Avoiding Another Taxpayer Bailout

The ongoing debate about the expanded use of mitigation banks and efforts to establish guidelines for mitigation banking fail to ask the most important question: will the cost to the bank operator of providing mitigation credits be less than, equal to, or greater than the value of mitigation credits to potential wetland develops? The answer to this question will determine the fundamental laws of supply and demand that will govern wetland mitigation banking. Until we find out more about the costs of wetland creation and restoration, which will determine the supply of mitigation credits, and the relative profitability of wetland development, which will determine the demand for mitigation credits, we have no basis for assessing when and where mitigation banks can succeed without government subsidies.