Stream Mitigation Banking

Stream mitigation banking is a market-based approach for managing negative impacts on fluvial systems under Section 404 of the US Clean Water Act. The core rationale of mitigation banking is that we should protect the environment not by preventing harm, but by pricing it: developers, public-works agencies, and other entities may damage a stream in one location as long as they pay for the restoration of a comparable stream elsewhere (see Compensatory Mitigation and Valuation of Ecosystem Services). That restoration is most often provided by a for-profit company that speculatively purchases rights to land with a degraded stream on it, then restores that stream to produce stream credits. The stream credits can then be purchased by developers or other entities to fulfill the permit obligations incurred by proposing to damage another stream somewhere else (see Stream Mitigation Banking in Practice). Along with its older sister, wetlands mitigation banking, stream mitigation banking is one of the oldest and most firmly established market-based approaches to environmental management in the world. As of 2018, there were nearly 3,500 mitigation banks in the United States, with sales estimated at least $1 billion per year. Mitigation banking has thus become a poster child for market-based (also referred to as neoliberal) approaches to conservation, inspiring comparable policies to tackle issues from endangered species to carbon dioxide emissions on every continent except Antarctica. However, there has been relatively little biophysical evaluation of whether stream mitigation banking actually leads to better outcomes for fluvial systems, and the data we do have are not promising (see Environmental Impacts).