FORMAT.DOCX (DO NOT DELETE) 11/26/2012 4:39 PM Private Nature Reserves: An Innovative Wetland Protection Mechanism to Fill in the Gaps Left by the SWANCC and Rapanos Rulings Marcela Bonells* I. INTRODUCTION .......................................................................................... 2 II. REGULATORY BACKGROUND: JURISDICTIONAL ISSUES UNDER THE SECTION 404 PROGRAM............................................................................. 6 III. PRIVATE NATURE RESERVES IN THE CONTEXT OF THE NATURE RESERVES OF CIVIL SOCIETY (RNSCS) IN COLOMBIA ............................ 10 A. Background ..................................................................................... 10 B. Benefits and Drawbacks of Private Nature Reserves in the Context of RNSCs .......................................................................... 14 1. Benefits..................................................................................... 14 2. Drawbacks ................................................................................ 17 3. Proposed Reforms .................................................................... 19 IV. ADOPTING THE PRIVATE NATURE RESERVE MODEL IN THE UNITED STATES: FEASIBILITY AND OBSTACLES ................................................... 20 A. Existing Private Wetland Protection Incentives: the Need for Additional Mechanisms .................................................................. 21 1. Economic Incentives ................................................................ 22 a. Direct and Cost-sharing Payments .................................... 22 b. Tax Deductions and Credits .............................................. 24 2. Non-economic Incentives ......................................................... 25 B. Feasibility and Obstacles ................................................................ 27 V. CONCLUSION ...................................................................................... 33 * J.D., Stetson University College of Law, 2012. Special thanks to Wyeth C. Thomas for his unconditional support and encouragement and to Professor Royal C. Gardner for his guidance during the writing process. The author would also like to thank Luis Fernando Macías Gómez for his input with Colombian environmental laws and the editorial board of Environs, especially Zack Marker and Juan-Carlos Perez. 1 FORMAT.DOCX (DO NOT DELETE) 11/26/2012 4:39 PM 2 University of California, Davis [Vol. 36:1 I. INTRODUCTION Wetlands are among the most biodiverse and productive ecosystems on earth.1 They are described as “the kidneys of the landscape” for the important functions they perform in nature’s hydrologic and chemical cycles.2 Wetlands are also referred to as “biological supermarkets” because of the diversity of life they support.3 They provide valuable ecosystem services to humans and perform critical ecological functions.4 Some of the functions and services that wetlands provide include: habitat for wildlife and fish,5 water purification, flood control, groundwater recharge, and recreational opportunities, such as hunting, fishing, and bird watching.6 Historically, the United States undervalued wetlands and viewed them as mosquito and disease breeding nuisances, which citizens could use more efficiently and effectively.7 This led to widespread wetland destruction.8 However, this perception gradually changed as humans began to appreciate the important economic and environmental value of wetlands.9 Laws and policies of the United States, which shifted from encouraging wetland destruction to promoting wetland protection, reflect this change.10 The most significant example of this shift is section 404 of the Clean Water 1 EDWARD B. BARBIER, MIKE ACREMAN & DUNCAN KNOWLER, RAMSAR CONVENTION BUREAU, ECONOMIC VALUATION OF WETLANDS: A GUIDE FOR POLICY MAKERS AND PLANNERS ix *1997), available at http://www.ramsar.org/pdf/lib/lib_valuation_e.pdf. 2 Id. 3 Id. 4 From an economic perspective, wetlands are extremely valuable to humans. For instance, more than seventy percent of species in the U.S. seafood industry, which generates more than thirty- eight billion dollars annually, are wetland dependent. Ryan M. Seidemann & Catherine D. Susman, Wetlands Conservation in Louisiana: Voluntary Incentives and Other Alternatives, 17 J. ENVTL. L. & LITIG. 441, 497 n.18 (2002). 5 It is estimated that more than one third of all threatened and endangered species in the United States live in wetlands, and an additional twenty percent of threatened and endangered species depend on wetlands at some point in their lives. ENVTL. PROTECTION AGENCY (EPA), ECONOMIC BENEFITS OF WETLANDS (2006) [hereinafter ECONOMIC BENEFITS OF WETLANDS]. 