When the Supreme Court decided to upend federal wetland protection standards in June with its decision in Sackett v. Environmental Protection Agency (EPA), much of the public’s focus shifted to the potential for fallout regarding the what of the legal matter: wetlands. Less emphasis was placed on the how of wetland protection that largely takes place through wetland mitigation banking, or the restoration, establishment, or enhancement of wetlands.
What we call wetlands is really an umbrella for multiple habitats made of soil and water that connect to rivers, streams, oceans, and mountains: fens, bogs, swamps, marshes, and vernal pools, among other kinds of land and bodies of water. Some rely purely on rainwater for replenishment, while others collect water from upland sources. In some regions, mammals like moose and musk ox rely on wetlands for water, and in others, amphibians find a plentiful food supply of insects. Migratory birds enjoy wetlands as semi-permanent homes, stopping over between warm and cool seasons. When counting up the plants, animalcules, cyanobacteria, worms, and heliozoans, some specialists put the number at 1.5 billion living creatures in every square meter of some wetland mosses.
Apart from how wetlands exist, there’s a lot to be said for what they do and what role they play in the environment. Wetlands are an integral part of the water cycle; they protect low-lying areas from sea-level rise, depress the impacts of hurricanes, storms, and flooding, and support other life that allows the earth to function. Wetlands also store methane, a gas 25% more efficient than carbon dioxide at trapping heat in the atmosphere. Scientists say there are still many unknowns about the relationships between organisms that make wetlands such sophisticated ecosystems.
Just a fraction of the world’s wetlands have survived developments in housing, agriculture, and transportation. The pace and level of destruction belies wetlands’ importance as an ecological guardrail that preserves the environment. The court’s ruling in favor of the Sacketts, the couple that sued the EPA, coupled with the Biden administration’s actions on Tuesday, demolished federal protections for wetlands.
Wetland mitigation banking is the primary way wetlands are protected against outright destruction, like the Sacketts’ efforts to build a house on top of a wetland. The Supreme Court’s ruling called into question the federal rules and regulations that guide a subsection of the Clean Water Act and a definition of jurisdictional federal waters. Together, these rules and regulations enabled wetland mitigation banking. It was an imperfect system, but the flawed method of wetland protection was better than none.
Thanks to Sackett, on Aug. 29 the Biden administration lifted pollution protections on the wetlands that remain, effectively making “thousands of wetlands and waterways off limits to any government pollution controls because they do not connect directly to larger bodies of water,” The New York Times reported.
In the Sackett case, the Supreme Court ruled that federally protected wetlands must be directly adjacent to a “relatively permanent” waterway “connected to traditional interstate navigable waters,” such as a river or ocean. However, the justices were divided on the “significant nexus” test. Implemented in 2006, the test determined whether specific wetlands and streams were protected based on whether they had a “significant nexus” to interstate navigable water. As part of the Biden administration’s rollback of protections on Tuesday, the EPA announced it will no longer use the significant nexus test when determining whether tributaries and other waters are federally protected. If there’s no federal jurisdiction over wetlands, there’s no responsibility to mitigate wetland harm.
The rulemaking has revealed environmental regulation’s vulnerability to non-scientific judicial thinking, as well as industry precarity, due to an incongruent and simultaneous reliance on regulation and destruction. Equally important, the process has illustrated why policy and public thinking around the ways we restore wetlands needs to shift. But perhaps the more fundamental lesson is that wealth-building nearly always comes at the expense of the land—a logic that’s been accepted culturally and socially to the extent that we are now willing to risk a stable climate system for the riches that development can offer a tiny portion of the population.
Should compensatory mitigation be king?
The modern wetland mitigation scheme began in 2008. A federal update to the Compensatory Mitigation Rule mandated that developers interested in offsetting their destruction of wetlands had to look to mitigation banks as the first choice, rather than self-directed or fee programs that bore mixed environmental results. A mitigation bank is a natural area located away from a construction site where a company can build or restore a wetland in exchange for credits purchased by the developer as a way of offsetting its destruction. Mitigation bankers lobbied for this rule, which doubled the number of mitigation bank credit transactions and increased the amount of investment in the industry. Some estimates put the current industry price tag in the range of $4 billion.
