If you are involved in a wetlands enforcement case, the terms of the settlement agreement will outline how much you have to spend on compensatory mitigation projects. You may also be required to perform mitigation as part of a project that could potentially adversely impact wetlands. Let’s take a look at some ways that can help you figure out how much a mitigation project will cost.
What’s a Credit Cost?
Wetland mitigation credits vary depending on the area you are in and market demand. The credit value from a mitigation bank is generally thought of in terms of the extent of the lift in ecological function that will be achieved at the site. The number of credits earned by a mitigation bank is based on the quantity and quality of the resources that are restored, created, enhanced, or preserved.
The credit price can be based on such factors as:
- Market value. The mitigation bank may take into consideration the cost for permittee-responsible mitigation in the area when determining credit price. The price will also reflect what applicants are willing to pay for a credit.
- Recouping investment cost. The mitigation bank can factor into the credit price how much was spent to establish the bank and the expense for management and maintenance of the site.
- Competition/market demand. The price of a credit may be affected by the presence of other banks or in-lieu fee programs in the area that share a similar service area.
- Amount purchased. The price of a credit can also be determined by the number of credits purchased.
Cost Estimate Tools
There are some tools out there to help you determine the best bang for your settlement or development buck.
The Center for Watershed Protection has developed a Wetlands At-Risk Protection Tool intended to help local governments determine the value of the wetlands in their jurisdiction. The numbers provided in the tool are a little dated, but they provide a good starting point.
The U.S. Army Corps of Engineers (Corps) Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS) provides information on mitigation banks and in-lieu fee programs across the country. RIBITS allows you to access information on the types and numbers of mitigation banks and in-lieu fee program sites, mitigation credit availability, as well as information on national and local policies and procedures that affect mitigation bank and in-lieu fee programs development and operation.
The National Mitigation and Ecosystem Banking Conference is an annual event that draws policymakers, bankers, and consultants in the industry. The next conference will be held in May 2018 in Louisville, Kentucky.
The National Environmental Banking Association represents small businesses that have established and operated mitigation and other environmental banks throughout the United States since the early 1990s.
Some states, such as Minnesota and Washington, have developed fee structures for wetlands mitigation banks. Check with your state and/or local wetlands board for any available guidance concerning credit fees.
In addition, there are numerous private companies and consultants that can help you know what to expect should you have to buy mitigation credits or if you want to invest in a wetlands mitigation bank. However, you should figure in the cost of paying them to arrive at the true cost of your mitigation project.