The encyclopedia · R&D & Science · Strategic decision · 1983–2008
US lets developers buy wetland credits from one restored site
A developer who damages wetlands buys pre-credited restoration from one big site instead of failing at small on-site fixes.
US Army Corps of Engineers · US Environmental Protection Agency · mitigation bank sponsors
the move
Historically a developer who dredged or filled a wetland had to offset it, usually by restoring a small wet patch on their own site. These patches were hard to engineer, easy to abandon, and often failed, so the Clean Water Act's goal of no net loss was met in paperwork more than in ecology.
Mitigation banking reorganized the obligation. A sponsor restores one large former wetland, gets an Interagency Review Team to certify the number of credits its ecological lift represents, and then sells those credits to permit holders.
Because the restoration is already done and monitored before the developer buys, the risk of failure shifts from the builder to the bank. Developers, who know nothing about wetland ecology, simply write a check.
The 2008 mitigation rule put bank credits first in the hierarchy of allowed compensation. By 2001 there were about 219 approved banks covering roughly 139,000 acres, and by 2013 over 1,800 bank sites were in the federal RIBITS database.
why it works
- A bank aggregates many small permit obligations into one large, better-restored property.
- The developer's liability transfers to a bank that has an incentive to succeed.
- Credits are measured and certified before sale, so compensation happens up front.
- A perpetual easement and endowment keep the restored site protected after the credits are sold.
what transfers
When a rule meets many weak hands, let a specialist aggregate the work and sell it. Credits turn a failure-prone obligation into a product and concentrate it into one restorable site.
what came after
Mitigation banking became the preferred option over on-site and in-lieu-fee mitigation, and remained a mainstream market-based tool. Critiques continued that credits were sometimes awarded for marginal gains, but banks kept growing and became standard for highway and infrastructure projects.
references
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