A quick primer on NACs - The new Green Decoys.

[44hunter45]

Yes. I know there is a paywall. I was able to read the whole article.
Educational. I got enough from it that I want to learn more about it. There is a lot to digest in this.
Hopefully this thread won't turn into a lock in 5.

Conservation opponents have a new boogeyman: Natural Asset Companies

Never let the facts get in the way of the monster under your bed

medium.com

 

[jryoung]

Here's the article (1 of 2):

America’s most notorious conservation opponents have launched an all-out assault on an emerging mechanism to restore and protect nature, and in the process, have scared themselves into a brand new conspiracy theory that tries to tie Wall Street investors to the Interior department and America’s public lands. The reality is far more mundane and reveals what the anti-conservation crowd is actually afraid of.

What’s the conspiracy theory?​

As with most conspiracy theories, this one starts with a grain of truth: the Securities and Exchange Commission is considering a proposal from the New York Stock Exchange to list a new kind of corporation, the Natural Asset Company. NACs were proposed in 2021 by the Intrinsic Exchange Group as a way for investors to put money behind natural areas, working lands, and ecosystem restoration. NACs would put a value not just on the products or resources extracted from the land, but on the land itself, and the services those ecosystems provide to the entire world — like clean air, water, habitat, and carbon storage. Investors would be able to trade shares in NACs like other stocks and bonds. (We’ll get to the economic theory behind all this in a moment.)

Where Wall Street sees an investment opportunity, conservation opponents have invented a 21st century Red Scare, warning that NACs will lead to America’s public lands being sold to China. The opposition to NACs has been led by one of the most vocal anti-conservation conspiracy groups, American Stewards of Liberty, which has been rallying its followers for weeks to oppose the SEC proposal.

This month, the conspiracy theory broke out of this far-right echo chamber and into mainstream publications. In the Grand Junction Daily Sentinel, a guest writer claimed that the SEC rule would “sell off management of our public lands, including national parks.” A RV enthusiast blog warned that the SEC and BLM were “maneuvering to sell off public lands.”

Now the GOP establishment is buying into the conspiracy theory as well and, in the process, drawing an imaginary connection to a completely unrelated proposal from the Interior department, the Bureau of Land Management’s Conservation and Landscape Health Rule.

This week, 25 Republican attorneys general sent a letter to the SEC not just opposing the listing of NACs, but claiming, without evidence, that NACs are “intended to serve as the funding mechanism” for the new BLM rule. The AGs believe that the SEC’s proposal “is part of an interlocking scheme designed to facilitate another agency’s violation of the law” — a baffling claim considering that the BLM’s rule hasn’t been finalized yet.

The AG letter was followed on Thursday by a fishing expedition from Republicans on the House Natural Resources Committee demanding documents from the SEC about the NAC proposal, saying that it “may prove calamitous to the statutory multiple-use mandates of federal lands,” and allow “foreign interests to fund companies that will control public land.”

All of this is nonsense.

What’s actually happening here?​

As the Center for Western Priorities has explained over and over again, the BLM public lands rule would not sell off public lands. Indeed, the agency has no authority to sell or transfer land without congressional approval. The rule would merely clarify how land managers can use the agency’s existing leasing authority to restore degraded lands as part of the BLM’s multiple-use mandate. Multiple law professors have explained how the proposed rule is consistent with federal law.

All public lands leases are limited in time and scope, and restoration leases, as envisioned by the BLM proposal, would have to come with clear goals for measuring the health of the land to ensure future generations will be able to enjoy those lands. For example, a mining company could propose a restoration lease on lands that were degraded by previous mining operations as a way to offset the damages caused by building a new mine on public lands. Or a community group could raise money to restore lands damaged by wildfire or overgrazing, creating new recreation opportunities that would not have been possible given BLM’s limited funding.

The BLM’s proposed rule does not mention Natural Asset Companies, nor is there any indication that the agency was even aware of the SEC’s proposal, which was not published until months after BLM had presented its first draft of the conservation rule.

