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What is Mitigation Banking?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 22 August 2016
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Mitigation banking is a system where people restore and improve a tract of land to offset damage to land in the area caused by development and other human activities. For landowners, mitigation banking provides an incentive for participating in habitat restoration and protection, as they can sell credits to developers in need of environmental offsets for their projects. There are also a number of ecological advantages, including the creation of large contiguous tracts of land for habitats, generally preferable to isolated restored areas, as they allow animals to roam freely in a large habitat.

In many nations, if a developer is going to create environmental damage, such as filling in a wetland, in the course of doing a project, the developer needs to buy environmental offsets. The developer or a representative must restore and protect a corresponding area of land, preferably nearby, to make up for the damage. While developers can and do engage in environmental mitigation on the site of projects, such as setting aside part of a development to restore a natural wetland, using mitigation banking can be cheaper and more efficient, and may also have more environmental benefits than a single patch of protected land in the middle of a development.

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Sometimes, the government offers mitigation banking and in other cases, these lands may be administered by individuals or companies. In either case, a representative of a regulatory agency must inspect and approve a site before developers can buy offsets. Developers can access a list of sites available for mitigation banking in their region through the government or professional organizations that promote environmental protection.

Mitigation banking is often used to protect wetlands, riparian forests, and related habitats, although other kinds of land preservation can occur as well. Protecting these environments provides shelter to a number of animals, in addition to conferring environmental benefits, such as creating a buffer zone to protect developments from flooding and other adverse weather events. The possibility of restoring polluted and abandoned sites to sell offsets also creates an incentive to clean up such sites, as they can be become profitable when used for mitigation banking.

The restored land can also serve as a recreation area for members of the community. People may enjoy hiking, canoeing, birdwatching, and other activities in restored habitats, although the administrator may limit access to fragile areas of land in the interests of protecting rare plants and animals.

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