Bozeman, Mont. — A new report finds that allowing conservation tax credits to be bought and sold can make conservation easement programs more equitable, more effective, and better targeted to high-value landscapes—without increasing public spending. The report, “Trading Green: How Transferable Tax Credits Supercharge Conservation Easements,” from the Property and Environment Research Center (PERC), explores how the right incentives can help easements benefit more landowners and landscapes.
Today, conservation easements cover roughly 38 million acres across the United States. They are one of the nation’s most important voluntary tools for protecting private land. By donating development rights, landowners can preserve farms, ranches, wildlife habitat, and open space while receiving tax benefits.
But traditional tax incentives often favor high-income landowners who can fully use tax deductions, limiting participation by farmers, ranchers, and other landowners with lower tax liability.
The report shows that transferable tax credits—credits that landowners can sell if they cannot use them—help level the playing field.
“Tax credit markets help ensure that decisions are driven by the conservation value of the land, not the tax bracket of the landowner,” says author Dominic Parker. “By making these incentives more accessible, states can expand participation and improve conservation outcomes without resorting to new ecological mandates or increased public spending.”
Key findings
The research, conducted by economists Annalise Helm, PERC graduate fellow and Ph.D. student at the University of Wisconsin-Madison, Dominic Parker, PERC senior fellow and Anderson-Bascom professor of applied economic at the University of Wisconsin-Madiso, and Garrett Shost, PERC graduate fellow and Ph.D. student at the University of Wisconsin-Madison, combines a detailed analysis of federal and state tax codes from 1990–2025 with evidence from 12 states that adopted conservation tax credit programs.
The study finds:
- Transferable credits broaden participation in conservation: Traditional tax deductions often benefit high-income landowners most, but transferability can help expand participation to lower-income brackets.
- Working lands benefit the most: After states introduced transferable credits, easements were more likely to protect farms and ranches facing development pressure, helping keep working landscapes productive and open, providing essential wildlife habitat and migration pathways.
- Conservation outcome improves: Easements under transferable credit programs are more likely to protect land with higher soil quality and ecological value, suggesting conservation resources are better targeted.
- Conservation becomes more locally rooted: Transferability increases the likelihood that conserved lands remain owned and managed by local farmers and ranchers rather than absentee owners.
Better Incentives, Better Conservation
The findings highlight how improving the design of conservation incentives can expand participation without increasing government spending.
By making tax benefits liquid and tradable, transferable credits connect conservation opportunities with those best positioned to finance them, while allowing farmers and ranchers to continue stewarding the land.
“By equalizing participation across income groups and steering conservation toward high-value working lands, transferability aligns private conservation decisions with broader public goals,” the authors write.
