Thursday, January 12, 2012

Another Paradox: Territorial restrictions on ecosystem service credit trade

I'm tempted to name this one after Ricardo Bayon, because it came up in our conversation a few years back, but I'll spare him.  We were talking about the problem I'd seen in Chicago and Minnesota where municipalities were enacting rules that prevented wetland credits from leaving their territory -- Elgin didn't want to lose its wetlands to rural Kane County, etc. -- even though both of them were in the same Corps service area.  This was really getting in the way of local wetland bankers.

Ricardo waved off the possibility of this happening in California.  But I suggested something like this: "Any environmental amenity sufficiently valuable to sustain a viable ecosystem service credit market is valuable enough to stimulate policies restricting its flight from any territory concerned about attracting an affluent residential tax base."

Sounded smart.  No idea at all if this has happened!


  1. I know of one place where it has indirectly occurred, albeit not for the purposes that you describe. Eugene, Oregon has their own wetland mitigation bank, within their UGB. One would expect all wetlands filed within the UGB would be offset within the UGB; however, there are a number of other overlapping service districts within the city and they're without such a policy. Unfortunately (or fortunately for the private bankers) the Department of State Lands, has vowed to keep such a policy from being implemented; though such a policy would have likely seen less resistance from the state if it had been enacted before there was private competition within the city.

  2. Interesting! Presumably ODSL's lever here is that restricting sales to Eugene's UGB would violate the terms of the other banking instruments whose service areas overlap the UGB. Unless the City of Eugene is on the IRT for the other banks, there's no real way they could object to the cross-boundary sale. ODSL would have to be on board.

    In Minnesota and Chicago the final authority rested in local bodies. Local Governmental Units (cities, watershed districts,etc) issue the permits for the State Act, although it's overseen by the MN Board of Water and Soil Resources, who in any event prefers to defer to local preferences. If the City of Plymouth. Corps hasn't historically been too involved except to say "MWCA permits constitute compliance with 404 permits, KTHXBAI," although they've gotten a lot more involved in the past decade.

    In Chicago the cities have a lot of latitude because a ton of the impacts aren't CWA-jurisdictional anymore -- that's where SWANCC was, after all. They're covered only by the fact that the state has given the Chicago collar-counties power to issue stormwater permits that act like wetlands permits, and in many cases the counties have devolved that power to cities.

    So it sounds idiosyncratic and complicated, but state or local overlay laws aren't nearly as uncommon as it might seem, and they can result in this kind of situation even as we continue to think of the most important environmental permitting laws as federal. Oregon's a great case of that.