HITHER AND YON: Environmental Impact Banks Could Become A National Thing

The Times-Picayune has an article today about a piece of legislation set for President Obama’s signing which might end up being the most consequential asset in fighting coastal erosion Louisiana has ever seen.

The proposed law, which heads to the president’s desk after passing the Senate on a 78-21 vote Saturday (Dec. 11), lays the groundwork for so-called “environmental impact banks,” financial institutions to attract private money to pay for a sweeping range of projects, from wetlands mitigation to coastal restoration to habitat renewal for endangered species and beyond.

While similar wetland mitigation banks have been operating in Louisiana for a while, this new concept seems to be on a grander scale that ventures into some uncharted policy territory, explained Rep. Garret Graves, R-Baton Rouge, who steered the new provisions into the bill’s final version.

The impact banks could run on a somewhat similar principle to the mitigation banks: companies wishing to destroy wetlands for a construction project can pay into the banks to offset the damage. The bank can then collect enough resources over time to finance large-scale projects that better reflect Louisiana’s master wetlands restoration plan.’

“You can be more strategic about it by incentivizing or dictating where the restoration would occur,” Graves said.

The impact banks have a few new wrinkles, too. Under the pending law, companies could pay into the banks ahead of time, knowing that they may need to offset upcoming damage they’ll wreak on the environment, or to prepare for any possible catastrophes, such as oil spills. It’s a two-pronged solution that gives companies some insurance against future disasters while providing underfunded coastal restoration projects with much-needed funds well ahead of schedule.

Essentially, it allows resources that would have funded piecemeal mitigation projects to be combined to address more sweeping problems.

This is an idea Graves has been pushing for since he headed the state’s Coastal Protection and Restoration Agency. A few years ago, he gave a talk we were present for at a luncheon put on by the Pelican Institute about the idea of bringing the private sector to bear on rebuilding the coast and applying the profit motive to coastal restoration. Environmental impact banks were a major piece of the presentation, as was the recognition that restoring the coast means creating land, and land can create property rights, which means the creation of wealth.

The devil of all this, of course, will be in the details. Meaning, in this case, in the regulations written to apply the new law.

But there is uncertainty on what the final regulations governing the banks will look like. The bill directs a federal task force created under the Coastal Wetlands Planning Protection and Restoration Act to draw up the new regulations. That group includes members of several federal environmental agencies, the Army Corps of Engineers and officials within Louisiana’s government.

Graves said the possibilities are wide open at this point. Private companies, nonprofits, even state government may be eligible to set up impact banks. Attracting investments ahead of time may speed up completion of vital restoration projects. The task force has been asked to prioritize projects to best address the loss of Louisiana’s coast and wetlands, too, he said.

“Let’s use that science to make sure we’re doing it in the right places,” Graves said.

But with a blank slate, Graves acknowledged the task force would have to be diligent. Not only would it have to establish acceptable environmental standards and monitoring processes for privately-financed mitigation projects, but also be aware of what legal hurdles, such as environmental lawsuits, these banks may face.

Graves’ fingerprints are all over that bill which passed the Senate Saturday. He’s got funding in it and an order to the Corps of Engineers to complete the West Shore Lake Pontchartrain Risk Reduction project, which is a 40-year old idea to build a system of levees to protect St. Charles, St. John, St. James and Ascension Parishes from flooding that could occur when storm surge waters flow into Lake Pontchartrain – which was what happened in 2012 when Hurricane Isaac hit. And he’s also got funding and an order to move forward with the Comite River Diversion Project in the northern part of East Baton Rouge Parish, which is a 30-year old idea to prevent precisely the kind of flooding that happened in August because the Comite and Amite river basins overfilled amid a heavy rain event.

In short, Graves is doing as a freshman House member the things Mary Landrieu tried to take credit for doing as a veteran senator. By the time he gets some seniority and perhaps a committee chairmanship Graves is going to have herded the federal government into doing something about long-neglected and damn-straight-deserved infrastructure projects the state has been owed for a long time.

Recognize, of course, that despite the protestations of Gov. John Bel Edwards and his cabal of plaintiff attorneys attempting to sue the oil industry out of existence in Louisiana, the primary culprit for coastal erosion in this state isn’t Big Oil. It’s the Corps of Engineers, who ham-handedly leveed the Mississippi River all the way to its mouth and thus denied Louisiana’s marshlands the river silt the spring floods would naturally deposit. Coastal marshlands are a battlefront between a river and the sea, and the river will usually win if allowed to. The Corps took the river out of that fight and the Gulf of Mexico has been on the advance ever since.

Finally, Louisiana has somebody willing to turn the tide of that fight and get creative about methods and weapons to use in it. It would be nice if Edwards would get out of his way; the oil industry would probably be more than happy to fill the coffers of environmental impact banks and finance restoration projects and river diversions if it would mean they weren’t chased away by money-grubbing lawyers and a leftist ideologue governor.