Would Natural Asset Companies propose restoration leases on public lands? It’s hard to say, since NACs don’t exist yet, and the BLM’s final rule hasn’t been published. It’s possible conservation leases wouldn’t be at all interesting to future NACs.

We can confidently say that there is no way for any company or organization to permanently take over public lands. Whether or not NACs exist, all leases on public lands have an expiration date. (Under the “dumpster fire” that is the General Mining Law of 1872, however, hard rock mining claims generally have supremacy over other uses of the land.) BLM’s multiple use mandate, as defined by Congress in 1976, requires the agency to balance all uses of the land, including conservation, recreation, grazing, mining, and drilling. Land managers have broad discretion to reject leasing proposals that aren’t aligned with the agency’s management plans.

If an NAC proposed a restoration lease one day, they would be treated the same as any other oil and gas company, mining corporation, or nonprofit group. And that’s what scares conservation opponents.

​

 

[jryoung]

(2 of 2)

Putting a value on nature​

The idea of Natural Asset Companies is based on the work of economists like Dr. Partha Dasgupta, who led a landmark report on biodiversity and economics that was commissioned by British prime minister Boris Johnson and released in 2021. This short video from the New York Times does an excellent job simplifying a complicated concept:

As narrator Alexander Skarsgard says in the video, “When we buy a burger, we’re not paying for the value of the land that got polluted by the cows’ s***. When we buy orange juice, we’re not paying for the value of the pollinators that died from all of those pesticides.”

“We are making a mess of our own lives. So therefore, we ought now to start paying for it,” Dr. Dasgupta explains.

Until now, mainstream economics has only placed value on what we extract from nature. The Dasgupta report and subsequent proposals like Natural Asset Companies provide a way to put an economic value on nature itself, using the tools that already exist in modern accounting. And if your business is based entirely on extracting value from the land, it’s threatening when someone suggests that there could be more economic benefit in leaving the land intact. It’s even more threatening when the New York Stock Exchange proposes letting companies raise capital based on the value of those intact landscapes.

(Conspiracy theories aside, there’s rich irony in the fact that the opponents of the SEC plan profess to be followers of the free market who, until recently, claimed that businesses could be trusted to be the most responsible stewards of American lands. Many of the voices who are now raising the specter of private ownership of national parks were, until this month, the loudest proponents for disposing of national public lands.)

Follow the money​

The 25 signers of the state attorneys general letter to the SEC are all members of the Republican Attorneys General Association, a right-wing political group that Politico described as “the weapons division of the GOP.” Three years ago, RAGA’s nonprofit arm even paid for a robocall promoting the “stop the steal” march on January 6.

Perhaps unsurprisingly, RAGA is funded by oil and gas companies, mining companies, and trade associations, including ExxonMobil, ConocoPhillips, the American Petroleum Institute, Alpha Natural Resources, and Devon Energy — all major users of public lands that rely on extracting publicly-owned resources. Those same industries are also major donors to members of the House Natural Resources Committee who are sending document requests to the SEC looking for signs of a connection that does not exist.

The prospect of Wall Street acknowledging that land can have economic value beyond drilled oil or harvested timber could be seen as a fundamental threat to the way RAGA’s donors do business. If oil companies were to account for the damage their product causes to ecosystems and the Earth’s climate, it would undoubtedly do significant damage to their balance sheets.

The BLM’s proposed conservation rule has nothing to do with this theoretical accounting future. It just happens to be moving through the regulatory process at the same time that Wall Street is considering letting some companies voluntarily account for the value of nature. But that alone is enough of a threat to the status quo that conservation opponents are willing to invent new conspiracy theories to try to stop it.

 

[brocksw]

My first thought, conspiracies not withstanding, is that a potential NAC may look a lot like American Prairie or PERC? But I wonder if there are any other private sector companies that could also fall under this umbrella that I’m not familiar with? Perhaps even ones we would look more negatively upon?

