Applying Conservation Finance to Coastal Oregon: Key Takeaways and Potential Next Steps

Written by: Jeannie Davidson and Amber Moore

Blue Forest, Bonneville Environmental Foundation (BEF), and the Pew Charitable Trusts (Pew) explored how conservation finance could advance conservation and restoration projects on the Oregon Coast, with a focus on blue carbon and other co-benefits. We worked to assess the readiness, capacity, and opportunities for conservation finance in this rural coastal region with diverse land ownership. See Figure 1 for features of a conservation finance-ready project.

The Oregon Coast is a rural landscape that is home to multiple endangered aquatic, avian, and insect species. These ecosystems also provide numerous benefits to communities along the coast. Watershed-scale restoration will help protect these important ecosystems and the benefits they provide. The region has many small, dispersed population centers, with small local governments and watershed councils, many of which do not have a tax base or other funding options for restoration work outside of traditional grants.

There are a variety of challenges for these coastal communities, especially when faced with financial constraints and different priorities. This creates a compounding issue for conservation work where these communities are not only constrained to small projects due to limited planning and administrative capacity but also face a disproportionate burden from grant application processes, reporting, and reimbursement. A diversity of land ownership in coastal Oregon and small landowner parcels makes it difficult to coordinate watershed-scale restoration projects and create benefits at scale across a patchwork of landholdings and landowners. In some cases, zoning does not match conservation easement or incentive program goals, presenting a challenge for those interested in preserving land for conservation purposes.

Through this exploration, we engaged multiple community stakeholders, including non-profit organizations, infrastructure owners, science partners, and Tribal Nation staff, to understand the challenges and opportunities around implementing conservation initiatives and priorities. Overall, we discovered that there is potential for conservation finance to be successful on the Coast, which could alleviate some of the finance and funding challenges that the restoration community currently faces.

Here are broad takeaway themes that can inform future efforts to leverage innovative funding models in support of coastal ecosystem protection and restoration. These actions have the potential to build the foundation to scale conservation and restoration activities in coastal Oregon, and unlock mechanisms like conservation finance to support this critical work.

Theme One: Get Local and Build Trust

Local buy-in, trust, and co-creation of projects are critical to the success of the conservation finance model and to ensure solutions are tailored to local needs.

As an exploratory exercise, the scope of work for the selected geography was broad, originally focusing on projects that may have some blue carbon benefits along the entirety of the Oregon Coast. The broad scope limited the ability to dive deeply into local dynamics and build relationships, develop  science, analyze financial structures for specific projects, and make nuanced recommendations.

Moving forward, it is important to focus conservation finance explorations on specific geographies. Focusing in a specific place allows for local relationships and trust between conservation finance partners and on-the-ground partners to develop. This enables   these partnerships to have the foundation to think creatively and develop place-based solutions in the local landscape, as well as to blend and braid different sources of funding needed to complete projects at scale. Empowering and supporting local partners to identify and tackle priorities on the landscape is critical for conservation finance to be successful.

Identifying the best mechanism for conservation finance requires investment in one location and working deeply with local partners to build trust and long-standing relationships as well as an understanding of the priorities and needs in that community.

Theme Two: Build Capacity to Operate at Scale

Throughout the effort, local partners emphasized gaps in capacity to convene, design large-scale projects, and pursue new funding opportunities. Limited capacity to lead and participate in collaborative efforts is a common constraint to scaling habitat and other ecological restoration and conservation efforts. Many collaboratives have convened in Coastal Oregon but have not been able to continue due to capacity and funding constraints. Traditional sources of funding for restoration and conservation projects (such as grants) often have restrictions around supporting capacity and/or project planning or design. Providing funding for capacity and project planning gives partners the time and space needed to build and maintain relationships (see Theme One above) and design and implement large scale projects or aggregate smaller projects. These projects often span multiple land ownership types and jurisdictions and include a diverse range of on-the-ground activities requiring a range of planning and implementation expertise.

Building capacity to operate at scale is also critical to unlocking new funders (e.g. utilities, foundations, grantors) and conservation finance opportunities, where larger scale projects can demonstrate measurable benefits to attract a diverse range of funders and/or investors. The diverse land ownership patterns and rural communities on the Coast mean that aligning project benefits, beneficiaries, and timelines will take even more time and capacity than other efforts to scale.

