Design of US Habitat Banking Systems to Support the Conservation ...

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Wetland and Conservation Banking in DetailWetland and Conservation Banking in DetailGeneral overviewThe Origins of Habitat BankingThe origins of habitat banking can be traced, at leastin part, to the perception that traditional approachesto mitigation had often produced unsatisfactoryresults. For example, traditional mitigation for smallprojects often yielded “postage-stamp” mitigationsites at or very close to the project site. These siteswere often isolated from other ecologically significantareas and too small to manage and oversee efficiently.Habitat banking, its proponents claimed, offered abetter opportunity to aggregate mitigation effortsat larger sites in a manner that afforded ecological,administrative, and financial efficiencies.Traditional mitigation efforts were also often carriedout concurrently with the project for which theywere to mitigate, or even after the permitted impactshad occurred, leading to temporal losses of habitatacreage and function. If the mitigation effort failed,as was frequently the case, regulators were left withfew options to rectify the failure. Here again, bankingproponents pointed to a potential advantage ofconsolidated mitigation. They claimed that bankingprovided a better mechanism to ensure the success ofmitigation efforts in advance of the negative impactsthat required mitigation.Habitat banking offered at least one other favorableattribute. It offered private landowners an opportunityto profit by investing in conservation activities ontheir land and then selling the credits they earnedfrom their investment to third parties in need of mitigationcredits. For the landowners, banking offereda means of turning a resource like a wetland or anendangered species into a potential asset rather thana liability. For the buyers, banking increased the rangeof available mitigation options.Whether habitat banking in practice accomplishesthe benefits suggested by the theory is a subject ofactive debate. Perhaps more important than whetherhabitat banking works as well as its proponents claimit does is whether it works better than other forms ofmitigation. These other forms of mitigation includenot only traditional, project-by-project, permitteeresponsiblemitigation (both on- and off-site), but alsoother third-party compensation mechanisms, such asin-lieu fee mitigation (see Chapter 4, “A Typology ofBanks”). Whether alternative compensatory measuresadequately compensate for authorized resource lossesor whether they compensate as well as banking orother forms of mitigation are also subjects of considerabledebate.Thus far, the various types of habitat banking havebeen discussed as though they were essentiallyinterchangeable. In fact, however, they are not. Thenature of banking associated with particular regulatoryprograms varies depending upon the purposesand policies of those programs. Clarifying some of thekey differences among the various types of banking isanother of the objectives of this report.While efforts to mitigate the impacts of various developmentactions on natural resources have a long history,the practice of habitat banking is of relativelyrecent vintage. Despite its recent origins, habitatbanking, particularly wetland mitigation banking, hasgrown rapidly. Endangered species conservation bankinghas an even shorter history, but is also increasinglycommon. Habitat banking is part of an expandingeffort to harness market forces to accomplishenvironmental goals. Banking has much in commonwith water quality trading, the marketing of carbonoffsets, payments for ecosystem services, and evenenvironmental certification schemes. All recognizethat traditional approaches to pursuing environmentalgoals have not been entirely satisfactory, and all seekto expand the conservation tool box with marketbasedmechanisms. Helping states understand whenand how to use the tool of habitat banking is the primaryobjective of this report.Overview and Status of Wetland MitigationBankingWetland mitigation banking has perhaps the longesthistory of any of the habitat banking programs discussed.Over the past 25 years, the number of anddiversity of wetland banks has increased dramatically.Federal, state, and local banking policies have evolvedto guide the development of these programs.6 Environmental Law Institute
WETLAND AND CONSERVATION BANKING IN DETAILPolicy overviewSection 404 of the Clean Water Act (CWA) prohibitsthe discharge of any dredged or fill material in “watersof the United States,” 1 including wetlands, without apermit. 2 The §404 program is carried out by the Corpswith oversight by the U.S. Environmental ProtectionAgency (EPA). Day-to-day permit processing is carriedout by the Corps’ 38 district offices (see Fig. 1). 3Administration of the §404 program is guided bytwo national goals: (1) the 1972 CWA’s purpose, “torestore and maintain the chemical, physical, and biologicalintegrity of the Nation’s waters,” 4 “including1 33 U.S.C. § 1311; CWA § 301. “’[W]aters of the United States’means (1) All waters which are currently used, or were used inthe past, or may be susceptible to use in interstate or foreigncommerce, including all waters which are subject to the ebb andflow of the tide; (2) All interstate waters including interstatewetlands; (3) All other waters such as intrastate lakes, rivers,streams (including intermittent streams), mudflats, sandflats,wetlands, sloughs, prairie potholes, wet meadows, playa lakes, ornatural ponds, the use, degradation or destruction of which couldaffect interstate or foreign commerce including any such waters:(i) Which are or could be used by interstate or foreign travelers forrecreational or other purposes; or (ii) From which fish or shellfishare or could be taken and sold in interstate or foreign commerce;or (iii) Which are used or could be used for industrial purpose byindustries in interstate commerce; (4) All impoundments of watersotherwise defined as waters of the United States under the definition;(5) Tributaries of waters identified in paragraphs (a) (1)through (4) of this section; (6) The territorial seas; (7) Wetlandsadjacent to waters (other than waters that are themselves wetlands)identified in paragraphs (a) (1) through (6) of this section.”33 C.F.R. § 328.3.2 33 U.S.C. § 1344; CWA §404.3 Congress created the § 404 program in 1972 with authority dividedbetween the Corps and the EPA. The Corps plays the lead rolein the § 404 program through its authority to require and issuepermits for the discharge of dredged or fill material into wetlandsand other waters. The Corps also conducts or verifies jurisdictionaldeterminations and shares enforcement responsibilities with EPA.33 C.F.R. § 325.9. EPA is responsible for developing and interpretingthe environmental criteria used by the Corps to evaluatepermit applications and maintains a review and comment role inthe issuance of § 404 permits. EPA is also responsible for determiningthe geographic scope of jurisdiction and the applicability ofexemptions, approving and overseeing state and tribal assumptionof the permitting program, and shares enforcement responsibilitieswith the Corps. 