I do find myself wondering, is there a risk that a anti/non-hunting organization could form a NAC, and then through large public investment, acquire large amounts of land and turn off hunting through a preservation or species recovery umbrella? Potentially circumventing any need for an EIS or other management plans that are typically SOP. Could that be forced upon one of these companies after the fact, when someone comes in and buys up a majority share in that company? In that scenario(if possible) it seems to me it’s potentially not that much different than the Wilks buying up land.

I see both positive and negative that could come from this. My way to early take and immediate gut reaction is that I don’t like the idea of shareholders driving the bus when it comes decision making on this stuff though. Seems kind of like a private sector ballot initiative. But I could be wrong or misunderstanding a lot of this.

 

[Big Fin]

I do find myself wondering, is there a risk that a anti/non-hunting organization could form a NAC, and then through large public investment, acquire large amounts of land and turn off hunting through a preservation or species recovery umbrella. Potentially circumventing any need for an EIS or other management plans that are typically SOP. Could that be forced upon one of these companies, after the fact when someone comes in and buys up a majority share in that company? In that scenario(if possible) it seems to me it’s potentially not that much different than the Wilks buying up land.

They could acquire large amounts of private lands, but they would need an act of Congress to acquire public lands. We currently see this happen a ton with private lands. Part of an economic system that allows the exchange of property rights.

Yet, we don't see this acquisition of public lands, as they would need to convince Congress it was a good idea. Leases of Federal lands do not allow the lessee to exclude the public, so the "boogeyman argument" that a lease for conservation values would exclude the public is just that, a boogeyman argument.

The reality is, we don't allow other uses of lands to be considered under the Federal leasing rules, only consumptive uses. Allowing conservation leases would actually place value on the conservation aspects of those lands, forcing land managers to consider how to get the greatest value from our public lands.

It's a hypocritical argument for some who want the status quo that benefits them, but want to complain about the status quo. They complain Federal public lands are poorly managed when compared to State lands that are beholden to Trust duties requiring maximum returns on the State public lands. OK, might be the case. Yet, when a chance comes to get better returns on Federal public lands, the same people who complain about poor land management are the same ones complaining about new ideas that would get better returns on those lands and fund better management.

Why? Because they benefit from, and therefore like, the discounted Federal royalty on O&G. They benefit from, and therefore like, the discounted grazing rates. They benefit from, and therefore like, having almost no mineral royalty rate. They benefit from, and therefore like, the discounted leases for solar and wind farms. They benefit from, and therefore like, (insert here)......

Look at who the opposition is to this and who is funding the narrative to stop conservation values being part of consideration. They aren't know as being real concerned about lands, conservation, or even better returns on Federal public lands. They are all about raising funds for their organization by manufacturing fears.

I'd be interested in hearing honest arguments as to why conservation value shouldn't be one of the assets that could be realized in Federal land leases. Maybe I'm missing it. Some of the economic think tanks have actually floated the idea, though they know the politics around entitlement to preferred status in the use of Federal public lands is very hard to change.

 

[brocksw]

They could acquire large amounts of private lands, but they would need an act of Congress to acquire public lands. We currently see this happen a ton with private lands. Part of an economic system that allows the exchange of property rights.

Yet, we don't see this acquisition of public lands, as they would need to convince Congress it was a good idea. Leases of Federal lands do not allow the lessee to exclude the public, so the "boogeyman argument" that a lease for conservation values would exclude the public is just that, a boogeyman argument.

The reality is, we don't allow other uses of lands to be considered under the Federal leasing rules, only consumptive uses. Allowing conservation leases would actually place value on the conservation aspects of those lands, forcing land managers to consider how to get the greatest value from our public lands.

It's a hypocritical argument for some who want the status quo that benefits them, but want to complain about the status quo. They complain Federal public lands are poorly managed when compared to State lands that are beholden to Trust duties requiring maximum returns on the State public lands. OK, might be the case. Yet, when a chance comes to get better returns on Federal public lands, the same people who complain about poor land management are the same ones complaining about new ideas that would get better returns on those lands and fund better management.

Why? Because they benefit from, and therefore like, the discounted Federal royalty on O&G. They benefit from, and therefore like, the discounted grazing rates. They benefit from, and therefore like, having almost no mineral royalty rate. They benefit from, and therefore like, the discounted leases for solar and wind farms. They benefit from, and therefore like, (insert here)......

