The Wildlife Watch Binocular
Spring 2005 Issue

MITIGATION BANKING

As American wetlands decreased in both size and number over the past few decades, falling prey to various forms of human encroachment, the federal government, spurred by the nascent environmental movement, made some efforts to ameliorate, or "mitigate," the situation.  Mitigation banking was one tool that was developed for use in this cause, with what may be fairly called "mixed results."

In response to public concern about the degradation of our entire natural environment, the Nixon Administration implemented the Clean Air and Water Acts (1970, 1972) the Coastal Zone Management Act (1972), and the Endangered Species Act (1973).   President Carter signed an Executive Order Protection of Wetlands (1977); and the first Pres. Bush announced a "No Net Loss" policy for wetlands, which was also endorsed by Pres. Clinton in his first term.

"NO NET LOSS"

The concept of "no net loss" was that anyone wanting to develop property in a protected wetland area would be obliged to "replace" the loss of that area by creating or restoring an equivalent wetland.  Thus, it was thought, there would be "no net loss" of wetland acreage.   This was considered to be an enlightened way to protect our fast-disappearing wetland habitats and their dependent animal species, as well.   It also spawned the use of mitigation "banks" as a way of keeping track of these exchanges of land.

MITIGATION BANKING

Just as one keeps records of financial transactions in a bank, the creation of new wetlands as payment for the destruction of others is recorded in order to ensure that there is no net loss.   Federal guidelines for the implementation of the Clinton Administration’s Wetland Plan defined the notion of mitigation banking as: "the process of preserving, enhancing, restoring, or creating habitat to compensate for unavoidable wetland impacts."  It is preferred that this creation/restoration be accomplished prior to any building project, and the resultant new or restored wetland is expressed as a "credit" in the mitigation bank.  Mitigation banks, then, provide a way for land developers to compensate for their destruction through currency "credits" of wetland creation, which pay for the "debits" of wetland destruction.   Ostensibly, the developer would create or restore a viable wetland habitat of similar type and size to the area he is ruining.  However, some developers understandably want to avoid taking on such a daunting task themselves.   With mitigation banking, they can go to a land owner who has already created or restored a large wetland area, buy acreage in that property, and count it as a credit that makes up for their planned destruction.

Of course, creating a wetland from scratch is harder than restoring an ailing one.  An on-site watershed is necessary; appropriate soils and vegetation may have to be imported; proper drainage is required.  The developer who is acting as the banker might choose instead to enhance an existing wetland that just needs some improvement to meet the federal guidelines.

Virtually anyone can set up a mitigation bank.  In some cases, local municipalities will establish a bank in order to protect their watershed needs; a Department of Transportation might set one up in order to compensate for their road-building projects; or a private entrepreneur could set up a bank simply for the purpose of buying and selling credits at a profit.

Before taking part in the banking process, a developer is supposed to try to avoid negative impact on the site in question; failing that, they must minimize the impact; and finally, they are to provide compensation for any remaining damage.  While the first two steps in this sequence can be recognized as preferable to the third, unfortunately, the arrival of mitigation banking on the scene has encouraged many people to neglect efforts to preserve the natural site, seeing the way of compensation as a cheaper alternative.  Adding to this betrayal of the spirit of wetland preservation is the fact that off-site mitigation is allowed.  Where developers were originally required to restore or enhance the on-site wetland, now, through mitigation banking, they are allowed to compensate for their destruction of one site by creating another some place else. 

Another feature of mitigation banking is that many small projects are typically consolidated into a large, contiguous creation area, believed to be more ecologically valuable than several isolated sites.

REGULATION / OVERSIGHT

Regulation of mitigation banks is clearly essential to make sure that compensation is properly made and eco-systems are preserved.  The Army Corps of Engineers has the authority to issue permits for affected sites, and one might reasonably expect state departments of Ecology or Environmental Protection to monitor the continuing health of new sites.  However, a NYS DEC official told me that sponsors are not legally forced to follow up on a restoration project.  What sort of oversight is that?     US Army Corps Engineer Dr. Robert Brumbaugh writes that "almost all [mitigation] banks established have been ad hoc arrangements between regulators and development entities."  The impermanence of these arrangements do not inspire confidence.   Although regulators are supposed to assess the comparability of the sacrificed wetland to the new one, Dr. Brumbaugh adds, "Owing to limitations in wetland functional assessment methodology, to date, in many cases, credits and debits have been measured simply in terms of acres."   In other words, the quality and function of the wetland is often left out of the equation.  By neglecting these two aspects, a newly created wetland that was meant to take the place of a built-over one, is likely to fail.