6 For an overview of wetland ecosystem services and functions see MILLENNIUM ECOSYSTEM ASSESSMENT, ECOSYSTEMS AND HUMAN WELL-BEING: WETLANDS AND WATER SYNTHESIS 2 (2005), available at http://www.maweb.org/documents/document.358.aspx.pdf. 7 See ROYAL C. GARDNER, LAWYERS, SWAMPS, AND MONEY: U.S. WETLAND LAW AND POLICY 5 (2011) (citing Leovy v. United States, 177 U.S. 621, 637 (1900)) [hereinafter LAWYERS, SWAMPS, AND MONEY]. 8 Between the 1780s and 1980s, the United States lost approximately fifty-three percent of its wetland base. THOMAS E. DAHL, U.S. FISH & WILDLIFE SERV. (USFWS), WETLAND LOSSES IN THE UNITED STATES 1780’S TO 1980’S 1 (1990), available at http://www.fws.gov/wetlands/ Documents/Wetlands-Losses-in-the-United-States-1780s-to-1980s.pdf; E.g., Joshua P. Welsh, Comment, Firm Ground for Wetland Protection: Using the Treaty Power to Strengthen Conservation Easements, 36 STETSON L. REV. 207, 208 (2006). 9 ROYAL C. GARDNER, LAWYERS, SWAMPS, AND MONEY, supra note 7, at 7-12. 10 CLAUDIA COPELAND, CONG. RESEARCH SERV., RL 33483, WETLANDS: AN OVERVIEW OF ISSUES 1 (2010). FORMAT.DOCX (DO NOT DELETE) 11/26/2012 4:39 PM 2012] Private Nature Reserves 3 Act (CWA).11 Section 404 is the main federal regulatory program for wetland protection in the United States.12 It prohibits the discharge of dredge and fill material into “waters of the United States” without first obtaining a permit from the U.S. Army Corps of Engineers (the Corps).13 Additionally, recognizing the need to protect wetlands, the federal government adopted a short-term policy of “no net loss”14 and a long-term policy of “net gain” of wetland functions and values.15 Congress has also adopted a number of significant wetland protection programs, including the Swampbuster Program, the Conservation Reserve Program (CRP), and the Wetlands Reserve Program (WRP), among others.16 Notwithstanding these wetland protection efforts and reported net gains in wetland area, these gains do not necessarily equate to no net loss of wetland functions.17 Additionally, relatively recent Supreme Court rulings have significantly restricted the Corps’ geographic jurisdiction over wetlands under Section 404, particularly intrastate isolated wetlands.18 The Court has also questioned the federal government’s jurisdictional authority under the Commerce Clause.19 The impact of these rulings is significant considering that seventy-five percent of non-federal wetlands, including isolated wetlands, in the United States are located in private lands.20 Some of these intrastate isolated wetlands, such as vernal pools21 and prairie potholes,22 are of great ecologic and 11 Clean Water Act § 404, 33 U.S.C. § 1344 (2006). 12 COPELAND, supra note 10, at 5. 13 33 U.S.C. § 1344(a). See also §§ 1311(a), 1362(6), (7) & (12) (prohibiting discharge and defining pollutant, discharge, and navigable waters). 14 This policy, declared by the first Bush administration in 1988 and subsequently endorsed by the Clinton and second Bush administrations, seeks to “balance wetlands losses and gains in the short term and achieve net gains in the long term.” COPELAND, supra note 10, at 4. 15 Royal C. Gardner, Banking on Entrepreneurs: Wetlands, Mitigation Banking, and Takings, 81 IOWA L. REV. 527, 534 (1996). 16 COPELAND, supra note 10, at 13-16. 17 While a government study reported an average annual increase in wetland area of 32,000 acres between 1998-2004, the study did not provide an assessment of wetland functions. THOMAS E. DAHL, USFWS, STATUS AND TRENDS OF WETLANDS IN THE CONTERMINOUS UNITED STATES 1998 TO 2004 15, 19 (2006), available at http://www.fws.gov/wetlands/Documents/Status-and-Trends-of- Wetlands-in-the-Conterminous-United-States-1998-to-2004.pdf. But see COPELAND, supra note 10, at 4 (stating that environmentalists caution that the reported net increase in wetland area is due to an increase in man-made open water ponds, rather than natural wetlands). 18 See Rapanos v. United States, 547 U.S. 715 (2006) and Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001). Isolated wetlands are those without a hydrologic connection to water bodies deemed navigable. ROYAL C. GARDNER, LAWYERS, SWAMPS, AND MONEY, supra note 7, at 38. 19 COPELAND, supra note 10, at 2; Welsh, supra note 8, at 216-18. 20 EPA, THREATS TO WETLANDS (2001), available at http://water.epa.gov/type/wetlands/ outreach/upload/threats.pdf. 21 Vernal pools are “seasonal depressional wetlands” found in the U.S. West Coast. Vernal Pools, EPA, http://water.epa.gov/type/wetlands/vernal.cfm (last updated Mar. 6, 2012). Although they serve as habitat for many species, they are under significant threat. It is estimated that over ninety percent of vernal pools in California have been destroyed. Id. FORMAT.DOCX (DO NOT DELETE) 11/26/2012 4:39 PM 4 University of California, Davis