Wetland Mitigation Banking Shortchanges Urban Areas

In a study highlighted in the National Wetlands Newsletter, J.B. Ruhl and James Salzman show that wetland mitigation banking redistributes wetlands from urban areas to rural ones, leaving urban residents with less access to important ecological services provided by wetlands, such as water filtration, erosion protection, and flood control.

Ruhl, J.B. and Salzman, James E., “The Effects of Wetland Mitigation Banking on People” (January 2006). FSU College of Law, Public Law Research Paper No. 179 Available at SSRN).

Wetland mitigation banking is used to ensure no net loss of wetland area under Section 404 of the Clean Water Act. Basically, mitigation banking allows developers who damage or destroy wetlands to buy off-site wetlands as compensation. Many studies have examined whether the new wetlands adequately replace wetland values and functions, but few have examined the social impacts of wetland mitigation banking.

Ruhl and Salzman studied 24 wetland mitigation banks in Florida (accounting for 95% of bank activity, and representing over 900 development projects). They show that in 19 of 24 banks, wetlands “migrated” from urban to rural areas.

“The whole point of wetland mitigation banking – what makes its economic incentives work – is that developers get to wipe out wetland patches in the higher priced land markets and bankers get to establish wetlands banks in the less pricey land markets,” Ruhl said. “It’s not surprising then that development projects using wetland mitigation banking often are located in urban areas and the banks they use are located in rural areas.”

The populations of winners and losers in wetland mitigation banking are quite different, as you might expect. The banks (where wetlands are restored) are, on average 10 miles from the projects (where wetlands are damanged). The average income was nearly $12,000 lower in projects compared to banks, and the average minority population was 13% higher projects.

The researchers suggest that further examination of wetlands mitigation banking is needed. ” … wetland mitigation banking has been touted as a “win-win” program, but unless someone keeps score we really can’t know whether it truly fits that billing.” For now, it seems that not actively including the value of ecosystem services means inadequately assessing the true costs and benefits of the program.

Ruhl is the Matthew and Hawkins Professor of Property at the FSU College of Law, and Salzman is a professor at the Duke University School of Law and the Nicholas School of the Environment.

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