New GIS-based Methods Allow More Accurate Estimation of Conservation Costs

Above: Boundary of Conservation Easement. Source: Wikipedia.

Background:

In the United States, public lands refer to areas that are owned by various governmental entities. In addition, Indian reservations are managed by various Indian (Native American) tribes. All land other than these are privately owned, by individuals, companies, organizations, or other non-governmental entities.

In most cases, the legal owner(s) of an area of land can use the land as he/she/they see fit. These include agriculture, resource extraction, manufacturing, other commercial activities, and residential use, among others.

Conservation and other ecological ends may not necessarily be the priority for all owners.

Sometimes, to ensure conservation (in a general sense, or with a specific focus), that land is bought from private owners. The buyers can be conservation-focused organizations or governmental entities. Regardless of buyer, fair market value (or FMV) or the land area in question is generally held to be an ideal purchase value, subject to mutually agreeable negotiation between the selling and buying parties.

However, determining FMV is not always straightforward. The land itself has some value (which varies from place to place), with additional value coming from resources that can be extracted from it (minerals, oil, etc). Additional value can come from agriculture that can be conducted directly on that land. Yet more value can come from commercial activities like manufacturing that can be conducted in facilities built on that land.

Frequently, the end result of this is no clear, specific value for land areas. Those interested in possibly purchasing privately-owned lands for conservation sometimes need to make a best guess or reasonable estimate for the value of the land. The total proposed budget for the conservation project that involves the land in question is then build upon this non-verified amount.

With this budgetary uncertainty, many land-acquisitive conservation projects are never even put into motion due to financial concerns. Many more projects have to be abandoned when it the actual values of land turn out to be much higher than estimates, as has historically been the case.

There hasn’t been a way to determine values of privately-held areas of land across the United States that was is reliable, accurate, and reasonably accessible to entities that could make use of it.

A paper recently published in the Proceedings of the National Academy of Sciences shows one scientist’s novel approach in solving this dilemma.

Paper Overview:

The scientist, Dr. Christoph Nolte, used a custom computerized system called PLACES that took into account land attributes like rural vs. urban location, physical geography, distance to roads, development history, confirmed presence of minerals nearby, and many other factors. Most of these attributes were publicly available in some form. Using geographic information systems (GIS) analysis, he was able to use these attributes to determine prices of privately-owned land down to a very small scale.

The FMV prices for current privately-owned land is shown below, in Figure 1 from the paper. In the legend, ha stands for hectare (10000 square meters, or 2.47 acres), K stands for thousand, and M stands for million.

Dr. Nolte also demonstrated the accuracy of his model and technique, especially compared to other contemporary methods. The known total costs of 4,182 land acquisition transactions were each compared with the FMV of the same land areas, as determined by his technique. The known costs were also compared with the FMV predicted by other current methods. The results are shown below, in Figure 2 from the paper.

In each of these figures (each lettered graph represents a different method of estimating FMVs), the grey line is a diagonal trend line representing the actual costs of each of the 4,182 transactions. The red line represents the trend line of FMV prices determined by each method. Dr. Nolte’s technique and a slight variation are shown in graphs G and H. As you can see, the FMVs determined by his method match quite well with the actual costs, and do so far better than the other methods.

Along with presenting Dr. Nolte’s methods, and that it is more accurate than other current methods, the paper discusses the other methods’ underestimation of the actual costs of land conservation. An illustrative example of a specific area is shown below, in Figure 3 from the paper, below.

The methods in the paper (PLACES FMV) estimate the total cost to be over twice that of the estimate yielded by other methods. Given that the former method has been shown to be more accurate overall, it seems likely that this higher cost estimate is closer to the actual costs.

Takeaways:

Land conservation is not free, not is it cheap. Thus, any associated costs need to be accurately planned around and budgeted for. Currently used methods do not always yield accurate cost estimations compared to FMV. This can lead to numerous financial and logistical issues with conservation projects, can prevent projects from being realized, and can make governments and the public more wary of pursuing long-term land conservation projects. More accurate cost estimates, including those that result from the method discussed in this paper can mitigate those potential issues, and lead to more informed, more transparent, and ultimately, more effective land conservation projects.