The U.S. Army Corps of Engineers plays a central role in the compensatory mitigation program, approving building permits, deciding the ratio of acres restored for destroyed wetlands, and following up to monitor projects. The role that the Corps plays in all of this is a bit “strange,” said Kristen Schlemmer, the legal director and waterkeeper at Bayou City Waterkeeper, an organization dedicated to water protection in the Houston area.
“From our perspective, we’re looking at this as an environmental protection, but the Army Corps, their chief role is to build things,” Schlemmer said. “Being in charge of a permitting program where people are asking for permission to build things, I think predisposes them to say yes … Protecting wetlands isn’t their mission.”
The legal director told Prism it’s relatively unheard of for the Corps to deny a permit based on the Clean Water Act. Mitigation bankers find mostly private land to establish restoration sites and then work with the Army Corps of Engineers for project approval. Then, they’re free to sell mitigation credits. There are private restoration companies like the Ecological Restoration Business Association and nonprofit operators like The Nature Conservancy, as well as public funding that funnels down from federal agencies to state-wide programs. In January 2023 alone, the Department of Agriculture awarded $4.7 million in mitigation grants. Three states—Florida, Michigan, and New Jersey—run their own permitting program similar to the one put in place by Section 404 of the Clean Water Act, which means all other states depend on the federal rules and national mitigation bankers.
“We’re providing these ecological services but also providing compliance to permittees,” said Sara Johnson, the executive director of the California Ecological Restoration Business Association.
Environmental advocates who have studied the compensatory mitigation banking industry say that the standardization brought about by the 2008 rule was beneficial to wetland health because it allowed ecologists rather than developers to dictate restoration. And conversely, developers were alright with the rule because it allowed them to move through the regulatory process more quickly because of compliance support from bankers.
Now that the updated rule on what waters can be regulated and protected by federal law has been released, other agencies may be able to fill in regulatory gaps. For instance, other federal laws like the National Environmental Policy Act and Endangered Species Act can create regulatory demand that construction companies would rely on mitigation bankers to help comply with. The National Oceanic and Atmospheric Administration offers millions of dollars in grants for restoration projects involving dam and culvert removal, Johnson said. The industry is doing fine, and it’s likely benefiting from increased federal dollars going toward construction that will ultimately require some form of environmental law adherence.
What’s less clear is how the wetlands are faring.
Formed mostly during the last ice age, what took millions of years to grow and take shape has died in a comparatively short amount of time: about 250 years. You can’t tell the story of America without telling the story of wetland destruction.
Land acquisition from the French, Spanish, and Mexican governments throughout the 19th century allowed the federal government to expand, along with the U.S. population. The federal government, with the help of its Army Corps of Engineers, colonized the land by forcibly removing Indigenous peoples and tribes to reservations, prisoner of war camps, and urban centers. Through legislation like the Swamp Land laws that began in 1849, governments drained wetlands to make it easier for militaries, scouting groups, farmers, and homesteaders to pass through, plant, and sell goods. Local and state transportation officials are some of the biggest current-day offenders, along with housing developers and agricultural interests. In agricultural Midwest states, more than 80% of wetlands have been lost.
Now, as many of the remaining wetlands struggle to survive, an industry booms. Mitigation can include removing trash and debris from wetlands, planting trees, shrubs, and mosses to increase health, or even building wetlands in areas where there were none previously. But there isn’t a consensus on the value of these replacement wetlands, both in terms of how they exist and what they do.
“A compensation site is never the same as what was lost,” said Morgan Robertson, a geographer and political ecologist at the University of Wisconsin, Madison, who also helped write the 2008 Compensatory Mitigation Rule.
According to his research, Robertson said there are about 40,000 acres a year of compensatory mitigation banking sites across the U.S., most of which are wetlands, compared to 20,000 impacted acres per year. One of the largest issues with replicating a millennia-old process through a colonial intervention is that economic goals are incongruent with ecological needs. Wetland mitigation is goal driven, but nature isn’t interested in products as much as processes.
Compensatory mitigation sites aren’t a silver bullet: destroying wetlands in one place rids the wetland ecosystem functions that are unique to that area. Even if a mitigation banker were to build a wetland 10 miles away from a development site, they’re changing the way that water is contained and stored in that landscape and the location of habitat.
