Environmental mitigation

Mitigation is a more development-friendly alternative to strict environmental laws because it allows development to occur where environmental laws might prohibit it.

Mitigation inevitably creates a "mitigation industry". By requiring those who impact natural resources to purchase credits, a demand for mitigation credit is formed. Businesses related to environmental work typically benefit from such a system.

Mitigation has the potential to save and restore the most valuable environmental resources at the least cost, assuming that regulation 1) protects health and welfare as defined by the National Environmental Policy Act (NEPA) and 2) assures that a credit accurately represents measurable ecological value. Buyers are typically looking for mitigation credits that are both cheap and the most likely to meet regulatory requirements for compensatory mitigation. Regulators must therefore find a balance between protecting the long term public interest and ensuring that buyers have the proper incentives to participate in the environmental marketplace.

Mitigation systems place the environmental costs of development mostly on the individuals or entities that are impacting the environment. Without environmental mitigation, costs of alleviating environmental damage caused by development could be placed in the hands of the government which would in turn pass costs on to taxpayers not responsible for environmental impacts.

Land previously unused or impractical for development is given greater monetary value under a mitigation system. For instance, land in floodplains may be impractical for commercial or residential development but conducive for mitigation activities. Land in rural areas with very little potential for growth are more valuable when given the opportunity to be used for mitigation credits.

Mitigation regulations may not properly take into account the total ecological losses and gains associated with environmental impacts or mitigation when allocating debits and credits. Governing bodies are primarily responsible for prescribing the ecological criteria required to attain credits for mitigation. They are also responsible for valuation of credit. Therefore, it is evident that problems with the allocation and valuation of credits and debits might stem from the complexity of assessing the current comparative value of ecological resources (aka ecosystem services), ecosystem change over time, and/or a lack of understanding about what is beneficial or harmful to the environment overall. To address these uncertainties regulators often assign 'coverage ratios' to compensatory mitigation agreements. Coverage ratios of, for example, 3:1 require 3 compensatory mitigation credits for every 1 unit of ecological disturbance.

Mitigation could be seen as contributing to the increasing cost of land because some mitigation work requires that large amounts of land be purchased or put into conservation easements. Mitigation can therefore compete with other rural land uses such as agriculture and residential development. This suggests that land owners must be alert to find the highest and best use for their properties given the potential market value that mitigation credits represent.

Commitment of lands to compensatory mitigation must be done 'in perpetuity', meaning permanently into the future. Otherwise, the long-term public interest could not be served via compensatory mitigation programs. This means that properties must continue to be managed with ecosystem values in mind, sometimes preventing landowners from transforming the landscape to meet changing needs. For example, future large scale development projects would not likely be permitted on previously dedicated mitigation properties.