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Assessing Conservation and Mitigation Banking Practices and Associated Gains and Losses in the United States

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  • Sebastian Theis

    (Department of Renewable Resources, University of Alberta, 433 South Academic Building, 11328-89 Ave NW, Edmonton, AB T6G 2J7, Canada)

  • Mark S. Poesch

    (Department of Renewable Resources, University of Alberta, 433 South Academic Building, 11328-89 Ave NW, Edmonton, AB T6G 2J7, Canada)

Abstract

Conservation and mitigation banks allow their proponents to buy credits to offset the negative residual impacts of their development projects with the goal of no net loss (NNL) in the ecosystem function and habitat area. However, little is known about the extent to which these bank transactions achieve NNL. We synthesized and reviewed 12,756 transactions in the United States which were related to meeting area and ecological equivalence (n = 4331) between the approved negative impact and offset. While most of these transactions provided an offset that was equal to or greater than the impacted area, approximately one quarter of the transactions, especially those targeting wetlands, did not meet ecological equivalence between the impact and offset. This missing ecological equivalence was often due to the significantly increasing use of preservation, enhancement, and rehabilitation over creating new ecosystems through establishment and re-establishment. Stream transactions seldom added new ecosystem area through creation but mainly used rehabilitation in order to add offset benefits, in many cases leading to a net loss of area. Our results suggest that best practice guidance on habitat creation as well as the incentivization of habitat creation must increase in the future to avoid net loss through bank transactions and to meet the ever-accelerating global changes in land use and the increased pressure of climate change.

Suggested Citation

  • Sebastian Theis & Mark S. Poesch, 2022. "Assessing Conservation and Mitigation Banking Practices and Associated Gains and Losses in the United States," Sustainability, MDPI, vol. 14(11), pages 1-24, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6652-:d:827179
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    References listed on IDEAS

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    1. Marie Grimm, 2021. "Metrics and Equivalence in Conservation Banking," Land, MDPI, vol. 10(6), pages 1-14, May.
    2. John Pattison & Peter C. Boxall & Wiktor L. Adamowicz, 2011. "The Economic Benefits of Wetland Retention and Restoration in Manitoba," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 59, pages 223-244, June.
    3. Jagdish Poudel & Raju Pokharel, 2021. "Financial Analysis of Habitat Conservation Banking in California," Sustainability, MDPI, vol. 13(22), pages 1-12, November.
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    5. Marie Grimm & Johann Köppel, 2019. "Biodiversity Offset Program Design and Implementation," Sustainability, MDPI, vol. 11(24), pages 1-15, December.
    6. Poudel, Jagdish & Zhang, Daowei & Simon, Benjamin, 2018. "Estimating the demand and supply of conservation banking markets in the United States," Land Use Policy, Elsevier, vol. 79(C), pages 320-325.
    7. Boisvert, Valérie, 2015. "Conservation banking mechanisms and the economization of nature: An institutional analysis," Ecosystem Services, Elsevier, vol. 15(C), pages 134-142.
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    1. Gösta F. M. Baganz & Daniela Baganz, 2023. "Compensating for Loss of Nature and Landscape in a Growing City—Berlin Case Study," Land, MDPI, vol. 12(3), pages 1-18, February.

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