Wetland Mitigation Banks

Wetlands serve an important role in the ecological health of the nation by helping to control flooding, improve water quality, and provide important wildlife habitat.

Congress added Section 404 to the Water Pollution Control Act of 1972 (now the Clean Water Act) specifically to preserve wetlands adjacent to lakes, estuaries, rivers, and streams, and to maintain their water quality-enhancing benefits.

As early as the 1980s, growing pressures of development and an accelerating decline of wetlands nationwide led to a federal policy of "no net loss" of wetlands acreage. Mitigation is a way to replace wetlands that are filled in or otherwise lost through development with newly created or enhanced wetlands in another location.

According to federal law, mitigation is an option only after development in wetland areas is avoided or minimized as much as possible. Early on, agencies and developers attempted to mitigate for wetlands loss with their own smaller, on-site properties. As these early attempts proved unsatisfactory, a consensus grew in the 1990s for the concept of "mitigation banking," which focuses on preserving the important functions and natural values of wetlands on larger, contiguous properties with a greater potential for long-term success. In 2008, the U.S. Army Corps of Engineers and Environmental Protection Agency (EPA) issued a final rule that establishes a preference for mitigation banking when compensatory mitigation is required. A wetlands mitigation bank also benefits developers by streamlining the permitting process. As compared to "permittee-responsible mitigation," a mitigation bank gives developers, utility providers, and state and local governments the opportunity to satisfy their statutory wetland mitigation requirements by paying a predictable, one-time fee for credits. The permit-holder assumes no long-term monitoring or maintenance obligations. The bank operator is responsible for monitoring and maintenance, and for ensuring the sustainability of the mitigation bank.

• Mitigation banking is considered a superior option when compared to project-by-project or "permittee-responsible mitigation" on smaller, often isolated tracts.
• Mitigation banking leads to better-organized planning and consolidation of habitat, and encourages a long-term commitment to wetland protection. 
• Larger tracts provide greater floodplain storage, support a greater diversity of habitat and wetland functions, and give wildlife room to roam freely. 
•  By creating the mitigation bank BEFORE development impacts occur, the mitigation bank helps prevent temporary losses of important wetland functions and values.

The Environmental Protection Agency describes wetlands as “our vital link between land and water.”

Also referred to as marshes, bogs or swamps, wetlands are among the most diverse and productive of ecosystems, and perform many important functions that benefit both people and wildlife. Wetlands collect and store stormwater, filter and purify that water, provide habitat for birds and other animals, include a wide diversity of specialized plant life, and are often beautiful as well. Wetlands are highly productive natural communities and provide habitat and food resources for a wide range of species. Wetlands have a high level of nutrients and, coupled with the availability of water, they provide ideal habitat for fish, amphibians, shellfish and insects. Additionally, many birds and mammals rely on wetlands for food, water, breeding grounds and shelter.

An area must be inundated or saturated with water at least part of the year to qualify as a wetland. There are several types of wetlands, classified by factors such as salinity, mineral or organic soil type, and the plants and animals found there. For example, there are both salt- and freshwater wetlands. Some wetlands are covered by trees and grasses, others by floating-leaf plants and open water.

To be called a wetland, an area must be filled or soaked with water at least part of the year. Depending on the type of wetland, it may be covered with trees, grasses, shrubs or moss. Some grassy wetlands are actually dry at certain times of the year.

Like the many endangered species that count on this highly variable ecosystem for their survival, wetlands themselves are endangered by development and over-use. They can be drained and paved over for construction, polluted by urban run-off, or stripped of resources for their fish and fuel. With wetlands shrinking around the world, including in the United States, mitigation banking provides an opportunity to counter an unfortunate ecological trend.

Similar to a typical bank, where money is stored and protected, a wetlands mitigation bank is a consolidated area in which valuable environmental resources are created, restored, enhanced or preserved. A mitigation bank offers the increase of wetlands (credits) as a replacement for wetlands that will be impacted or destroyed by future projects (debits). When compared to a series of fragmented, smaller wetlands, a consolidation of wetlands in a mitigation bank provides a greater diversity of habitat, preserves natural areas, creates a more sustainable system, and increases overall effectiveness of wetland functions.

Mitigation banks are composed of the site itself; a formal agreement between the bank owners and government regulators; an Interagency Review Team to provide review and oversight; and a geographical service area in which permitted wetlands impacts can be exchanged for bank credits. The Greens WetBank, for example, has been permitted and in operation since its Memorandum of Agreement was signed by the Flood Control District, the U.S. Army Corps of Engineers and other regulatory agencies in 1995.