Mitigation banks in Florida.

WHO BENEFITS FROM MITIGATION BANKING?

The benefits of banking for the landowner are obvious: land that was previously off limits can now be used, as long as land elsewhere is slapped into a supposedly suitable condition.  Variations in land values being what they are, this may prove much cheaper for the developer, particularly if he is not conscientious about creating a perfect replica of the original site.   Even the most well-intentioned can find this a forbiddingly difficult task, as each wetland is unique, with plant and animal species that might not thrive anywhere else.  Not every patch of wet ground can be turned miraculously into a viable substitute.

The permitting process is more efficient with banking, as applicants no longer require both a development permit and a wetland permit.  Regulatory agencies save time as there are fewer reviews needed:  many smaller projects are consolidated into larger ones, as recommended by the banking program.  And local officials - Town Boards, Planning Boards - are spared protests from environmentalists as citizens are assuaged by the belief that mitigation’s no-net-loss ideal is preserving our nation’s wild heritage. 

THE DOWNSIDE

This seemingly happy solution to the problem of development versus nature has its critics.  The Sierra Club does not support banking, noting that even "wetland biologists do not have the technical ability to create or restore all the functions of complex wetland systems."

Testifying before a Congressional Subcommittee on Water Resources and the Environment, National Wildlife Federation Wetland Specialist Julie Sibbing, opposed the American Wetlands Restoration Act.    After enumerating the many benefits of wetlands, including flood-water retention, groundwater recharge, water quality improvement, and wildlife habitat, Sibbing noted that the no-net-loss policy does nothing to prevent the breakdown of remaining wetlands.  "America’s wetlands are more vulnerable to destruction and degradation than at any time in the past 25 years."   Sibbing cited several causes for this vulnerability, including "overly broad interpretations of the Clean Water Act loophole." 

The challenge of re-creating a successful eco-system is considerable.  "The idea that you can just go out and build another wetland is one of the myths that has been hardest to let go of," says Sibbing.  "In general, our mitigation efforts have been dismal failures."  (AP article, John Flesher, 12/23/03.)   Additionally, the consolidation aspect of mitigation banking meant that the smaller, isolated wetlands were not really being replaced in kind.  While a large, contiguous wetland sounds nice in theory, the loss of scattered areas could have unanticipated consequences: one suggested by Sibbing was altered flooding patterns, which affects human as well as animal populations.

The balance of water, appropriate soil types, and equivalent plant species is not always possible at sites that are distant from the original, now destroyed, wetland.  A US Geological Survey Summary on Water Resources identified another potential problem: people might actually be encouraged to destroy natural wetlands if they are misled into thinking they can be easily replaced.  The cheerful assumption of enhanced ecological value via mitigation banking is therefore rendered dubious.

 Compensation through mitigation banking, originally intended as only the third leg of the preservation process, is becoming more prevalent.  From 46 approved banks chartered nationwide in 1992, the industry had grown to nearly 300 by 2001.  In Florida, alone, there are at this time 38 banks in existence.  A financial success, perhaps, but to what effect on our natural treasures? 

The impact of mitigation banking on wildlife is difficult to determine precisely, but logic may provide a reasonable interpretation.  One likely result of the trading of wetland areas   - credit here, debit someplace else - would be the disorientation and consequent dispersal of the traditional wild inhabitants of any given region and an eventual decrease in their number.  We need only picture how we would react to having our neighborhood suddenly vanish.  There would be no comfort in being told there is a "similar" habitat 20 miles away replete with residents who would not want to be displaced!

Just as animal species suffer from the man-made changes to their natural environments, so also do irreplaceable plant species disappear from our national landscape.  And the failure rate of man-made wetlands is shocking.  Consider as just one example, in the state of Michigan only 22 percent of authorized projects were deemed successful judging by natural functions such as water purification and wildlife habitat.  Yet, mitigation banking is still a common and government-approved fact of life in 34 states.

