Nicholas Institute for Environmental Policy Solutions
February 2020

Compensatory Mitigation on Federal Lands

Compensatory Mitigation on Federal Lands Cover

As compensatory wetland and stream mitigation expands, particularly in the western United States, the availability and prominence of federal lands will become increasingly relevant in affecting the execution of mitigation. Moreover, as land management agencies face constrained economic conditions there will be growing interest in alternative forms of revenue and sources of money for restoration. Thus, it is realistic to expect the question of compensatory mitigation on federal lands to become increasingly relevant across land management and regulatory agencies. This raises the question: if federal land management agencies are going to create policies to formalize mitigation on their lands, what major considerations do they need to take into account, and what alternatives need to be acknowledged?

This report represents an examination of compensatory mitigation of aquatic resources (i.e., streams and wetlands) on U.S. federal lands through an examination of case studies and a review of the legal landscape in which such mitigation takes place. While the authors neither promote nor discourage mitigation on federal lands at this time, we do present a series of considerations and recommendations that should be taken into account as federal agencies begin formalizing policies regarding compensatory mitigation on their lands. While our review of existing federal lands mitigation projects was not comprehensive, it draws on learnings from significant cases that were highlighted by individuals deeply involved in these processes—federal agency members, nonprofit employees, and private mitigation bankers. Some of the issues identified with compensatory mitigation on federal lands drawn from case studies presented here may represent outliers, but are nevertheless important to emphasize so that, as policies for these processes are institutionalized, such issues can be addressed accordingly.