was by an economist and the social sciences don’t usually figure in these weekly free science talks. Second, some environmental activists who rarely show up for the Smithsonian lectures bolstered the usual crowd of students and professors who attend these affairs.

Dr. Richard E. Rice, the chief economist for the Center for Applied Biodiversity Science, talked about what in retrospect ought to have been an obvious response to an aspect of what critics like to denigrate as “corporate welfare.” The complaint is that, through slick lobbying, outright bribery, communities’ desperate poverty or nations’ inept government, corporations get natural resource extraction concessions at very low prices, then play havoc with the environment in and around the areas they rent for logging, oil drilling, mining or other such ventures. The response that Rice discussed was the “conservation incentive agreement,” wherein an environmental group takes advantage of the low prices and bids against companies to win resource concessions, then pays local communities or nations to keep the concession areas in pretty much their natural states.

“A conservation incentive agreement is simply a means to compensate resource owners for conservation,” Rice explained. It short-circuits the cumbersome political processes of creating national parks or government wildlife reserves. It’s as applicable to private or collectively held indigenous lands as to areas owned by national governments. It makes communities that might otherwise see logging or strip mining as their only economic possibility consider the direct and immediate cash benefits of conservation. Because it operates more like a lease than a purchase, it conserves a nation's sovereignty when it concerns public land. “It’s a very, very flexible tool that can be applied in different situations,” Rice said.

He helped negotiate Conservation International’s first major agreement of this type, a 30-year timber concession over 80,000 hectares in southern Guyana. It all began three years ago, when he was studying the economics of logging in the area. Guyana was getting a pittance from the logging companies, so “on a lark” the environmentalists asked if they could bid. “The government immediately said yes,” Conservation International won the bid and then some of the loggers in adjacent concessions offered to sell their concessions to the conservationists. The stereotype of huge greedy corporations reaping mega-profits from raping the land, Rice explained, quite frequently doesn’t accurately describe for-profit logging operations, many of which are barely scraping by.

Conservation International’s deal with Guyana is that the land WON’T be logged or stripped, and if it is the group’s payments will stop. With modern satellite technology, it’s easy and relatively cheap to monitor compliance. In this way, Rice said, “park creation can be made a lot more like a standard business transaction.”

Since the Guyana transaction, Rice has taken part in the negotiation of other conservation incentive agreements, which are somewhat analogous to the conservation easements known in US law, in Guatemala and Peru, and talks are going on in other tropical countries of the Old and New Worlds.

But might loggers just up their bids, or might political processes come to bear? Rice allows for these possibilities, especially where the value of a resource concession grossly exceeds its price, the price exceeds what environmentalists can afford to pay and reasonably defray through alternative economic activities, or where the government is hostile.

“We had kind of a melt-down in Guatemala,” Rice noted. “We had strong community support,” he said, but wealthy and powerful interests brought pressure to bear and the national government disapproved the project. Well, of course. What does community support mean in a country where during the days when the head of the legislature was dictator whole villages were razed, with all of their inhabitants massacred except maybe for a few babies who were saved for sale to the international adoption industry?

But then Conservation International had more success in Bolivia, where they bought the interest of a logging concern that had a concession set in the middle of a national park. “We got an area the size of Rhode Island for less than the price of a house in my neighborhood,” Rice said.

“There’s a continuum” to the price of conservation incentive agreements, Rice admitted. It’s very cheap in Bolivia, very expensive in the California headwaters, and probably somewhere in between in Panama. (If it’s possible to bid in Panama, where a large part of the art of bid-rigging is the drafting of qualifications to submit bids that effectively steer contracts and resources in the directions desired by the politicians.) “If there’s an acceptable deal you do it. If not, you go somewhere else,” Rice concluded.

The economist admits that as these agreements expire, the trees that have been protected will be decades older, larger and more valuable. That's likely to increase the cost of renewing concessions. However, if tourism or other low-impact industries can thrive during the original concession, the people who make their livings that way may add to the pro-conservation side of the political-economic equation.

And what about the tendency of rich and poor alike to grab land in a place like Panama? Rice noted that even when land invasions are part of a culture, a first wave of land invaders is often eager to conserve an area’s resources from the next group of would-be squatters, so sometimes deals can be struck in situations where it might seem unlikely.

And what about sticky-fingered government officials? That can be a problem, but Rice said that so far the experience is that money paid for conservation incentive agreements is more likely to get past the bureaucrats and kleptocrats and into the hands of local people than is typically the case with payments for resource extraction concessions.

Finally, to play this game environmentalists must have money to bid. At the moment Conservation International is backed by a big grant from Gordon Moore, the founder of INTEL. Rice is optimistic that as the idea catches on, it will become easy to raise funds to buy resource concessions.

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