Mitigation and Conservation Banks: A Comprehensive Overview

 
 
Presented at
Dialogos de Biodiversidad -
Compensaciones Ambientales
 
 
Bogota, Colombia  May 22,2014
By
Wayne White
President, National Mitigation Banking Association
Wildlands
 
o
Mitigation Implementation
 
o
Hierarchy
o
Avoid
o
Minimize
o
Mitigate unavoidable, residual impacts
 
o
Compensatory Mitigation
o
Permittee responsible mitigation
o
In lieu fee program
o
 
Banks
 
 
 
o
The experience and scientific expertise of the NRC
study panel’s 
most important finding was that the
market-driven, incentive-based wetland mitigation
banking program had outperformed both in-lieu fee
mitigation and permittee-responsible mitigation
 
o
No Equivalency Standard
 
o
What is a mitigation/conservation bank?
o
Regulations require mitigation/offsets
o
Evolution of US banking
o
Benefits of banks-
o
Agency requirements for bank approval
o
Service area and credits
o
Offsets around the world
o
Key messages
o
Principles of mitigation and recommendations
 
 
 
“A 
site or suite of sites containing natural resource
values that are conserved and managed in
perpetuity for specified listed or other at-risk
species and used to offset impacts occurring
elsewhere to the same type of resource.”
o
Pre-approved
 
Land-
owner
Agency
CE Holder
$ Holder
Land Mgr
Broker
Tribes
Local
Gov’t
Agency
Agency
 
         
Federal Government
o
     Clean Water Act- Sec 404
o
 
(No-net loss: Mitigation banks)
o
      Endangered Species Act- Sec 7
o
 
(BO’s: Conservation banks)
o
      Natural Resource Damage Assessment
 
(Restoration to offset impacts)
State and local Governments
o
      Varies- water, protected species and
 
natural resources
 
Restore and maintain the chemical,
physical, and biological integrity of the
Nation’s waters.
No Net Loss Policy 
(1989)
 
Permit from USACE or State
Avoid, Minimize, Compensate impacts
 
Compensatory Mitigation:
Bank over In-Lieu fee over PRM
Clear policy regulation over time
Creation/Restoration over Preservation
 
…provide a means whereby the ecosystems
upon which endangered and threatened
species depend may be conserved…
Unlawful to “take
 
Permit from FWS or NMFS
Avoid, Minimize, Mitigate impacts
 
Compensatory Mitigation:
No clear mitigation type preference
No overall mitigation policy
Depends on species needs
 
 
1972
Clean Water Act and Endangered Species Act
Required permit to fill wetlands
1973
Endangered Species Act
Prohibited take of listed species
 
Both Acts require offsets but
    no directive or cookbook on how 
to
NO MITIGATION POLICY
 
 10 years later
FWS memo recognizing mitigation banking
 
12 years later
 First wetland mitigation bank approved
 
17 years later
No net loss policy but no guidance
 
19 years later
 First conservation bank established
 
 
 
 
23 years later
Federal Guidance on Establishment Mitigation Banks
 
30 years later
 FWS Guidance (Policy) for  Conservation Banks
 
 36 years later
“New” Wetland Mitigation Rule
 
41 years later
FWS Developing mitigation policy for all authorities
 
 
 
 
o
Biodiversity further reduced- low quality
offsets not meeting ecology goals
o
More endangered species- further loss of
habitat
o
Greater conflict between project and
biodiversity over time
o
More polarization and activist groups
o
Project planning lack guidance for designing
offsets; increasing permitting time
o
Increasing costs
 
 
 
    Biological Benefits
Aid in recovery
(outcome-based &
traceable)
Preserve ecosystems
Avoid piecemeal
mitigation & temporal
habitat losses
Contributes to
conservation strategies;
science
 
    Business Benefits
Streamlined
permit/mitigation
process
Transfer of liability
Provides assurances
(mgmt, financial)
Reduce agency time
monitoring mitigation
sites
Reduce need for
enforcement
For-profit conservation
Vernal Pool
Tadpole Shrimp
 
o
Private sector investment to conserve habitat
not consume habitat- 
For profit investment  to
conservation biodiversity!
o
Provides potential new economic engine for
private landowner who want to maintain
ownership
o
Assist implementation of regional conservation
planning efforts and recovery of endangered
species
o
Severance of liability
 
Financial mechanism
sufficient to fund long-
term management,
monitoring and reporting
(non-wasting endowment
preferred)
 