Look at who the opposition is to this and who is funding the narrative to stop conservation values being part of consideration. They aren't know as being real concerned about lands, conservation, or even better returns on Federal public lands. They are all about raising funds for their organization by manufacturing fears.

I'd be interested in hearing honest arguments as to why conservation value shouldn't be one of the assets that could be realized in Federal land leases. Maybe I'm missing it. Some of the economic think tanks have actually floated the idea, though they know the politics around entitlement to preferred status in the use of Federal public lands is very hard to change.

Thanks for calling attention to that, Randy. I should’ve specified private lands there, as I’m not concerned about this being responsible for the closure of public.

However, let’s use American Prairie as an example. Say they want to go public, offer an IPO and expand their coffers. Then, through a variety of possibilities, they end up being majority owned by the humane society or *insert similar org here. They decide they are not going to allow hunting, and a lot of the public land they have land locked is now inaccessible. That’s a significant change from the current situation.

Could one apply that same logic to buying a huge chunk of land in say Minnesota to make sure wolves don’t get hunted? Or grizzlies somewhere else? I have no idea how realistic that even is for a concept, so perhaps I’m shooting from the hip and should keep my mouth shut.

I’m also not saying every acre of the continent needs to be open for access so hunters can shoot chit, and I certainly don’t want to come off as a conspiracy theorist. Just trying to apply this to the current landscape and how this new shiny thing could affect current issues. Trying to figure out what’s possible, good and bad, so to speak.

I would agree there is a reason the anti-conservation groups are against this, and that means something. But is it also possible that some of the same folks who could shut them out, could shut out hunters for entirely different reasons under the same umbrella of funding? Again, just thinking out loud.

 

[Straight Arrow]

They are all about raising funds for their organization by manufacturing fears.

Key point and the operative term is "fears". Whether public or private lands subject to this, it is the familiar "boogeyman" generated fear which stokes the conspiracy theory and results in errorneous speculation(s).

 

[Gerald Martin]

Thanks for calling attention to that, Randy. I should’ve specified private lands there, as I’m not as concerned about this being responsible for the closure of public.

However, let’s use American Prairie as an example. Say they want to go public, offer an IPO and expand their coffers. Then, through a variety of possibilities, they end up being majority owned by the humane society or *insert similar org here. They decide they are not going to allow hunting, and a lot of the public land they have land locked is now inaccessible. That’s a significant change from the current situation.

Could one apply that same logic to buying a huge chunk of land in say Minnesota to make sure wolves don’t get hunted? Or grizzlies somewhere else? I have no idea how realistic that even is for a concept, so perhaps I’m shooting from the hip and should keep my mouth shut.

I’m also not saying every acre of the continent needs to be open for access so hunters can shoot chit, and I certainly don’t want to come off as a conspiracy theorist. Just trying to apply this to the current landscape and how this new shiny thing could affect current issues. Trying to figure out what’s possible, good and bad, so to speak.

I would agree there is a reason the anti-conservation groups are against this, and that means something. But is it also possible that some of the same folks who could shut them out, could shut out hunters for entirely different reasons under the same umbrella of funding? Again, just thinking out loud.

I would see the path of progression to hunters being shut out of public lands more likely to come by anti-hunting legislation rather than the scenario you described above.

Without knowing all the details, I find myself favorably inclined to the idea of including a fair market value for conservation to help establish what going rates should be for extractive leases. It could help protect sensitive areas from development for marginal natural resources in some cases.

 

[44hunter45]

Thanks for calling attention to that, Randy. I should’ve specified private lands there, as I’m not as concerned about this being responsible for the closure of public.

However, let’s use American Prairie as an example. Say they want to go public, offer an IPO and expand their coffers. Then, through a variety of possibilities, they end up being majority owned by the humane society or *insert similar org here. They decide they are not going to allow hunting, and a lot of the public land they have land locked is now inaccessible. That’s a significant change from the current situation.

