Services

Mitigation Banking - Overview

Wetlands mitigation banking is the creation, restoration, or under certain circumstances the increased protection, of an area of functioning wetland in advance of, and to offset anticipated wetland impacts within the same ecoregion. This concept originated in response to the initiation of wetland regulatory programs, and was intended to expedite the regulatory approval process for allowing wetland impacts. As wetland regulations were originally implemented, developers and governmental agencies with regular construction needs, such as departments of transportation, faced recurring and unpredictable time delays and costs in obtaining permitting approval for projects that involved wetland impacts. They sought a means of advance planning that would make th e permitting process more reliable and would minimize costs. From this need the concept of mitigation banking emerged. While the typical wetland bank involves creation of wetlands from upland area, banking has been expanded to include other compensatory activities. These include restoration or enhancement of degraded wetland and, in rare cases, providing more stringent protection for wetland or wetland/upland habitat associations that are otherwise threatened by human activities not subject to regulatory control. Throughout this discussion, the term "bank" will connote a unified planning effort involving any of these advance forms of wetland mitigation, singly or in combination.

Mitigation banking is different from the normal wetland permitting process in two key aspects. First, it attempts to construct mitigation areas, or bank wetlands, far enough in advance of anticipated impacts in the area to attain fully functional bank wetlands by the time impacts are contemplated, in theory allowing a simple, one-to-one acreage and functional trade in "real time". Second, banks are typically large in area to provide this trading service for numerous contemplated impacts, as opposed to the typical impact-by-impact process associated with conventional wetland permitting.

The general process occurs as follows. The need for a bank is identified by a transportation agency with road construction needs; local or state government planning agency identifying watershed restoration needs; developer planning a large, phased project; commercial entrepreneur; or other party anticipating future mitigation needs in a given area. All banks require the acquisition or possession of a long-term interest in a piece of land by such a corporate, non-profit, or government "sponsor". A site is chosen based on suitability to support the anticipated wetland functional needs. The sponsor establishes dialogue with relevant wetland permitting agencies during these early planning stages. Agencies strongly encourage or require, depending on regulatory jurisdiction, submittal of information on the character of the bank. The bank is designed, depending on its goals, to replace either the anticipated functional losses or identified historical functional losses within a specified trading area. Watershed boundaries are often used to define the trading area based on water resource replacement rationales, but ecoregional or other boundaries may also be used. Regardless of the type of bank created, its value is determined by quantifying the created or restored wetland functions in terms of "credits". Credits may be calculated simply by the amount of acreage and the wetland type, by quantifying habitat, or by quantifying physical and biological functions and social values (IWR 1992). At some point, a permit or other instrument is finalized establishing the bank's: goals, ownership, location, size, wetland and/or other resource types included, trading area, crediting methods and accounting procedures, performance and success criteria, monitoring and reporting protocol, contingency plans, financial assurances, long-term responsibility, and detailed construction plans (Federal Register 1995). Subsequent permit applicants proposing wetland impacts that meet the bank's criteria must first meet all other normal wetland permitting requirements imposed by an agency, such as avoidance and minimization of impacts prior to proposing mitigation. Such applicants can then withdraw "debits" from the bank based on anticipated wetland functional losses due to their development activities.

Source: WATERSHEDSS, which was developed under a grant from the U.S. Environmental Protection Agency, Office of Research and Development, National Exposure Research Laboratory, Ecosystems Research Division, Athens, GA (EPA Project #CR822270/Grant Cooperative Agreement 818397011), Understanding the Role of Agricultural Landscape Feature Function and Position in Achieving Environmental Endpoints, which was granted to North Carolina State University. The EPA project officer is Dermont Bouchard. Principal Investigator and Project Manager is Judith A. Gale (NCSU).