A mitigation bank involves three entities: The bank sponsor/developer, the regulators, and the credit buyer. Each is dependent on the other to facilitate the establishment and transaction of credits for compliance.
A fundamental component of the mitigation is the mitigation banking instrument: this is the legal agreement between the bank owner and regulators that define terms of the bank, including performance standards and monitoring requirements.
Mitigation banks must demonstrate ecological uplift, such as restoration, enhancement, or creation of a site to create ecological credits.
Mitigation banks must implement long-term stewardship of a site to ensure ecological success, which is a requirement of the banking instrument.
Mitigation banks are tied to a service area, which defines the geographic limit of compensation for permitted impacts.
Evaluate the Opportunity
The process to develop a bank begins with evaluating an opportunity, including market analysis to determine potential demand, as well as suitable locations for a bank site. Market analysis involves evaluating regional impacts to natural resources from various projects or development to assess potential current and future mitigation needs.
Evaluate the Site
A potential bank site requires onsite evaluation of natural resources to determine type and quality of ecological resources.
Permit and Design
The next step is to engage in design and permitting of the mitigation bank. Permitting a mitigation bank is a negotiation process between the bank sponsors and regulatory agencies. It’s at this point where the terms of the bank, such as mitigation ratios and credit approval, are determined.
The outcome is a banking instrument with defines the terms of the mitigation bank.
Enhance the Site and Sell Credits
Following permit negotiations, the site is improved. Credits may be sold prior to, during, or following restoration work.
Stewardship
The final step is long-term management and monitoring of the bank. This ensures the viability of the resource and compliance with terms of the banking instrument.
