Mitigation is the preservation, enhancement, restoration, or creation of:
- Wetlands, estuaries, aquatic habitats;
- Streams, riparian areas, vernal pools, or tidal systems; or
- Specialized habitat areas that supported special status species
that offset anticipated adverse impacts to nearby, similar ecosystems due to development or other impacts. Mitigation banking is when credits are produced in advance of those impacts and made available to satisfy regulatory or permitting compliance for those impacts.
In short, it is a system of credits and debits that helps ensure lost ecological function caused by development is compensated by the restoration, preservation, or creation of wetlands, streams, and other similar habitat areas elsewhere.
Restored Wetlands and Streams offer credits to offset lost ecological services that occur in aquatic habitats. These are regulated and approved by the US Army Corps of Engineers (USACE) and the Natural Resource Regulatory agencies in the state in which the impacts occurred.
Conservation Banks provide credits to offset losses of threatened or endangered species and/or their critical habitat areas. Conservation banks are regulated and approved by the US Fish and Wildlife Service (USFWS) or the National Marine Fisheries Service (NMFS) and the Natural Resource Regulatory agencies in the state in which the impacts occurred.
Mitigation and conservation banks are driven by regulatory compliance for unavoidable impacts to aquatic or ecological resources through projects or development (e.g. infrastructure projects such as roads, bridges and tunnels, real estate developments or mining and energy projects). Mitigation banks sell ecological compliance credits to permittees through a transaction to compensate for these impacts, often within a limited geographical context. Through this transaction, liability for compensating for losses to ecological resources is transferred to the mitigation bank (EPA).