Environmental Economics and Finance

As efforts to restore the Chesapeake Bay increasingly move from planning to implementation, the issue of environmental finance and “how to pay” become more and more central.

Maryland Sea Grant has engaged this important issue on several levels:

Helped to establish a Coastal Environmental Economics Extension Network that focuses on the economic valuation of our coastal resources.
Established and hosted a regional Environmental Finance Center with support from the U.S. EPA.
Working with the Finance Center, facilitated more than two dozen charrettes with communities and municipalities, and helped to facilitate a Blue Ribbon Panel on Financing Alternatives for Maryland’s Tributary Strategies and the Chesapeake Bay Watershed Blue Ribbon Finance Panel (pdf, 4.2MB).

Coastal Environmental Economics Extension Network

This network aims to enhance the use of environmental valuation information when making coastal management decisions based on NOAA science. The Network focuses on:

Education of coastal decision makers about environmental valuation and its use in coastal management
Regional applied environmental valuation projects that address key management concerns in coastal issues
Extension of this information so that it is correctly interpreted and applied in the decision-making process

Learn more at: http://www.mdsg.umd.edu/programs/extension/valuation/

Environmental Finance Center

Realizing the importance of skillful financing approaches to environmental problems, during the early 1990s Maryland Sea Grant worked directly with the U.S. Environmental Protection Agency to set up an Environmental Finance Center for EPA’s Region III, which is roughly congruent with the Bay’s 64,000 square mile watershed.

Sea Grant and the University’s systemwide Coastal and Environmental Policy Program brought in experts from the University of Maryland School of Public Policy and other campuses and drew on a range of talent from federal, state and local government, and the private sector to form the University of Maryland Environmental Finance Center (EFC). Key in this endeavor was the involvement of the private sector, including investment bankers, venture capitalists, and others with in-depth financial expertise, including experience on Wall Street.

From its founding in 1992 until 2004, the EFC was located at Maryland Sea Grant and directed by Dr. Jack Greer. During this time, Greer and the EFC facilitated over two-dozen environmental finance charrettes, and pioneered the use of the charrette process for the purposes of solving difficult environmental finance challenges. These charrettes took place in New York, Pennsylvania, Delaware, Maryland, and Virginia, with additional work in West Virginia and beyond. They ranged from small township meetings to statewide efforts, such as the Blue Ribbon Panel convened by the governor of Maryland to examine Financing Alternatives for Maryland’s Tributary Strategies. As part of a Sustainable Urban Environments initiative supported by the EPA, Greer also facilitated urban environmental finance charrettes in San Francisco, Cleveland, Charlotte, and Houston.

Working with the regionwide Chesapeake Bay Program, the EFC helped to staff and facilitate the Chesapeake Bay Watershed Blue Ribbon Finance Panel, chaired by former Virginia governor Gerald Baliles. Upon the Panel’s conclusion, Maryland Sea Grant and the EFC assisted in the production of its final report, Saving a National Treasure: Financing the Cleanup of the Chesapeake Bay (pdf, 4.2MB), which contains two dozen recommendations for funding strategic Bay restoration measures.

True to the Sea Grant model, after establishing a strong track record for the EFC, Maryland Sea Grant determined in 2004 to transfer this activity to the University of Maryland, College Park. The EFC first went to the University of Maryland Institute for Governmental Service and then to the National Center for Smart Growth. Top-flight work continues there in the areas of watershed financing, agricultural finance, fiscal analysis, and capacity building. Learn more about the Environmental Finance Center and its current work at www.efc.umd.edu.

Financing Alternatives for Maryland's Tributary Strategies

Maryland has designated ten major tributary basins for the Chesapeake Bay, and has organized restoration efforts around those watersheds. Tributary Teams have been appointed for each basin to focus on pressing problems, such as nutrient and sediment pollution from agriculture, stormwater runoff, and sprawl development.
During the mid-1990s the governor of Maryland appointed a blue ribbon panel of finance and other experts to suggest ways to fund various elements of the Tributary Strategies, from waste treatment, to stormwater, to agriculture.

The full report can be found at: http://www.efc.umd.edu/blueribbon.html