Breaking News: Species Banking ANPR Released
Yesterday, the Fish and Wildlife Service (FWS) released an Advanced Notice of Proposed Rulemaking (ANPR) on Compensatory Mitigation Mechanisms. The future rule will focus on endangered species conservation banking, as well as species that might soon receive protection.
"Valle de Oro NWR 2nd Place Restoration" Sandhill Cranes near wetlands construction by Wendy Tanner/USFWS, CC BY 2.0
Mitigation policy, and enforcement of those policies, are crucial both to safeguarding species and to create workable requirements that incentivize investment in a supply of advance ecological offsets for species likely to face some unavoided impacts from economic development and infrastructure projects. The agency’s previous conservation banking policy dates back to 2003. A great deal has been learned about compensatory mitigation from the world of wetland and stream mitigation since then, particularly since the ‘2008 Rule’ for Compensatory Mitigation for Losses of Aquatic Resources under CWA Section 404.
Multiple studies have been published on lessons learned and recommendations for better species mitigation policy (DOI Office of Policy Analysis, 2016; Carerras Gamarra and Toombs, 2017; White et al., 2021; EPIC, 2021). Thus it’s unfortunate that the ANPR is only about one page, rather than a more substantial framework of a regulation. It’s also unfortunate that this ANPR has come out before the expected reinstatement of FWS and ESA mitigation policies as it creates a bit of confusion as to how to comment on a topic that was previously addressed in the 2016 policies. For example, the ANPR is asking for comments on durability and additionality, themes covered in the 2016 mitigation policies. In our read here, we assume the 2016 policies will be coming back soon in close-to their original form, as those 2016 policies were well vetted and aligned with widely accepted offset policy principles.
The ANPR asks for comments on six questions relating to:
Equivalent standards, “including equivalence in covering the costs of mitigation whether they are on public or private lands”
Durability and additionality
Incorporating monitoring, financial assurances, and publicly accessible data
General hurdles to species banking
Aligning the policy with the 2008 Rule
Banking on Federal and Tribal lands
We provide some initial reactions, which we will follow up on soon.
Equivalent standards for all forms of mitigation is a good thing for species, so it’s great to see the FWS supporting this in the ANPR. Equivalent standards is a wonky short-hand that means that no matter the type of compensation used, everyone has to follow the same rules about things like providing financial assurances, legal protection, and funds for long-term maintenance. When this isn’t the case, there is greater risk that the project will fail. For example, in-lieu fee species mitigation frequently lacks any enforceable transfer of liability which is needed to make the recipient of mitigation funds legally responsible for performing the mitigation activities and meeting required performance outcomes. In the past, unequal standards have undermined demand for mitigation credits from conservation banks.
It’s another positive sign that the ANPR brought up the issue of land costs of species mitigation on public vs private lands. Private conservation banks pay for the lands on which the bank is established and that cost is wrapped up into the cost of a credit. If land costs are not incorporated, as could be the case of species mitigation on public lands, mitigation prices will be artificially cheap because past taxpayer investments in owning and managing the land basically subsidize the credits. If species mitigation banks are developed on public lands, they should only be used to offset impacts on public lands and the highest and best use appraisal cost of the land should be incorporated into the credit price.
Tribes deserve a clearer role to provide mitigation credits than past policy has allowed. The ANPR asks how the Service should “address potential bank projects on Federal and Tribal lands or on other lands with unique ownership considerations and/or some degree of existing protections?” Past policies have given little attention to tribal participation. For example, tribes are sovereign governments, but potential banks on tribal lands would previously have had to meet private land protection standards instead of state or federal governmental ones - that is inappropriate. The conservation banking policy should: 1) include tribes as conservation bank sponsors, either as stand-alone tribal government or within the definitions of government(s) entities, 2) allow for alternative site protection mechanisms that are appropriate for government entities, such as an intergovernmental agreement or natural resource management plan, as it is inappropriate to ask a tribe for a conservation easement or transfer the land title to a third-party entity, 3) consider more opportunities for both tribal co-management of the natural resources or species and long-term stewardship of the mitigated species.
Data transparency is needed for all forms of species mitigation. A sad fact of species mitigation is that it is difficult to analyze whether it is implemented and effective because relevant data may not be collected, archived well, or made available for analysis. Banks are more likely than other forms of compensatory mitigation to be effective, simply because by definition, agencies have to sign off on evidence of their effectiveness before credits can be sold. In addition to seeking adequate funding from Congress for monitoring and evaluation, FWS should also provide the public with access to data about permitted impacts and mitigation so that they can help the agency identify lapses in implementation and evaluate the performance of mitigation measures. All forms of mitigation (conservation banks, in-lieu fee programs, and permittee-responsible mitigation) should make non-proprietary information publicly available in an online tracking system.
The FWS should develop step-down guidance on quantifying impacts and conservation benefits. The 2016 ESA mitigation policy reasonably noted (in the preamble) that “Details about how to develop and apply assessment methodologies that are quantitative and transparent were not included in the draft, or this final, policy, because these details are species-specific and too complex to describe adequately within the framework of the policy.” Additional step-down guidance is needed to institutionalize a process for the agency to review and approve metrics and make them readily available to permittees and mitigation providers. The FWS should also know which species are likely to have a high volume of permit applications (e.g., species likely to be impacted by renewable energy development) and focus on developing predictable, repeatable credit and debit quantification methods for these species &/or landscapes.
In a subsequent blog post, we will revisit some of these themes and fine-tune recommendations, as well as address some topics not covered here: recommendations to overcome species banking hurdles, how to align a conservation banking policy with the 2008 Rule, and what aspects of durability and additionality are needed in the conservation banking policy given that these themes are already covered in the 2016 mitigation policies that are expected to return.
