Paying for Conservation as a Good, not a Service
States are taking the lead in shifting farm programs toward measurable conservation outcomes. But what does it mean to pay for an outcome?
An environmental outcome is a single, quantifiable, and certified unit of improvement to the environment, such as a pound of nitrogen prevented from entering waterways or a ton of carbon sequestered in soil. By focusing conservation programs on the end result instead of the process to get there, state governments can cut administrative waste and align incentives for companies, nonprofits, and farmers to create innovations that maximize each dollar spent.
Did You Know?
Why It Matters
One of the most valuable functions of these state-level programs is price discovery. Lawmakers get to know exactly how much they’re spending for every unit of conservation results. Then, both bidders and state administrators can compete to drive down costs and drive up environmental benefits.
Our Way Forward
We work directly with lawmakers, advocates, and program administrators to build state-level programs that adopt outcomes-based conservation strategies. These emphasize quantifiable environmental improvements, while providing greater flexibility to farmers and streamlining administrative processes.
Our Impact
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Maryland’s Clean Water Commerce Program
The 2017 Clean Water Commerce Act was originally designed to fund the most cost-effectiveness upgrades to wastewater treatment plants, but in 2021 the concept was dramatically improved to buy water quality improvement outcomes from other kinds of green infrastructure, including on agricultural lands. Now, this groundbreaking program has been authorized through 2030 to purchase $20 million a year of the most cost-effective nitrogen reduction outcomes. By focusing on outcomes, this program can bypass the typical bottleneck of technical assistance that has led to frustratingly long wait times for farmers who want to conduct conservation. It’s allowing the state to scale proven solutions for preventing nitrogen from entering streams, rivers, and the Chesapeake Bay. Maryland Department of the Environment has awarded $60 million of contracts, with the average price decreasing by 20% between rounds 1 and 2.
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Pennsylvania’s Clean Water Procurement Program
Pennsylvania has long struggled to reconcile its impact on the Chesapeake Bay with its lack of direct access to the estuary. 2022 saw a breakthrough in this paradigm with passage of the $225 million Clean Streams Fund, funded by the American Rescue Plan. Within this Fund, $22.5 million is allocated to the Clean Water Procurement Program, which will buy nitrogen, phosphorus, and sediment reductions much like Maryland’s Clean Water Commerce Act. These quantified units of environmental improvement are getting paid for after they are produced, as goods rather than services. This contracting structure will cut paperwork for providers and increase competition, thus driving down costs and allowing for greater restoration benefits. The administering agency, PENNVEST, has now released three rounds of RFPs, with the most recent round funded fully by state dollars.
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Cross-border collaboration in the Susquehanna watershed
Pennsylvania is so crucial to the Chesapeake watershed because of the Susquehanna River, which provides 55% of the fresh water entering the Bay and whose watershed reaches all the way into New York state. Much of the sediment (and the nutrients that come with it) flowing through the Susquehanna was expected to be trapped behind the Conowingo Dam, but as those predictions have been updated, the states now need to find another way to prevent 1.675 million pounds of nitrogen from flowing into the northern reaches of the Chesapeake Bay. To address this, Maryland transferred $25 million to the multi-state Susquehanna River Basin Commission to buy nitrogen reduction outcomes using Pay for Success contracts in either state’s portion of the watershed. To our knowledge, this represents the first time Maryland will spend state money on projects in another state in the watershed. This collaboration is only enabled because of the clear, quantified environmental outcomes provided by Pay for Success contracts.
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Virginia’s Pay for Outcomes Pilot
In 2024, Virginia’s legislature passed a budget amendment to establish a $20 million Pay for Success nutrient reduction program. The twist is that this program prioritizes projects which can show greater certainty of achieving reductions than just using models alone. Applications that incorporate monitoring of the outcomes or outputs correlated with the outcome will be more likely to receive funding. In May 2025, Virginia announced that 580,000 pounds of nitrogen pollution reductions had been selected for purchase from nine projects.
