Background:
On March 31, 2008, the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency released a Final Rule governing compensatory mitigation to offset losses due to the permitted filling of wetlands and other waters of the United States. The rule establishes equivalent mitigation planning requirements for all three types of compensatory mitigation: mitigation banks, arrangements for the payment of fees in lieu of mitigation (“in-lieu fee mitigation”), and mitigation projects carried out by the permittee. New requirements include the requirement to provide financial assurances that all projects will be “successfully completed,” a new preference for using mitigation bank credits to satisfy compensatory mitigation requirements, and a framework for using a watershed approach to make compensatory mitigation decisions.
The rule was issued in response to a line item in the 2004 National Defense Authorization Act (PL 108-136), which directed the Secretary of the Army to promulgate regulations on compensatory mitigation. The bill stated that “To the maximum extent practicable, the regulatory standards and criteria shall … apply equivalent standards and criteria to each type of compensatory mitigation.”
Statement from Jessica Wilkinson, Director, Wetlands Program, Environmental Law Institute:
“The federal agencies have spent the past twenty-plus years working to improve the effectiveness of compensatory mitigation in replacing lost wetland acres and the important natural functions they provide. This rule strengthens regulatory requirements for all three compensatory mitigation mechanisms and addresses several areas of policy that have not received adequate attention to date, including stream mitigation, ecological performance standards, and the watershed approach.
“Although compensatory wetland mitigation accounts for a significant annual investment in habitat restoration and protection, amounting to nearly $3 billion annually in public and private dollars, existing forms of compensatory mitigation have often fallen short. Many projects have not effectively proven to replace the functions that federal permits have allowed applicants to destroy – wildlife habitat, flood control, carbon sequestration, storm attenuation, and water filtration functions. These functions will become increasingly important in the face of a changing future climate.
“Regulators should now strengthen their efforts to encourage the avoidance and minimization of impacts to wetlands. Having focused on reform of the compensatory mitigation regime, federal agencies and their conservation partners must devote equal intellectual energy, engineering expertise, and the power of the marketplace to measures that avoid impacts to wetlands in order to protect the country’s remaining vulnerable wetland resources.“
Jessica Wilkinson can be reached at (202) 558-3100 or wilkinson@eli.org. For more on Ms. Wilkinson, see: http://www.eli.org/About/mediaguidedetail.cfm?ID=12.
For additional information, see:
- Bean, Michael, Rebecca Kihslinger and Jessica Wilkinson. February 2008. Design of U.S. Habitat Banking Systems to Support the Conservation of Wildlife Habitat and At-Risk Species. Washington, DC: Environmental Law Institute. Review of the existing findings and research on the administrative and ecological performance of compensatory mitigation. The authors find that this body of literature reveals that mitigation projects across the country often fail to comply with their permit conditions and, even more frequently, fail to replace lost wetland acres and functions.
- Environmental Law Institute. October 2007. Mitigation of Impacts to Fish and Wildlife Habitat: Estimating Costs and Identifying Opportunities. Washington, DC: Environmental Law Institute. ELI estimates that the annualized cost of compensatory mitigation conducted under the key federal programs nationwide is approximately $3.8 billion. Over $2.9 billion of this $3.8 billion — over 77 percent of the estimated annual expenditures on compensatory mitigation — is generated through the mitigation requirements of Section 404 of the Clean Water Act.
- Wilkinson, Jessica and Jared Thompson. April 2006. 2005 Status Report on Compensatory Mitigation in the United States. Washington, DC: Environmental Law Institute. Summary of compensatory mitigation trends across the country, incl