Conservation banking in North America
From www.entrepreneurstoolkit.org
Conservation banking is a way of using the market to finance and promote biodiversity conservation.
Regulated conservation banking is governed by regulations requiring new development projects to invest a proportional amount of the value of their development in a conservation bank. The conservation bank in turn invests its ressources in the protection of one or another endangered species. Bank operators are thus allowed to sell habitat credits to developers who need to satisfy legal requirements for compensating environmental impacts of development projects.
These banks offer landowners economic incentives to protect natural resources.
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Conservation bank in United States
In the United States, the federal government (Clean Water Act) as well as many state and local governments, require mitigation for the disturbance or destruction of wetland, stream, or endangered wildlife habitat. Once approved by regulatory agencies the mitigation bank may sell credits to developers whose projects will impact these various ecosystems.
There are currently over 70 active species banks operating in the United States covering a total surface area of 28,328 hectares and offsets purshased via these banks was worth approximately USD$ 370. Conservation banks grew at an average rate of 5 banks per year or 2,023.43 hectares per year from 1992 to 2006.
Specifically, the Clean Water Act section 404 provides allowances for developing fish habitat banks to offset development impacts. Thus far only two Fish Habitat Banks have been established in the United States. The Kimball Island Mitigation Bank which is a restored tidal marsh in the San Joaquin Delta and the Fremont Landing Salmon Conservation Bank which is a 100 metre floodplain site on the Sacramento River 20 miles North of Sacramento. These banks provide important habitat for Chinook Salmon, Delta Smelt and Sacramento River Winter Run Chinook Salmon, Central Valley Spring Run Chinook Salmon, Central Valley Steelhead and the North American Green Sturgeon.
Similary, mitigation (creation or restoration of new wetlands) for natural wetlands destroyed due to development has been a requirement under the Clean Water Act since 1977. In recent years, this legislation has resulted in the evolution of wetland mitigation banks, as locations which are preserved, restored, or established (through third party organizations who allocate miitgation credits) – in preparation for future wetland losses to development. There are currently more than 400 mitigation banks in operation. Total wetland and stream mitigation transactions are valued at USD$3 billion.
Conservation bank in Canada
The Fisheries Act administered by the Department of Fisheries Ocean in Canada has provision for establishing fish banks to offset potential impacts from development initiatives, such as alteration, disruption or destruction of fish habitat. The Fisheries Act requires such project to achieve a “no net loss” productive capacity through habitat banking investments. For example, the North Fraser Port Authority fish habitat bank has sold offset credits to the Vancouver Airport Authority and the Richmond Airport Vancouver rapid transit line at the cost of CDN$150/m2. Although fish habitat banking provides flexibility for developers, a review of 52 habitat compensation projects across Canada revealed that 67% resulted in net losses, 2% resulted in no losses and 31% achieved net gains. The rather inconsistent success rates among different habitat banking projects across Canada suggests a need for closer management, monitoring and enforcement in the Canadian context.
Some conservation banking programs within terrestrial environments have been established at the provincial level. For example Alberta has implemented a wetland compensation program and British Columbia’s environmental assessment process has provisions for compensation mitigation.
Conservation bank in Mexico
In Mexico a permit must be obtained from the Secretaria de Medio Ambiente y Recursos Naturales for any project that will involve land use change. As part of the permitting process a fee is collected from the developer to offset potential environmental impacts. The majority of the fees paid thus far originate from road and transmission line construction projects. Although the program has been successful in generating funds for environmental protection and restoration the fees have largely remained unspent due to the difficulty in establishing natural habitat equivalencies.
External Links
National Mitigation Banking Association [1]