Operating at scale could include aggregating multiple project types within a given geography that when combined create a larger impact for local coastal resilience. This approach could include working with private, local, and/or state land managers to explore opportunities for conservation finance in a headwaters to sea project with multiple benefits. While identifying a common benefit involves working across multiple geographies, it is still critical to work deeply with each community as discussed above. Intermediary organizations such as NGOs (at the local, state, or national level), state agencies, or resource conservation districts may be able to play this role as aggregator.

Ultimately, successful deployment of conservation finance can help provide a structure to build and maintain capacity over time by providing flexible funding to support project management and ease the burden of pulling together different sources of funding for projects, which often have different timelines and reporting requirements.

Theme Three: Invest in Quantifying and Communicating Outcomes

Conservation finance readiness depends on available data and ecosystem services for each project site, strong consensus around outcomes or proxy measures, and interest from potential funders (e.g. utilities, foundations, grantors). For example, we learned from conversations in Coastal Oregon that sedimentation reduction from watershed restoration is a priority for multiple downstream infrastructure owners. Working with downstream infrastructure owners to strengthen consensus around benefits of upstream restoration and conservation impacts and improve methods for measuring impact in Oregon could help establish a new conservation finance approach, identify increments for payments, and attract funding.

When strengthening models it is important to work with local partners and potential funders to understand nuances of local ecology and priorities of funders. This highlights the importance of continuing to understand information needs of funders and invest in the development and application of science or other tools that can build consensus and/or demonstrate specific, measurable benefits for a suite of ecosystem services, provided by conservation and restoration efforts.

Beyond sedimentation, blue carbon presents an interesting opportunity for conservation finance, but there is a need to strengthen the ability to measure impact across the Coast and to achieve scale in impact. The Oregon Watershed Enhancement Board is investing in a Blue Carbon Calculator that will help restoration practitioners and potential funders estimate the carbon storage potential of a given restoration project. Achieving impact at scale may necessitate a strong synergy with the need to build local trust and aggregate projects with blue carbon and other ecosystem benefits across multiple communities.

Theme Four: Engage a Mix of Funders

The scale of conservation and restoration needs across the Oregon Coast requires us to think creatively and engage a range of funders with a diversity of interests and priorities.

Government funding from state and federal agencies can provide critical baseline funding for a number of restoration activities and serve as a catalyst for/complement to private sector funding. Government resources could play a big role in supporting local capacity building through expanding eligible activities for funding (e.g. funding for planning), streamlining application processes, and providing long-term support for project management and monitoring. State and federal government funding, particularly with additional resources made available from the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), could be utilized to attract new non-traditional funding sources to the area and build capacity of local partners.

Corporations, local infrastructure owners, and other local organizations can help scale funding to address gaps. These organizations are typically focused on very specific interests, locations, or priorities. In particular, corporations have a growing interest in investing in projects that generate improved water quantity and quality, carbon, and other benefits. Our exploration found that local infrastructure owners on the Oregon Coast, like water utilities or ports, may be interested in supporting coastal resilience projects but their funding is limited and there is a need to build mechanisms and consensus around proxy measures. Increased funding through the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) also provide an opportunity to think creatively around ways that local infrastructure owners could support coastal resilience projects, through opportunities like designing combined gray and green infrastructure projects.

Developing a strong business case or value proposition around the benefits of conservation and restoration projects could help corporations and local infrastructure owners gain confidence and shareholder/public will to engage in conservation finance arrangements. Establishing local relationships and understanding local priorities, as discussed above, can also support engaging non-traditional sources of funding.

Insights from stakeholder, partner organization, and Tribal nation staff during our exploration point toward compelling opportunities on the Oregon Coast to leverage conservation finance to overcome cash flow constraints, engage new potential funders and funding streams, and scale toward holistic watershed restoration. At the same time, the rural nature of the Coast and the complexity of land management structures indicate that it will take time to build buy-in, develop local relationships, and enable conditions required to launch a conservation finance initiative. Our hope is that the takeaway themes and insights presented above will help support any efforts to build the foundation to scale conservation and restoration activities in areas like coastal Oregon and elsewhere.