Q&A with Joel Dunn and Tim Male:
Creation and Passage of the Conservation Finance Act

On April 21, 2022,  Maryland Governor Hogan signed the Conservation Finance Act (H.B.653/S.B.348). This bill, sponsored by Senator Sarah Elfreth and Delegate Sara Love, makes traditional infrastructure financing equally available to green and blue infrastructure projects and promotes private investment in such solutions (NCEL 2022). Read this issue’s Q&A with Tim Male, Executive Director, Environmental Policy Innovation Center, and Joel Dunn, President & CEO, Chesapeake Conservancy.

1. Tell us about the Conservation Finance Act (CFA) and why is its passage so important to Maryland? 

   Maryland probably has more ecological restoration companies and ecological investors and offices per square mile than any state in the country, but most of those companies do their biggest restoration projects in other states. This legislation was a bipartisan effort to make many small adjustments to a dozen state programs to make it much easier for private finance to play a bigger role in providing Chesapeake Bay restoration and climate solutions.

2. The bill passed in early 2022 so when might we see it in action?

   We are already hearing of its implementation. For example, the bill allows the state’s big water infrastructure loan program to provide a guarantee for land trusts that allows them to  get bank loans  a lower interest rate to buy more land. Ideas like that are already taking shape because of the law.'

3. What’s the ‘big water infrastructure program’ you mention?

   With joint funding by the U.S. Congress, Maryland has run a program for more than 20 years that has provided $3.7 billion for local governments and others to build and upgrade facilities that treat sewage, wastewater, and stormwater. The loan part of the program is so successful that recycled loan repayments now fund more new projects than the money from Congress does. The CFA clarified the authorities of this program, making it even easier to fund green infrastructure and creating a first-in-nation definition of ‘blue infrastructure’ that lets the program fund oyster reef restoration and a number of other Bay-based water quality projects.

4. What was the role of the Chesapeake Conservancy and Environmental Policy Innovation Center in the creation/passage of the bill?

   In 2019, a partnership between our two organizations initiated a dialogue between leading private restoration companies, climate investors, state agencies, and nonprofits to identify areas where we agreed that policy change could help expand the use of private capital for public conservation goals. Our organizations then helped put those ideas together and explained how they connected to existing barriers in state code. 

5. Were there any critical partners?

   Too many to count! The 40-page law passed the Maryland Senate and House almost unanimously. That doesn’t happen unless lots of organizations and groups are supportive. The bill had support from everyone from the Maryland Forest Association to Hannon Armstrong, a Maryland-based climate investor.

6. Have any other states adopted legislation similar to the CFA?

   No. Maryland was the first by design and because leaders such as Maryland’s former Environment Secretary, Ben Grumbles, wanted to be the first. But many states have expressed interest in following suit.

7. What are the implications/contributions to Chesapeake Bay restoration goals?

   We’ve passed or are passing a couple of big milestones in the Bay. First, a lot of the easiest work is done. That means we need more creativity and ingenuity to find the next big frontiers for Bay restoration. Second, we’ve figured out the ‘recipes’ for a lot of categories of projects. That means we now need to find ways to do those projects more and more efficiently. In other words, we need to move toward more wholesale delivery of certain categories of conservation work in the Bay. The bill will make innovation, replication, and efficiency easier to deliver in Maryland.

8. Where can people go to learn more about the CFA and its impact in Maryland moving forward?

   The website www.policyinnovation.org/cfa is a great place to learn more about the details of the bill, letters of support, and what it will mean for Maryland.

9. What haven't I asked that our readers should know?

   The legislation is focused on private, profit-seeking finance and what is often private company-led restoration in the Bay and new ways to expand it, but this private investment and activity has been helping the Bay for decades. Our organizations published a report in 2021 that looked at a set of programs in all the Bay states that depend upon private profit-seeking capital and found that more than $4.2 billion of it has already contributed to Bay goals over the last 20 years.

   Further information is available at www.policyinnovation.org/cfa.

NCEL. 2022, April 11. Maryland Passes the Climate Solutions Now Act. National Caucus of Environmental Legislators. Available from https://www.ncelenviro.org/articles/maryland-passes-the-climate-solutions-now-act/ (accessed August 29, 2022).