Mitigation banking has raised the bar on compensatory mitigation by instituting accountability, financial assurances, and regular monitoring. The mitigation banking industry has improved mitigation practices throughout the United States, improvements which have carried over to other nations. Marketbased systems that transform resources into fungible commodities are an invaluable means of working toward a more ecologically sustainable future. However, as the enthusiasm surrounding market approaches continues to grow, we need to be cautious of overly relying on mitigation banks to protect broader ecosystem services and meet sustainability targets.

As former members of the NRC Committee on Mitigating Wetland Losses, we were encouraged to see that the federal agencies seriously considered our report and issued a regulation in April 2008 that seeks to implement our recommendations. This Article offers our thoughts on the new regulation in light of our report, as well as patterns and rates of wetland loss since 2001. After providing a brief background on the Clean Water Act and the NRC report, we examine the extent to which the new regulation incorporates several of our primary recommendations. In particular, we consider whether and how the regulation addresses our recommendations concerning the watershed approach; operational guidelines and performance standards; and the treatment of mitigation banks, in-lieu fee programs, and permittee-responsible mitigation. While the new regulation represents significant progress, its effectiveness (or lack thereof) will depend on implementation in the field. Will the agencies have sufficient resources and the institutional will to assess adequately proposed plans and ensure compliance? As the agencies proceed, we urge them to renew an emphasis on avoidance of wetland impacts. We also urge them to apply adaptive management principles to the new rule: evaluate and adjust in light of experience.

On April 10, 2008, the U.S. Army Corps of Engineers (Corps) and the Environmental Protection Agency (EPA) jointly published final regulations defining standards and procedures for authorizing compensatory mitigation of impacts to aquatic resources that the Corps permits under Section 404 of the Clean Water Act (CWA). Prior to these final regulations, Section 404’s compensatory mitigation program was administered under a mish-mash of guidances, inter-agency memoranda, and other policy documents issued over the span of seventeen years. Although motivated primarily by the need to bring the program under one comprehensive regulatory framework, the final regulations also introduce ecosystem services into the mitigation decisionmaking standards for the first time by requiring that “compensatory mitigation should be located . . . where it is most likely to successfully replace lost functions and services.” Easily overlooked in the lengthy Federal Register document, this is a potentially significant development, but it is unlikely to gain policy traction without substantial research into the development of efficient and reliable wetland ecosystem service assessment methods. To help orient such research efforts, this Article provides the following: (1) background on the compensatory mitigation program and ecosystem services prior to promulgation of the final regulations; (2) an overview of how the final regulations integrate ecosystem service analysis into compensatory mitigation decisions;and (3) suggestions for a research agenda to support implementation of that feature of the rule.

While we are now lauding and analyzing the new mitigation regulations, we should not forget that they were compelled by Congress. There is a statute behind these important regulations, which directed establishment of a “level playing field” for mitigation providers. In evaluating the new mitigation regulations, we cannot lose sight of the statute and its background.

Thirty-six years after the enactment of the Clean Water Act (CWA) and its Sections 301 and 404 program regulating the discharge of dredged and fill material into aquatic systems, it has become glaringly apparent that mitigation has been largely unsuccessful at replacing either the extent or functions of the aquatic resources destroyed or degraded by such discharges. By now, it should be obvious that, wherever possible, avoidance of impacts to existing water resources is the wisest environmental protection policy. Yet in practice, avoidance has received far too much lip service and far too little practical application. Recent agency rules issued to govern mitigation activities continue what can only be described as a “cockeyed optimist” approach to aquatic resources permitting—one that is destined to lead to further deterioration of the nation’s aquatic resource base.

Half of the world’s wetlands were lost in the past century. Twenty percent of the world’s freshwater fish are extinct, threatened, or endangered. In addition, dams and canals fragment almost sixty percent of the world’s largest rivers. The United States alone is losing natural land at an alarming rate, with over two million acres of land lost every year to development. According to the United States Geological Survey, Louisiana has lost 1,900 square miles of wetlands in the past seven decades—an area larger than the state of Rhode Island. Draining the wetlands to make way for roads, malls, beach communities, marinas, and condominiums has depleted the shoreline. Louisiana, in fact, loses twenty-five square miles of coast every year.

In the state of New South Wales (NSW), Australia, incentives for biodiversity conservation primarily involve financial incentives and taxation concessions. Disincentives to discourage impacts on biodiversity have primarily been procedural and regulatory. However, the new Biodiversity Banking and Offsets Scheme (BioBanking) in NSW aims to introduce market-based incentives both to encourage conservation and discourage impacts on biodiversity.

Species protection often conflicts with economic interests. Applying a proactive approach to nature conservation, in which conservation measures are integrated into economic activities, can lead to good results.

In the Netherlands, the presence of the strictly protected Natterjack toad often leads to conflicts. For one particular region, it is even clear that application of conservation-minded legislation is counterproductive. Therefore, a species management plan (SMP) was specifically created for this region by means of a joint planning process that included all stakeholders. The SMP is a framework for guaranteeing the long-term viability of the population of the Natterjack toad in the region while preventing unnecessary legal procedures. As such, it has both economic and ecological advantages.

Kate Bornstein calls hirself a gender outlaw. Ze was born Al Bornstein and lived for decades as a man, but ze never felt like a man: “I know I’m not a man—about that much I’m very clear,” ze says. Al took hormones and ultimately underwent sex reassignment surgery to become Kate, assuming that hir certainty that ze was not a man must mean that ze was a woman. So ze tried being a woman, but ze did not feel like a woman either. “I’ve no idea what ‘a woman’ feels like. I never did feel like a girl or a woman,” ze confesses.

Aware that people instantaneously label others according to gender and that the label they choose affects how they interact with each other, Bornstein made an effort to pass as a woman regardless of hir doubts. Ze studied the way gender is suggested by cues such as physical appearance, behavior, legal documents, and power dynamics in order to learn those cues that could be learned and divert attention from those that could not be changed. In part by learning these cues, Bornstein now “live[s] [hir] life as a woman in [hir] day-to-day walking around, but [ze] is not under any illusion that [ze] [is] a woman.”

The President of the United States created a Commission to study local zoning regulations and their impact on housing costs. After two years of intense research, the Commission submitted its much-anticipated report to the President. The 504-page report concluded:

Zoning affects land values in a number of ways. First, by protecting development against the encroachment of undesirable uses, it can help to maintain and enhance property values. Indeed, much of the interest and concern in the zoning system by homeowners is based on this desire to preserve their investment. Second, zoning may raise the price of land designated for certain uses by restricting the supply of such land.