Could one apply that same logic to buying a huge chunk of land in say Minnesota to make sure wolves don’t get hunted? Or grizzlies somewhere else? I have no idea how realistic that even is for a concept, so perhaps I’m shooting from the hip and should keep my mouth shut.

I’m also not saying every acre of the continent needs to be open for access so hunters can shoot chit, and I certainly don’t want to come off as a conspiracy theorist. Just trying to apply this to the current landscape and how this new shiny thing could affect current issues. Trying to figure out what’s possible, good and bad, so to speak.

I would agree there is a reason the anti-conservation groups are against this, and that means something. But is it also possible that some of the same folks who could shut them out, could shut out hunters for entirely different reasons under the same umbrella of funding? Again, just thinking out loud.

Individuals and publicly traded corporations can do this today. They most definitely are doing it. The Nature Conservancy and other NGOs do own deeded land. They allow hunting but only by their access rules. On TNC land you are paired with one of their land stewards to be sure you don't abuse the land or the game. It is their right and more power to them. A day on BLM will show you enough ORV damage to understand why they would want to monitor access. The public are notorious slobs. Too many of those slobs are hunters.

Weyerhauser, PotlatchDeltic, and other publicly traded companies get revenue for access and enforce it. They are either charging permit buyers directly, or being compensated by state agencies to allow access. At $xx per acre enrolled, they make more than selling $80 permits and trying to catch those that cheat. These agreements often come with State LEO patrol and enforcement as well. This program has been a win-win for Idaho hunters, the companies, and the game - IMHO.

Some of the best mule deer hunting in Idaho is gated out by the Wilkes Brothers and other out of state corporations.
I'm not seeing how your concern is any different from what we have today.

If we are going to wave the private property rights banner (which I proudly fly), then we are going to have to accept that the deed holder can do what they want in terms of access.
I think that in the new west, it is the "New Montanans", and "New Idahoans" that are the biggest risk to the loss of historic access. If they hold the deed and an HSUSA membership card, sucks for us.

My concern is that too many hunters do not steward the land but behave in such a way that gates get locked and land gets posted. If all hunters left things better than they found them, there would be no loss of private access. Sadly, that is not the real world.

 

[brocksw]

@Gerald Martin and @44hunter45, those are some good points. Perhaps I’m being too cynical.

 

[44hunter45]

I dabbled in enrolling our property in carbon credit exchanges. 40 acres is just not big enough credit to be viable in the exchange.
In this system, the owner pledges not to log for a certain amount of time. In doing so they have sequestered carbon credits, which can be traded to carbon users to offset their use.

One take away I got from the article is that NACs may work in the same way for extraction companies to practice offsetting.

 

[44hunter45]

 

[SAJ-99]

However, let’s use American Prairie as an example. Say they want to go public, offer an IPO and expand their coffers. Then, through a variety of possibilities, they end up being majority owned by the humane society or *insert similar org here. They decide they are not going to allow hunting, and a lot of the public land they have land locked is now inaccessible. That’s a significant change from the current situation.

Let’s say APR can do just that - go public. What value does the company have? 1) FMV of the real estate and 2) its ability to generate recurring revenue off of that land. That revenue could be beef cattle, vacation yurt rental, carbon credits from sequestration, hunting leases, lease an acre to a cell tower company to put up another tower, or whatever the next idea might be. Whatever they choose, the value of the share has to translate to the company's ability to make positive cash flow. There are rules in the securities market regarding material and passive ownership, but we can ignore those for this exercise. HSUS could buy a large enough share count and maybe get a member on the board and shut down hunting. Absolutely possible. But cutting that revenue decreases the value of the company because it cuts out a revenue stream. This is an expensive end-around to stop hunting. HSUS might as well just buy land itself. We already have a LOT of that happening. Religious orgs are the largest landowning group and their non-profit status gives them an advantage in acquiring the land. This is something you never hear about from people claiming APR's tax status benefits it in buying land.

Edit: APR in non-profit don’t couldn’t do that without converting to for-profit corp,