What
is a Mitigation Bank?
A mitigation bank is
privately or publicly owned land managed
for its natural resource values. In
exchange for permanently protecting the
land, the bank operator is allowed to
sell habitat credits to developers who
need to satisfy legal requirements for
compensating environmental impacts of
development projects. A mitigation bank
is a free-market enterprise that:
-
offers landowners
economic incentives to protect
natural resources;
-
saves developers
time and money by providing them
with the certainty of
pre-approved compensation lands;
and
-
provides for
long-term protection and
management of habitat.
Mitigation banks typically
involve the consolidation of many small
wetland mitigation projects into a
larger, potentially more ecologically
valuable site. Further, mitigation banks
require the up-front compensation prior
to affecting a wetland at another site.
This ensures the success of the
mitigation before unavoidable damage
occurs at another site. With proper
implementation and guidelines, mitigation
banking has the potential to increase
ecological benefits, save money for
project applicants, and improve
efficiencies in application and
permitting processes.
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What
is Mitigation Banking?
The concept of mitigation
banking has been around since the
’70s. Mitigation banking is the
restoration, creation, enhancement, or in
exceptional circumstances, preservation
of wetlands for the express purpose of
providing compensation for unavoidable
wetland losses in advance of development
actions, when such compensation cannot be
achieved at the development site or would
not be as environmentally beneficial.
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What
are Mitigation Banking Credits and
Debits, and How Are They Determined?
A mitigation bank is not
like a checking account. Credits placed
in deposit by a sponsor can only be spent
by a user if the regulator approves the
action. The "currency" of the
bank must be measurable to the extent
that wetland functions and values
credited and debited are comparable. In
many cases, owing to limitations in
wetland functional assessment
methodology, credits and debits have been
measured simply in terms of acres of
various wetland classes produced or lost.
Credits and debits
essentially represent
"currency" or units of trade.
Credits represent the accrual or
attainment of wetland functions at the
bank site resulting from the restoration
being done, while debits represent the
loss of functions at the project site.
The Corps of Engineers, in
conjunction with the Mitigation Bank
Review Team, determine the number of
credits available at a bank site based on
the potential for restoring or enhancing
the wetland functions as compared with
existing conditions. The potential for
restoring wetland functions is determined
by applying an appropriate functional
assessment technique, such as the Hydrogeomorphic
(HGM) Approach for Assessing Wetland
Functions.
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What
are the Benefits of Mitigation Banking?
Mitigation banking has a
number of benefits over traditional
compensatory mitigation. Mitigation banks
can consolidate many small, scattered
compensatory mitigation sites into one
larger site that may be more advantageous
for maintaining the integrity of the
aquatic ecosystem. Mitigation banks bring
together financial resources, planning
and scientific expertise not practicable
to many small compensatory mitigation
projects, thus increasing the probability
of success. Typically, mitigation banks
are functioning at some level prior to
project impacts, thereby reducing
temporal losses of aquatic functions.
Consolidation of compensatory of
mitigation within a bank increases the
efficiency of limited agency resources
needed to review and monitor mitigation
projects for compliance.
Summary:
-
Reduce uncertainty
over whether the compensatory
mitigation will be successful in
offsetting project impacts;
-
Assemble and apply
extensive financial resources,
planning, and scientific
expertise not always available to
many permittee-responsible
compensatory mitigation
proposals;
-
Reduce permit
processing times and provide more
cost-effective compensatory
mitigation opportunities; and
-
Enable the
efficient use of limited agency
resources in the review and
compliance monitoring of
compensatory mitigation projects
because of consolidation.
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Wetlands are regulated
under a number of statutory authorities.
Regulatory agencies from the federal,
state and local governments all have an
interest in overseeing wetland
protection.
Under current regulatory
programs, parties seeking permits for
activities that affect wetlands must
first avoid and then minimize those
effects. Any remaining damage must be
compensated. Historically, the regulatory
preference for compensation has been
on-site creation, restoration or
enhancement of a wetland. These
mitigation efforts have resulted in
several smaller "postage stamp"
wetlands that have had limited success in
reaching full-function potential.
The sequencing of
avoidance, minimization and compensation
still applies prior to using credits from
any mitigation bank. However, in contrast
to traditional mitigation activities,
mitigation banking requires that
compensation - restoration, creation,
enhancement, and/or preservation - occurs
before a site is affected by a project.
Bank projects are put in place prior to
allowing unavoidable impacts by a
project. Credits are generated by this
up-front activity. Those credits can then
be used by the bank sponsor or sold to
another party to offset impacts to
wetlands that occur in other locations.
Again, only impacts that cannot be
avoided or minimized are available for
compensation through credits from a
mitigation bank.
Source: Department of
Ecology
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Ideally, mitigation
banking can best be implemented in the
context of watershed planning. Mitigation
banks can be designed and located to
address specific watershed needs. This
could mean enhancing or restoring wetland
functions that are in short supply or are
of critical importance in a given
watershed or drainage basin. Good
ecological assessment of watersheds,
combined with transportation,
infrastructure, and development planning,
will allow mitigation banks to be
designed and located in areas where they
serve the greatest ecological good.
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The
HGM
Approach was designed to satisfy the need
for better information on wetland
functions within the programmatic
requirements of the Clean Water Act
Section 404 regulatory program. The HGM
Approach is a wetland assessment
procedure that is based on three
fundamental factors that influence how
wetlands function: position in the
landscape (geomorphic setting), water
source (hydrology), and the flow and
fluctuation of the water once in the
wetland (hydrodynamics). The HGM Approach
first classifies wetlands based on their
differences in functioning; second, it
defines functions that each class of
wetland performs; and third, it uses
reference to establish the range of
functioning of the wetland. Regional
assessment models are developed based on
the functional profile that describes the
physical, biological, and chemical
characteristics of a regional wetland
subclass.
Information may be
obtained by writing to:
The Chief of Engineers, Army Corps of
Engineers, ATTN: CECW-OR, Washington, DC
20314-1000.
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