Investigating Barriers to Using State-owned Tidal Lands for Compensatory Mitigation

Coastal wetlands provide a variety of ecosystem services including serving as essential fish habitat, improving water quality, and buffering the shoreline. These areas are also home to important enterprises such as aquaculture and ports. Oftentimes, these businesses need to discharge dredged or fill material to expand operations. However, per Section 404 of the Clean Water Act, these businesses must first obtain a permit prior to discharging these materials. Permit applicants must mitigate any damages to aquatic resources, which involves avoiding, minimizing, and compensating for adverse impacts. Compensatory mitigation refers to replacing or offsetting the loss of aquatic resources by restoring, establishing, enhancing, or preserving aquatic resources in another location. Compensation can occur through a variety of mechanisms, including mitigation banks, in-lieu fee programs, and permittee-responsible mitigation. In coastal areas, regulatory agencies like the National Oceanic and Atmospheric Administration have observed that compensatory mitigation for losses of intertidal and/or subtidal habitat often occurs farther inland than the original aquatic impact. This project sought to investigate the barriers to using state-owned tidal lands for compensatory mitigation purposes by interviewing mitigation bankers, state lands regulators, and interagency review team members. Additionally, aquaculture programs were examined to assess how existing public land lease agreements could be adapted for compensatory mitigation purposes. The focus areas of this project were the states of California, Florida, and Washington, and we discovered that the largest barriers to establishing mitigation sites on these tidal lands were (1) the lack of clear guidelines for what qualifies as protection of a habitat “in perpetuity,” (2) issues with obtaining leases for public lands from state agencies, and (3) the volatility of the tidal banking market.