Perpetual
Conservation
Easement
(or alternative for
public lands)
 
Long-term
Management Plan
with Performance
Standards,
Monitoring, etc.
Legal/Real Estate
Financial
Biological
 
Mitigation/Service Area 
= the geographic
area within which offsets can occur
o
Defined by the Agencies
o
Based on the conservation needs of the species:
 
1000
hectares
habitat
1
credit
 
=
 
1
pair
1
credit
 
=
1
credit
 
=
 
o
Australia- 1) NSW Biobanking in 1995 law.  Mixed
results; 450 hectares conserved so far; 2) Victoria
BushBroker. Uses Habitat Hectare metric, market
place for developers and landowners; mostly
successful
o
UK- Biodiversity Offsetting in England  9/13
o
Germany- ILF to local jurisdictions may lack in-
kind offsets plus true cost to mitigate questionable
o
India- Some legislative policy but lacks clarity and
guidance; not successful
o
Chile- Legislation requiring offsets; developing
processes and policies
 
o
Habitat Banking in Latin America and
Caribbean- A Feasibility Assessment- specific
discussion of potential market in Colombia
o
Business and Biodiversity Offset Program-
providing mitigation hierarchy with an
emphasis on biodiversity offset guidance and
standards consideration for corporations and
governments
 
o
Species Conservation Strategy
o
Compensatory mitigation should be based on a larger
landscape conservation strategy for the species and lead
towards a net conservation benefit.
o
Must develop Compensatory Mitigation 
policy
o
Have one standard for compensatory mitigation and
implement it consistently for all forms of  mitigation. Use
mitigation plans and programmatic agreements when possible.
o
Distance from Impact Site
 and Credit Methodologies
o
Careful selection of distance from impact site (or service areas
for banks) and simple credit methodologies based on balance
between needs of species and mitigation program.
o
Program Process/Timelines
o
Policy or guidance on how the compensatory mitigation will
operate, education of personnel, legal review, templates,
tracking, etc.
 
 
o
 
Assure
 appropriate offsets are implemented
that benefit the conservation of species and
habitat
o
 
Provide a strong biological, financial and
legal framework for offsets to persist for the
length of the impact  
consistently
o
Landscape 
scale implementation
o
 
Communicate to all stakeholders the basic
provisions expected of them in any situation
where mitigation is required.
 
o
Mitigation projects must contain strong
performance 
assurances that restoration,
enhancement, creation or preservation
activities will be completed as required 
in
perpetuity
.  This would include a 
mix of legal
and economic assurances
 
including support for
the premise that mitigation 
done in advance of
impacts 
is preferable to mitigation done after
the fact.
 
o
Standards and metrics 
should be used
consistently for permits involving mitigation.
These standards and metrics should apply for
permanent or temporary impacts
 
.  Metrics
should provide 
meaningful information 
about
particular species and habitat characteristics.
Standards must also insure 
measurable and
lasting benefit  
using the same ecological
criteria and metric that are used to measure
impacts.
 
o
Offset proposals should take into account large
scale 
conservation strategies
.   High priority
habitats should be protected using the
mitigation hierarchy
- avoid, minimize then
mitigate residue, unavoidable impacts.  Low
priority habitat less avoidance.  
Like-for-like
offsets
 or trading up when fully justified.
 
o
Review existing regulatory framework
o
Establish policy and regulatory foundation with
clearly defined processes (
scientific, legal and
financial
) and timelines
o
Integrating with existing permitting processes
o
Build capacity to implement mitigation policy
o
Equivalency for types of mitigation – banks, in lieu fee.
permittee responsible
o
Strive for high standards
o
Preference for banks over in lieu fee or permittee
responsible mitigation supported by US studies
o
Minimize the number of agencies
 
Legal
o
Offsetting measures will guarantee the
effective conservation or ecological restoration
of an equivalent ecological area, where it is
possible to generate a new management
category, a permanent conservation strategy or
where the biodiversity conditions are
improved in areas that have been negatively
transformed or subject to transformation
processes.
 
Scientific
o
To qualify must address three fundamental
aspects:
o
a) How much to offset in terms of area
o
b) Where the offset should be carried out
o
c) How to offset and what type of action to
perform
 
Financial
o
Establish a financial management framework (trust
fund or other), that guarantees the design,
implementation and control of the management
plan, in accordance with the mechanisms provided
by law.
o
Enter into an agreement with the user and an
established fund for the management and
execution of the funds.
o
Direct execution of the funds with the possibility
of establishing a contract or agreement for a non-
governmental organization or consulting firm to
execute the funds.
 