Whenever economic and natural-resources considerations collide, you may generally depend upon the former to triumph at the expense of the latter.  When regulatory agencies seem to collude with private groups, it is very dispiriting.  For example, the St. John’s River Water Management District, which covers a huge part of Northeast Florida, is currently considering the request of a Baptist Church that wants to build a bridge over the headwaters of the Tomoka River, thus filling in a pristine wetlands area.   The church proposes to buy land from a mitigation bank some miles away, as payment for their construction, which, environmentally-concerned opponents of the project contend, will naturally do nothing to preserve the Tomoka River itself.  At issue here are the rather suspect standards of the agency.  As the SJRWMD has said that the project meets their requirements, one must ask why those requirements are so lenient that they would permit the blocking of an important tributary to the Tomoka.  As local citizen, Capt. Eric West, put it, "The land bank doesn’t make new wetlands, it just keeps profits coming in for those who own them now."  He suggests rewriting the rules of SJRWMD to make it harder for people to take advantage of the present, slipshod situation that easily allows ruination of wetlands.

A Florida environmental attorney, Lesley Blackner, doubts the wisdom of elected officials, too many of whom, she says, "define ‘public interest’ as keeping the development industry happy."  She advocates that people have the power to decide on land use changes in their own communities.   Blackner maintains that the mitigation system is a kind of "shell game," sold to the public as way of saving our wetlands, but in reality merely a sham, causing the destruction of healthy habitats and setting up false substitutes.

WHAT CAN WE DO?

An amendment to the Federal Water Pollution Control Act, a bill which deals with the chartering of mitigation banks, was introduced in June of 2003, and is still pending.  H. R. 2531 IH may be reintroduced in the next Congress, commencing in January.  If we wish to have any influence on the survival of our inherited wetlands, and protect the lives of their many dependents, we must call and write to our Representatives now, expressly stating our concerns regarding the use of mitigation banking.   We can keep informed about local plans for wetland development, and attend Town and Planning Board meetings, speaking up and asking for details on such plans; and requiring that any mitigation bank providers, whether commercial or municipal, be monitored by the relevant agency.  And don’t assume that regulatory agencies, however much they might speak about being "good stewards of the environment," are doing what is best for wildlife and wetlands.  Their standards should be reviewed before they give out any more permits for destruction.  Only by consistent and vociferous action can we hope to ensure the survival and maximum health of our precious wetlands and their residents.

References used for this article:

US House of Representatives website  -   Sept. 12, 2001 Hearing on HR 1474 Before Subcommittee on Water Resources and the Environment; Statement of Julie M. Sibbing of NWF

US Geological Survey, Water-Supply Paper #2425

US Environmental Protection Agency, Laws, Regulations, Guidance, and Scientific Documents: "Wetlands Mitigation Banking"

Florida Dept. Of Environmental Protection website

University of Florida IFAS, Handbook of Florida Water Regulation

Department of the Army, Federal Register: November 28, 1995 (Volume 60, #228)

US Army Corps of Engineers, Jacksonville, Fla. District, Public Notice web page: "Mitigation Banking"

Washington State Department of Ecology, Access Washington: "Wetlands Mitigation Banking"

Univ. of Oregon, School of Law, Ocean and Coastal Law Memo, Issue 36, October 1990

Great Lakes Directory website, Great Lakes Article: "Creating New Wetlands Not So Easy to Do," by John Flesher of Assoc. Press

National Wildlife Federation website, Testimony on Mitigation Banking before House Sub-Committee on Water Resources and the Environment, Sept. 12, 2001

Sierra Club website, "Clean Water and Wetlands:  Mitigation Banking Guidelines"

Alachua Post (online newspaper) - Ad Hoc Committee, 4/26/02

Mike Salinero, Tampa Tribune article, Aug. 29, 2004, "Feds Probe on Wetlands Permits"

Statement of Lesley Blackner in Support of Florida’s Hometown Democracy Amendment  

E.M. FAY is a freelance writer with a bent for environmental and animal-rights causes, as well as politics.  She has worked as a stringer for the Daily Freeman, a leading newspaper in Kingston, NY.  She presently has an article about whales' and dolphins' suicides caused by man in Natural Life, a Canadian magazine.  

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