Environmental Banc & Exchange

Ecosystems Markets FAQ’s

1. What is mitigation banking?
2. What is ‘turn-key’ or ‘full service’ mitigation?
3. What is habitat banking?
4. What is Nutrient Trading?

What is mitigation banking?

Mitigation banking is a system for dealing with the impacts to wetlands from various human activities, including building and road construction. Conservation banking is a very similar approach to dealing with the impacts to the habitat of threatened or endangered species. When buildings and roads are permitted by government agencies, they are required to avoid and minimize any impacts to these types of sensitive environmental features. However, when there are unavoidable impacts, the person or company seeking the permit must mitigate the remaining impacts.

While some permit seekers mitigate impacts by permanently protecting and restoring environmental features similar to the ones impacted onsite, others make use of mitigation banks. Mitigation banks are sites chosen specifically for their ability to protect and restore environmental features such as wetlands and endangered species habitat. These banks are characterized by:

Providing measurable protection and restoration in advance of any specific impact.

Providing clear success criteria that government agencies can use to determine if the bank is in fact providing meaningful protection and restoration services.

Providing financial assurance, typically in the form of a bond tied to the property, that provides for monitoring and maintenance of the bank, and;

Providing permanent protection in the form of a restriction on the deed to the land which ensures that the bank will stay in service.

Mitigation banks enable both conservation and development, by providing a means for appropriate and necessary development to occur in a more responsible and ethical manner. When development affects important environmental features, mitigation banks ensure that developers have an effective means of offsetting the specific impacts that occur, and ensure that the costs of mitigation are included in the cost of the development.

What is ‘turn-key’ or ‘full-service’ mitigation?

Many conventional business services, from accounting to logistics, are often outsourced to specialists who can provide more efficient and cost-effective outcomes because they focus only on the particular service they provide. Today, many building, construction, mining or other operations find themselves hiring staff and spending tremendous amounts of time and attention on the mitigation requirements of their projects. At EBX, we believe that both project proponents and the public can benefit from ‘turn key’ mitigation projects that provide complete, verifiable environmental offsets for one or more business activity. ‘Turn-key’ projects essentially outsource all aspects of a mitigation project, from site location through permitting, restoration activities and monitoring, to firms like EBX that focus exclusively on these issues. ‘Full service mitigation’ is a related approach that adds a consultative planning element to the turn key approach, allowing firms to benefit from more strategic approaches to land use planning and issues relating to the time and cost of permits.

What is habitat banking?

As with many of the other market based environmental solutions, habitat banking is gaining acceptance as an effective and efficient means of helping to ensure that there is no net loss of endangered and threatened species (ETS) habitat, with the very real potential for a net gain. The concept is similar to the other environmental markets with the one notable difference that animal species are a critical part of the success criteria.

The fundamental premise of habitat banking is to identify existing or degraded habitats that may be conducive to supporting colonies of ETS. Typically, a zero baseline is established and the bank is then given credit for each pair of ETS that “volunteer” or are successfully introduced. Credits are allocated to the banks through the regulatory agencies, and can be acquired by various stakeholders to compensate for unavoidable impacts to endangered species habitat.

Habitat mitigation banks are typically designed to consolidate the acquisition of mitigation land into large and biologically meaningful parcels. Credits are compiled in order to maximize restoration of degraded habitat.

What is Nutrient Trading?

In 2002 the US Environmental Protection Agency issued guidance regarding the establishment of nutrient trading programs to improve water quality in impaired watersheds. A nutrient reduction trade involves an exchange of effluent control responsibility between discharge sources. The control responsibility is expressed in terms of “allowance” or “credit” which specifies the quantity of effluent the discharger is allowed to release. An exchange of allowances or credits does not increase the overall effluent discharge. Increased discharges by one source are offset by decreased discharges by another source.

Market based approaches place a cost or price on the source’s decision to continue to discharge effluents. In a trading system, the cost is the price to purchase allowances from another source. Within a properly operating trading system, the financial incentives for dischargers to reduce costs drive the search for more effluent control strategies.