33 U.S.C. § 1344; CWA § 404. Finally, EPA has theauthority to veto permit decisions under § 404(c), as well as theauthority to elevate permit decisions under § 404(q). 33 U.S.C. §§1344 (c), 1344(q); CWA §§ 404(c), (q).4 33 U.S.C. § 1251(a); CWA § 101(a).wetlands”; 5 and (2) the national goal, set in 1989, ofachieving a “no overall net loss” of wetland acres andfunctions. 6 The national no net loss policy has beenreinforced in subsequent federal wetland compensatorymitigation policy. 7 Because of the difficulty inherentin even measuring, let alone replacing, functions,federal policy suggests that a minimum one-to-oneacreage replacement may be used as a reasonable surrogatefor no net loss of functions. 8The no net loss policy significantly influences how theregulatory agencies make compensatory mitigationdecisions. In particular, the agencies may limit theextent to which they allow permittees to rely on preservationas the sole or even primary mechanism formeeting their compensatory mitigation requirements.Thus, the state wildlife action plans’ primary focus onthe protection of intact, high quality wildlife habitat,rather than the restoration of degraded habitat, mayrestrict the usefulness of the plans in guiding the sitingof wetland mitigation banks. The role of preservationin the wetland compensatory mitigation programis discussed further below (see Chapter 2, “Policyoverview”).5 U.S. Environmental Protection Agency and U.S. Department of theArmy. February 6, 1990. Memorandum of Agreement Between theEnvironmental Protection Agency and the Department of the ArmyConcerning the Determination of Mitigation Under the Clean WaterAct Section 404(b)(1) Guidelines. (Hereinafter Mitigation MOA(1990).)6 The national goal of achieving no net loss of wetland acres andfunctions was first expressed in the report, “Protecting AmericasWetlands: An Action Agenda the Final Report of the NationalWetlands Policy Forum.” 1988. Washington, DC: The ConservationFund. The report recommended that “the nation establish a nationalwetlands protection policy to achieve no overall net loss of thenation’s remaining wetlands base, as defined by acreage and function,and to restore and create wetlands, where feasible, to increasethe quality and quantity of the nation’s wetlands resource base.” OnJune 6, 1989, President H.W. Bush officially articulated no net lossas a national policy goal in a speech to Ducks Unlimited.7 Mitigation MOA (1990); U.S. Army Corps of Engineers and USEnvironmental Protection Agency. December 24, 2002. Guidanceon Compensatory Mitigation Projects for Aquatic Resource ImpactsUnder the Corps Regulatory Program Pursuant to Section 404 of theClean Water Act and Section 10 of the Rivers and Harbors Act of1899. Regulatory Guidance Letter No. 02-2. (Hereinafter RGL 02-2(2002).)8 RGL 02-2 (2002).Design of U.S. Habitat Banking Systems to Support the Conservation of Wildlife Habitat and At-Risk Species 7
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Page 7 and 8: EXECUTIVE SUMMARYExecutive SummaryA
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Page 29 and 30: STATE WILDLIFE ACTION PLANSshed). C
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A DETAILED LOOK AT WETLAND AND CONS
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ConclusionsConclusionsThis report c
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CONCLUSIONSsuch as habitat conserva
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CONCLUSIONSthe state Attorney Gener
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CONCLUSIONSGeneral RecommendationsF
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AppendicesA. Federal Wetland Compen
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APPENDIX AProjects for Aquatic Reso
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APPENDIX Aland mitigation banks, um
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APPENDIX BMemphis District, U.S. Ar
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APPENDIX BJacksonville District, U.
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Appendix CAppendix CState Wetland M
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APPENDIX CState Statute(s) Regulati
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Appendix DAppendix DState Conservat
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APPENDIX Emitigation banking and ha
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APPENDIX EDelaware (Phase IV)Delawa
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APPENDIX Estaff intend to make the
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APPENDIX EMitigation banking regula
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APPENDIX EMississippi (Phase IV)The
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APPENDIX ENew Mexico (Phase III)The
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APPENDIX Eand mitigation banking. 1
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APPENDIX EVirginia (Phase III)Virgi
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APPENDIX Egation bank may be used t
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APPENDIX FGeorgiaGeorgia Department
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Appendix GWETLAND MITIGATION BANKIN
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APPENDIX GWETLAND MITIGATION BANKIN
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APPENDIX GErwin, K.L. 1991. An Eval
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APPENDIX GPorej, D. 2004. Faunal As
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Appendix HAppendix HBibliography of
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APPENDIX HEcosystem Marketplace, Sp
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APPENDIX ILegal and Financial Mecha
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