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This content presents insights from Wayne White, President of the National Mitigation Banking Association, regarding the concept of mitigation/conservation banks, their evolution, benefits, agency requirements, and the principles behind their establishment. It emphasizes the importance of market-driven wetland mitigation banking programs and outlines the key role these banks play in offsetting environmental impacts. The content also discusses the regulatory frameworks governing mitigation banks and their significance in conserving natural resources for at-risk species.


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  1. Presented at Dialogos de Biodiversidad - Compensaciones Ambientales Bogota, Colombia May 22,2014 By Wayne White President, National Mitigation Banking Association Wildlands

  2. o Mitigation Implementation o Hierarchy o Avoid o Minimize o Mitigate unavoidable, residual impacts o Compensatory Mitigation o Permittee responsible mitigation o In lieu fee program o Banks

  3. o The experience and scientific expertise of the NRC study panel s most important finding was that the market-driven, incentive-based wetland mitigation banking program had outperformed both in-lieu fee mitigation and permittee-responsible mitigation o No Equivalency Standard

  4. What is a mitigation/conservation bank? o Regulations require mitigation/offsets o Evolution of US banking o Benefits of banks- o Agency requirements for bank approval o Service area and credits o Offsets around the world o Key messages o Principles of mitigation and recommendations o

  5. A site or suite of sites containing natural resource values that are conserved and managed in perpetuity for specified listed or other at-risk species and used to offset impacts occurring elsewhere to the same type of resource. o Pre-approved Net Conservation Benefit Offset Unavoidable Impacts

  6. Market-based 3rdparty System Agency Agency Agency Tribes Local Gov t Review Team Agency Agency Agency Scientific Community Bank Bank Bank Broker Bank Sponsor Buyer Buyer Banker Banker Buyer Land- owner Land Mgr CE Holder $ Holder

  7. Federal Government o Clean Water Act- Sec 404 o (No-net loss: Mitigation banks) o Endangered Species Act- Sec 7 o (BO s: Conservation banks) o Natural Resource Damage Assessment (Restoration to offset impacts) State and local Governments o Varies- water, protected species and natural resources

  8. Clean Water Act 1972 Endangered Species Act 1973 Restore and maintain the chemical, physical, and biological integrity of the Nation s waters. provide a means whereby the ecosystems upon which endangered and threatened species depend may be conserved No Net Loss Policy (1989) Unlawful to take Permit from USACE or State Avoid, Minimize, Compensate impacts Permit from FWS or NMFS Avoid, Minimize, Mitigate impacts Compensatory Mitigation: Bank over In-Lieu fee over PRM Compensatory Mitigation: No clear mitigation type preference No overall mitigation policy Depends on species needs Clear policy regulation over time Creation/Restoration over Preservation

  9. 1972 Clean Water Act and Endangered Species Act Required permit to fill wetlands 1973 Endangered Species Act Prohibited take of listed species Both Acts require offsets but no directive or cookbook on how to NO MITIGATION POLICY

  10. 10 years later FWS memo recognizing mitigation banking 12 years later First wetland mitigation bank approved 17 years later No net loss policy but no guidance 19 years later First conservation bank established

  11. 23 years later Federal Guidance on Establishment Mitigation Banks 30 years later FWS Guidance (Policy) for Conservation Banks 36 years later New Wetland Mitigation Rule 41 years later FWS Developing mitigation policy for all authorities

  12. o Biodiversity further reduced- low quality offsets not meeting ecology goals o More endangered species- further loss of habitat o Greater conflict between project and biodiversity over time o More polarization and activist groups o Project planning lack guidance for designing offsets; increasing permitting time o Increasing costs

  13. Economies of Scale Biological Benefits Aid in recovery (outcome-based & traceable) Preserve ecosystems Avoid piecemeal mitigation & temporal habitat losses Contributes to conservation strategies; science Vernal Pool Tadpole Shrimp Business Benefits Streamlined permit/mitigation process Transfer of liability Provides assurances (mgmt, financial) Reduce agency time monitoring mitigation sites Reduce need for enforcement For-profit conservation

  14. o Private sector investment to conserve habitat not consume habitat- For profit investment to conservation biodiversity! o Provides potential new economic engine for private landowner who want to maintain ownership o Assist implementation of regional conservation planning efforts and recovery of endangered species o Severance of liability

  15. Process procedures timelines Biological Legal/Real Estate Financial CBA the legal document for the establishment, operation and use of a conservation bank Perpetual Conservation Easement (or alternative for public lands) Financial mechanism sufficient to fund long- term management, monitoring and reporting (non-wasting endowment preferred) Long-term Management Plan with Performance Standards, Monitoring, etc.

