Mitigation banking

[1] It involves a system of mitigation banks, sites where projects to restore, create, or enhance wetlands can be carried out in advance of impacts.

[2] This process is generally conducted with the aim of achieving no net loss of function and value for specific aquatic habitats, such as in terms of the biodiversity or ecosystem services provided by a wetland.

[8] Where a wetland is described as "manipulated", this might mean that it has been drained, dredged, filled, levelled, or altered in some other way to allow agriculture or development to take place on the site.

Unavoidable adverse impacts are negative effects on wetlands that cannot reasonably be avoided or minimised, therefore requiring compensatory mitigation.

[11] Compensatory mitigation includes measures to restore, create, enhance, and preserve wetlands to offset unavoidable adverse impacts.

[13] In the United States, federal agencies (under section 404 of the Clean Water Act (CWA)), as well as many state and local governments, require compensatory mitigation (described as biodiversity offsetting in other countries) for the disturbance or destruction of wetland, stream, or endangered species habitat.

To receive the permit, applicants might be required to compensate for the environmental impacts of their proposed activities, including by purchasing credits from a mitigation bank.

Mitigation banking is administered and regulated by the US Environmental Protection Agency and the US Army Corps of Engineers (USACE).

[1] A policy of "no net loss" of habitat value and function has been used as the objective for mitigation banking in the United States since the 1990s.

In some cases, wetland mitigation programs have been approved based on total area rather than in terms of equivalence of ecological function.

These credits can then be purchased as a way for individuals or entities to compensate for negative impacts that cannot otherwise be avoided or minimised.

[21] Credits are units of exchange defined as the ecological value associated with converting a naturally occurring wetland or other specific habitat type, for economic purposes.

[30] Under Section 404 of the CWA, a permit from the US Army Corps of Engineers is required to conduct certain activities that may impact wetlands.

The developer must submit a Public Notice to their respective district of the US Army Corps of Engineers (USACE) requesting to carry out a project and associated ecological impacts on a wetland.

[33] For example, the Fina La Terre in Louisiana, signed off in 1984 and proposed by a private company, was one of the first mitigation banks in the country.

[41] However, state and regional studies on wetland compensatory mitigation suggest that a significant portion of compensation sites are failing to meet administrative and ecological performance standards, according to the Environmental Law Institute.

[44][45] This may include a dedicated trust fund to finance the continued long-term management of the site for mitigation banking.