Speaking of Edwards, he’s now engaged in bitching at senator-elect John Kennedy over the latter’s statement that Edwards hasn’t presented the federal government with a plan for how the now-$1.6 billion in flood relief money coming from Washington will be spent.

Kennedy had made the accusation in a story by USA Today Network of Louisiana’s Greg Hilburn over the weekend

When Kennedy does join the Senate in January, he said he will try to pry loose more federal flood recovery funding for the state. Congress has approved about $1.6 billion in federal flood relief for Louisiana so far, about $1 bill less that President Obama requested and less than half of the $4.1 billion Edwards requested.

Kennedy placed partial blame for the shortfall on Edwards, saying the administration hasn’t provided an adequate road map for how the federal funding will be spent.

“We need to have a plan to spend what we’ve got and assure (Congress) the money will be spent on flood recovery and won’t be stolen or wasted,” he said. “The (current) delegation did a Herculean job of getting more money. We haven’t given up. That’s on the front burner.”

His concerns are not solely his, either. We’ve talked with staffers of congressmen representing the areas affected by the floods plus the state’s two current senators, and they’ve all expressed the exact concerns. Edwards has not presented a plan for how to spend that money, and without that plan they’re terrified he’ll waste it. Given that Louisiana is going to need flood and storm relief money from Washington on a periodic basis just because of basic geography, and given that so much of the Katrina relief haul was wasted, it simply can’t happen that Edwards turns that $1.6 billion into a slush fund from which to pay off his cronies and supporters while actual flood victims aren’t made whole.

And without a plan, given Louisiana’s sordid political history it’s perfectly reasonable to be terrified that will happen.

In any event, Edwards responded to that interview by writing Kennedy what amounted to a scalded-dog letter.

“I fully intend to work with you in good faith on recovery and other issues related to the state,” Edwards wrote in a letter to Kennedy on Monday. “If this process has taught us anything, it is that Louisiana succeeds when everyone — the congressional delegation, myself and other statewide leaders — are unified in our efforts.”

“It is my hope that we can set aside the partisan politics to achieve great things for our state,” he added.

Edwards, in his letter, remarked on the “unprecedented speed” with which the state has been approved for disaster assistance.

“Less than two months following the devastating August floods, the congressional delegation and I secured a down payment of $438 million,” he wrote. “Immediately upon Congress’ return from the election, we were able to secure an additional $1.2 billion. While this is well below our needs and the requests of my administration, our delegation and the President, we all have agreed to return to leaders in Congress when the funding mechanism returns in the spring.”

Edwards also questioned Kennedy’s insight into the disaster aid process and offered to meet personally with Kennedy and his staff.

“I understand that your time has been consumed with campaigning for the office you will assume in January 2017; therefore you are not up to speed on our flood recovery efforts,” Edwards wrote.

Here’s the actual letter…


You’ll notice there is no representation that Edwards has a plan for spending that money. There is the bureaucratic dodge that the state couldn’t present anything until HUD published its guidelines, as though Edwards had no active role in influencing those guidelines or ability to anticipate or decipher what they would be in advance of Nov. 21 – more than three months after the flood.

Instead, there is a snarky implication that Kennedy doesn’t know what he’s talking about, as though Kennedy is the only one with this concern.

Edwards might think he’s got the upper hand in these fights because Bernie Pinsonat released a poll not long ago showing him with a 62 percent approval rating. But on Saturday Kennedy’s opponent, whom Edwards had endorsed and supported to the hilt, was slaughtered by a 61-39 margin, which should give the governor an idea just how thin that support he thinks he has really is. Playing games to deflect criticism when Louisiana’s people are still suffering from the flood is not going to get him very far, and it’s a good bet that by January he’s going to have a lot more criticism to deflect if he doesn’t produce a defensible plan.

Not to mention Edwards’ budgetary woes are only growing

Louisiana’s multimillion-dollar budget gap is about to get worse.

The state’s income forecasting panel, called the Revenue Estimating Conference, is meeting Tuesday to trim back its income projections for this budget year.

The news is expected to be bleak.

Economists have warned the state’s tax collections for the budget year that began July 1 are coming in lower than expected. Estimates are that the state could face a budget gap of $300 million or more.

Any shortfalls because of this year’s forecast changes will come on top of a $313 million deficit left from last year that has yet to be closed.

The budget will have to be rebalanced — and both gaps eliminated through cuts or financing adjustments — before the current financial year ends in June.

It seems as though the $2 billion in tax increases the governor forced through wasn’t actually $2 billion. Funny how that works out.

And for Today’s Last Thing, we do the foodie thing.

We’re doing grits, and we’re doing the best grits around…

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