Habitat loss because of negative anthropogenic impacts has been attributed as a main driver for global biodiversity loss and impairment of ecosystem function (Brinson & Malvárez, 2002; Dudgeon et al., 2006; M. A. Reid et al., 2015; Søndergaard & Jeppesen, 2007). Freshwater species are experiencing rapid declines, outpacing those of terrestrial systems, exposed to competition and displacement through invasive species, pollution, overharvest, and habitat loss and degradation (Brinson & Malvárez, 2002; Dudgeon et al., 2006; M. A. Reid et al., 2015). To slow current negative impacts and prevent future losses, conservation policies have become part of legislation in many countries (Droste et al., 2022; McKenney & Kiesecker, 2009; Specht et al., 2022). Part of this legislation is the establishment of the mitigation hierarchy. The mitigation hierarchy requires proponents of development projects that would otherwise affect ecosystem services, physical habitat area, or biodiversity negatively, to explore alternative options to avoid, minimize or reverse negative impacts first (Latimer & Hill, 2007; Maron et al., 2016; McKenney & Kiesecker, 2009). Authorized unavoidable negative impacts that remain after the previous three steps are required to be compensated for through an environmental offset to reach Not Net Loss (NNL) of ecosystem service, habitat area, or biodiversity (Bull et al., 2015; Maron et al., 2016; zu Ermgassen et al., 2019).
The use of banking, especially for freshwater systems, has been established as an increasingly popular and constantly evolving mechanism for delivering a required offset. While banking follows the same compensation methods and mitigation hierarchy as regular offsetting practice dictates, these created, enhanced, restored, or preserved habitat areas or ecosystem functions are established, implemented, and managed by a third party as opposed to the proponent itself, comprised of the bank sites, banking agreement and service area (area in which the bank can sell their credits; Boisvert, 2015; Latimer & Hill, 2007). Proponents instead purchase a required credit amount for their expected impacts, corresponding to an equal species, and ecosystem service or habitat value from the bank, set by the responding agency or government body (Boisvert, 2015).
While this form of offsetting creates a market-driven environment, allowing landowners and stakeholders to use the land for conservation purposes rather than exploiting its resources, it faces many of the same technical issues as traditional offsetting mechanisms (missing ecological equivalency, poor transparency in reporting, failing to provide long-term benefits), as well as unique new ones like the way ecological benefits provided by the bank, are translated into sellable credits (Bekessy et al., 2010; Bull et al., 2022; Grimm, 2020; Maron et al., 2016; zu Ermgassen et al., 2019). While the commonly known issues have been discussed and evaluated in the literature (e.g., Grimm, 2020; Theis & Poesch, 2022; zu Ermgassen et al., 2019), studies relating to credit calculations and derived advice are rare. In the case of freshwater banks, these questions become more tangible as to how banks respond to different ecological challenges (e.g., connectivity, habitat degradation, cumulative effects, and whether management and credits account for the individual challenges that come with each scenario (Hoggart et al., 2015; Lave et al., 2008; Teichert et al., 2016; Teresa, 2009; Wilkinson et al., 2017).
To investigate management and credit estimation approaches for freshwater banks we used publicly available data on banks in the United States through the Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS; RIBITS 2023). We hypothesize that banks targeting freshwater systems in the United States differ in their management and credit approaches based on species, habitat, ecosystem, and protection aspects.
Our main objectives here are to:
1) Showcase broad management and mitigation approaches among freshwater banks to help inform best practices.
2) Showcase differences in the way credits are assessed and formed in these groups and what benefits as well as risks they provide.