Mitigation banking

Mitigation banking is the preservation, enhancement, restoration or creation (PERC) of a wetland, stream, or habitat conservation area which offsets, or compensates for, expected adverse impacts to similar nearby ecosystems. The goal is to replace the exact function and value of specific habitats (i.e. biodiversity, or other ecosystem services that would be adversely affected by a proposed activity or project. The public interest is served when enforcement agencies require more habitat as mitigation, often referred to as a mitigation ratio, than is adversely impacted by management or development of nearby acreage.

In the United States, federal agencies (under section 404 of the Clean Water Act), as well as many state and local governments, require mitigation for the disturbance or destruction of wetland, stream, or endangered species habitat. Once approved by regulatory agencies, a mitigation bank may sell credits to developers whose projects will impact these various ecosystems.

Credits are units of exchange defined as the ecological value associated with converting to other economic uses a naturally occurring wetland or other specific habitat type. Mitigation credits to compensate for riparian impacts may be assigned in relation to the linear distance of a stream functioning at the highest possible capacity within the watershed of the bank.

Credits are designated by an interagency Mitigation Bank Review Team (MBRT). The MBRT evaluates and permits a proposed Mitigation Bank. The MBRT may include representatives of various federal, state and/or local government agencies, including: U.S. Army Corps of Engineers, National Marine Fisheries Service, Environmental Protection Agency, US Fish and Wildlife Service, State Environmental Protection Divisions, Local Water Management Districts, County Environmental Departments and the Soil Conservation Service.

There are several advantages to drawing on mitigation bank credits. For example:

Despite policies mandating no net loss of habitat value and function, agencies have had difficulty ensuring that mitigation programs are managed to this outcome. Wetlands mitigation programs, for example, have in some cases been approved based on total numbers of acres rather than in terms of equivalence in ecological value or function. Merely assuming that the compensation involves a similar number of acres falls short of true equivalence unless the replacement ecological functions supplied by those acres are also the same.

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