(This weblog post originally appeared on the  Harvard Business Review website.)

"Buy land," advised Mark Twain. "They're not making it anymore." To me, nothing better illustrates the potential for incorporating natural capital into policy and business decisions than recent efforts by some companies to create new revenue streams from land originally dedicated to single uses — ranching, forestry, oil drilling.

One of my favorite examples is Inland Empire Paper (IEP), which owns over 114,000 acres of timberland in Washington and Idaho. IEP is still harvesting timber (enough for 2,500 houses a year, they say), but they're also realizing income on the same land from the burgeoning recreation market. For a $40 annual permit ($65 for families), you can hike, ski, snowshoe, cut Christmas trees, gather firewood or go berry picking on the company's private woodland. Potlatch, another big timber company, offers turkey hunting in Arkansas, ruffed grouse in Wisconsin and elk, deer and bear in Idaho. Not that the idea of realizing new revenue streams from active agricultural land is exactly new — think Napa Valley.

While IEP, Potlatch and umpteen wineries are responding to the consumer market, much of the natural capital approach to land use is being driven by government regulation. Of course businesses have to change their behavior because of government regulations that tax or fine activities that degrade or destroy ecosystems. What's less well-known is that companies are enhancing their bottom line by thinking broadly about how conservation regulations might be turned into profit. In a world of carbon credits and wetlands swaps, one company's restriction is another's opportunity.

After producing 150 million barrels of oil and 50 billion cubic feet of natural gas over seven decades, Chevron Texaco's Paradis, Louisiana, field was all tapped out. So the company converted the site to a 7,200-acre cypress swamp and hardwood wetlands — which could earn as much as $150 million in the sale of mitigation credits to developers. (Mitigation credits are a type of offset, purchased by, for example, a developer to zero out the harmful environmental impacts of a project). The Chevron Texaco project is the largest wetlands mitigation bank in Louisiana and one of the few near the state's coast, where such banks are most needed, state officials say.

The current wetlands mitigation banking system is not universally loved by environmentalists — there is, for example, an ongoing debate over whether the larger tracts inherent in such a system encourage or discourage species diversity. But mitigation banking has demonstrated the ability of environmental regulation to create a lively private market that supports regulatory ends.

Let's not leave the subject of mitigation banking without a nod to Beartooth Capital, a Montana-based private equity firm. Beartooth has achieved significant ROI for its shareholders by selling or donating conservation easements on land it has restored to non-profits and the government (in return for tax breaks), and by selling mitigation credits. The firm's so-called carbon cowboys are actually brokers who work with ranchers to increase the amount of CO2 the soil on their ranches can absorb. They sell the credits for that CO2 on the Chicago Climate Exchange. There's a lot of carbon mitigation potential in western rangelands, which naturally absorb about 190 million tons of CO2 per year — about what 40 coal-fired power plants emit. Of course the carbon brokerage business is still in its infancy, and with climate change legislation stuck in Congress, many are skeptical that the idea has legs. Though to quote Mark Twain again, "A person with a new idea is a crank until the idea succeeds."

In a future post, I'll say something about how the Chesapeake Bay Program and its public-private partnership approach to restoration and mitigation. I'd love to hear from you in the meantime about other examples, especially unheralded ones, in which companies are using a natural capital or ecosystem services approach to develop new revenue streams from their land.