  16. Conservation strategy Mitigation/Service Area = the geographic area within which offsets can occur o Defined by the Agencies o Based on the conservation needs of the species:

  17. Simplify Credits Credits = Surrogate Measures for Recovery Hectares/ Meters 1000 hectares habitat 1 = credit 1 Individuals 1 = credit pair o r or Time-Based? Weighted Function 1 Salmon Credit (Sc) Equation ( * Lnb S = credit ( ) ( ( ) 5 . 0 * ) ) ( ) + * S Lpb = Sc fp fp

  18. o Australia- 1) NSW Biobanking in 1995 law. Mixed results; 450 hectares conserved so far; 2) Victoria BushBroker. Uses Habitat Hectare metric, market place for developers and landowners; mostly successful o UK- Biodiversity Offsetting in England 9/13 o Germany- ILF to local jurisdictions may lack in- kind offsets plus true cost to mitigate questionable o India- Some legislative policy but lacks clarity and guidance; not successful o Chile- Legislation requiring offsets; developing processes and policies

  19. o Habitat Banking in Latin America and Caribbean- A Feasibility Assessment- specific discussion of potential market in Colombia o Business and Biodiversity Offset Program- providing mitigation hierarchy with an emphasis on biodiversity offset guidance and standards consideration for corporations and governments

  20. Species Conservation Strategy o Compensatory mitigation should be based on a larger landscape conservation strategy for the species and lead towards a net conservation benefit. Must develop Compensatory Mitigation policy o Have one standard for compensatory mitigation and implement it consistently for all forms of mitigation. Use mitigation plans and programmatic agreements when possible. Distance from Impact Site and Credit Methodologies o Careful selection of distance from impact site (or service areas for banks) and simple credit methodologies based on balance between needs of species and mitigation program. Program Process/Timelines o Policy or guidance on how the compensatory mitigation will operate, education of personnel, legal review, templates, tracking, etc. o o o o

  21. o Assure appropriate offsets are implemented that benefit the conservation of species and habitat o Provide a strong biological, financial and legal framework for offsets to persist for the length of the impact consistently o Landscape scale implementation o Communicate to all stakeholders the basic provisions expected of them in any situation where mitigation is required.

  22. o Mitigation projects must contain strong performance assurances that restoration, enhancement, creation or preservation activities will be completed as required in perpetuity. This would include a mix of legal and economic assurances including support for the premise that mitigation done in advance of impacts is preferable to mitigation done after the fact.

  23. o Standards and metrics should be used consistently for permits involving mitigation. These standards and metrics should apply for permanent or temporary impacts . Metrics should provide meaningful information about particular species and habitat characteristics. Standards must also insure measurable and lasting benefit using the same ecological criteria and metric that are used to measure impacts.

  24. o Offset proposals should take into account large scale conservation strategies. High priority habitats should be protected using the mitigation hierarchy- avoid, minimize then mitigate residue, unavoidable impacts. Low priority habitat less avoidance. Like-for-like offsets or trading up when fully justified.

  25. o Review existing regulatory framework o Establish policy and regulatory foundation with clearly defined processes (scientific, legal and financial) and timelines o Integrating with existing permitting processes o Build capacity to implement mitigation policy o Equivalency for types of mitigation banks, in lieu fee. permittee responsible o Strive for high standards o Preference for banks over in lieu fee or permittee responsible mitigation supported by US studies o Minimize the number of agencies

  26. Legal o Offsetting measures will guarantee the effective conservation or ecological restoration of an equivalent ecological area, where it is possible to generate a new management category, a permanent conservation strategy or where the biodiversity conditions are improved in areas that have been negatively transformed or subject to transformation processes.

  27. Scientific o To qualify must address three fundamental aspects: o a) How much to offset in terms of area o b) Where the offset should be carried out o c) How to offset and what type of action to perform

  28. Financial o Establish a financial management framework (trust fund or other), that guarantees the design, implementation and control of the management plan, in accordance with the mechanisms provided by law. o Enter into an agreement with the user and an established fund for the management and execution of the funds. o Direct execution of the funds with the possibility of establishing a contract or agreement for a non- governmental organization or consulting firm to execute the funds.

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