"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."
Florida has more active banks than most states, but it serves as a good indicator of what may happen, especially in coastal states, as the practice increases, Ruhl said.
Mitigation banking has been controversial since its inception about 10 years ago. The U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers have praised wetland mitigation as a better alternative to having developers provide on-site or off-site mitigation themselves. In fact, federal policy now encourages agencies to use mitigation banking to compensate for wetland impacts.
While advocates say that banking is far more successful than any other means of compensating for wetland losses, critics say that banks do not adequately replace wetland values and functions. This study is significant because it underscores the need to analyze the value of the ecosystem service losses due to wetlands mitigation banking, according to Ruhl.
"We ought to make resource use decisions that are based on a full accounting of costs and benefits," Ruhl said. "This study shows that ecosystem service values, when not integrated into the banking program, get lost in the shuffle. We might be making economically unwise decisions, or at least not fully informed decisions
Contact: J.B. Ruhl
Florida State University