Ecosystem Services Analysis
The State of Oregon requires developers or landowners who remove or fill wetlands to compensate for the loss of wetlands by creating or restoring wetlands in the same watershed (ORS 196.795-990). To ensure that there is “no net loss” of wetlands, the State’s Department of State Lands, which administers the permit program has required a ratio of 1:3, meaning that for every acre of wetland that is removed or filled, 3 acres have to be restored. This law was enacted in 1967, and has been controversial ever since. Development groups and municipalities have argued it has stifled economic growth by making it almost impossible to build anywhere near water. Environmentalists have argued that simply constructing wetlands elsewhere still allows important habitat to be destroyed.
Beyond this criticism, some practical problems have also arisen as a result of this law. First of all, development pressure is significant in some parts of the state, and some watersheds are already densely populated. This makes it difficult to find places in the same watershed to create or restore wetlands to compensate for lost wetlands. Second of all, the majority of landowners are farmers or timber-companies, and they do not like the idea of losing control of their land by restoring it and then being required to keep it in that state. This unease leads to long, and very difficult negotiations between developers, landowners and the state about the exact details of how, when, and for how long a wetland has to be restored to qualify as a compensatory wetland. Finally, the overall ecological effectiveness of the “ratio-based” approach is unclear. Wetlands typically perform a variety of so-called ecosystem services, like water storage, sediment, retention, nitrate and phosphorus removal, temperature regulation, carbon sequestration and habitat for a variety of animals. Requiring three acres of wetland to be created for every acre of wetland removed provides no guarantee that those services are performed equally well by the “new” wetland.
In response to some of these problems, “mitigation banking” has developed over the last decade. Mitigation banking involves landowners turning their (farm)land into wetlands, creating a “wetland mitigation bank,” and then offering (parts of) that land as compensatory wetlands or “credits” for developers in their watershed who are seeking to obtain a permit for a proposed development.
An influential and politically connected watershed advocacy group is now proposing a new way of accounting for wetland loss and compenstation, by calculating the loss of the “ecosystem services” from the removal or filling of wetlands, and then requiring the compenstation of those “services.” This could make the removal/fill program more effective from an ecological point of view, and would potentially allow for a more efficient approach to wetland mitigation banking. The governor has heard about this initiative, and has looked at Robert Costanza’s influential paper on the value of the world’s ecosystem goods and services. Also, you understand the governor has heard about the great success of New York City’s experience with ecosystem services. Now she has asked the Department of State Lands to advise her on whether or not he should support this new initiative. Would you recommend a new wetland compenstation approach based on ecosystem services? Can the subjectivity inherent in ecological assessment be dealt with? Do you believe this initiative will help overcome the reluctance of landowners to restore wetlands?