“There’s kind of ecological hubris of economists saying, ‘Look, we might need to rearrange the landscape to make it more efficient … to produce environmental credit,’” Robertson said.
In one sense, mitigation banking is reproducing what we think a wetland ecosystem does, but there’s still a question if what was created is healthy or simply nice to look at. The murkiness comes down to U.S. ecological and science practices and the power that industry has to make its own rules. Monitoring is not required for every mitigation site, and when it is conducted, it’s usually for about five years. However, it can take as long as 30 years to understand the relationships between organisms.
In the years after monitoring ends, non-native plant and animal species move into the wetland areas, upending what was intended to be a native ecological process. This means that wetlands across a region can become more similar rather than helping to create a more diverse ecosystem. This “biotic homogenization” has far-reaching negative effects on the environment, including people.
“Ecosystems are incredibly complex. We just aren’t all that great at restoring them,” said Rebecca Lave, a professor of geography at the Indiana University who’s done extensive research on stream mitigation and restoration.
But even if it’s generally accepted that what’s replaced isn’t comparable to what’s lost, it’s not even clear that the primary step (and goal of the compensatory program) of building a wetland is being fulfilled. In an analysis of mitigation results conducted by the Geotechnology Research Institute at the Houston Advanced Research Center (HARC) and the Texas Coastal Watershed Program (TCWP), researchers found that 54% of compensatory mitigation permits authorized by the Army Corps were out of compliance. Of the Army Corps permits, 21% were out of compliance because while project construction was completed, mitigation was not.
For all kinds of permits, the report found, “In terms of wetland impact and mitigation acreage, for 20% of the wetland acreage impacts … there is no evidence in the permit records that any of the required mitigation was actually ever carried out.”
This monitoring—if it happens at all—is also hampered by the fact that government agencies and private businesses generally look for just a few criteria, missing important components and failing to consider the big picture. What monitors look for are so-called “performance standards,” but there’s no evaluation laid out for different regional hydrology or for worsening impacts of climate change, Lave said.
This is a sticking point for Rebecca Kihslinger, the senior science and policy analyst at the Environmental Law Institute and director of the organization’s wetlands program. “We’ve been thinking recently about how to think about climate change in this program,” Kihslinger said.
Considering climate impacts, she said, would help evaluate the long-term benefit of compensation sites, especially given the rapidly changing conditions due to drought, fire, and sea-level rise. And importantly, there are ways to cite and design compensation mitigation projects to provide “resilience benefits to communities,” she said. Meaning, there are ways to design wetlands to serve the role they once did.
It’s an area of research and advocacy that demands urgent attention, given the ways that discriminatory housing practices, inequitable city planning, and inconsistent disaster preparedness have cornered poor and majority-BIPOC communities into a climate-reactionary state of being. “A lot of developments that are filling in wetlands are taking away natural flood protection and often creating a flood problem for someone else,” Schlemmer, the waterkeeper, told Prism.
There isn’t a central database that documents where wetlands are being destroyed and mitigated or where construction is taking place, but there’s reason to believe that the pattern will likely follow legacies of racist neighborhood and city construction.
Some scholars, like Todd BenDor, a professor of sustainable community design at University of North Carolina, Chapel Hill, have even stipulated that wetland destruction and resulting compensatory mitigation is a vehicle for perpetuating inequity.
Climate laws are public safety laws
Experts are adamant that a faulty program is better than none at all, especially when considering the political weight of the industries responsible for wetland destruction—namely housing construction and agriculture.
Some experts say the counterbalance between mitigation banks and these industries is worth it. If the construction industry is going to be well funded, then the restoration industry should be too.
The problem is that environmental destruction is fundamental to the U.S. economy. “If the only way to make money off of land is tearing down an ecosystem and essentially putting on pavement and buildings, then you will get pavement and buildings,” BenDor told Prism. Part of that economy is the logic that environmental protections, like the ones afforded prior to the SCOTUS Sackett ruling, hamper “progress” and “freedom.” Environmental regulations aren’t thought of as necessary components of public health and safety laws.
But you’d never hear the housing construction industry gripe about building codes. “There’s a reason why we require a licensed electrician … You don’t really see home builders complaining about that,” BenDor said.
Housing regulations mandate that residents have access to running water, and there are rules against violating and harming the homes of others. That thinking seems to stop at the water’s edge of a wetland.