For decades in Virginia, public and private developers who encroach on protected wetlands and streams have been required to offset the impacts by paying to restore similar ecosystems nearby.
The Virginia Department of Transportation, for example, had to buy many credits to compensate for construction to expand the Hampton Roads Bridge-Tunnel.
The process, called mitigation banking, operates as a marketplace where builders and restoration groups trade credits.
But it has become somewhat of a black box, said Jonathan Rak, chief policy advisor for the Virginia Department of Environmental Quality.
“It's a very inefficient market. It's not transparent,” he said. “It's very difficult for the participants to see what's available, what the price of credits has been. That means that there are some very wild fluctuations from place to place within Virginia and from time to time.”
The state recently launched a website to streamline the market by making this information more accessible. It’s produced in partnership with Water Ledger, a technology company focused on water management.
The Stream, Wetland and Nutrient Credit Exchange, or SWaN, allows anyone to toggle through an interactive map and dashboard to find available credits by watershed and type, such as tidal or non-tidal wetlands.
Market participants can register to use the platform more deeply for trading and research. Eventually, Virginia will charge subscription fees to recoup the cost of launching the website, which was about $500,000, Rak said. The basic website will remain free.
The new platform does not change the way mitigation banks are permitted or operated in Virginia, he said. It’s meant to make it easier for people to move through the process, allowing wetlands to be built more quickly and efficiently.
The wetland credits system is governed by state and federal regulations.
Mitigation banking gained momentum locally in the 1990s. The national practice was formalized in 2008 through joint regulations by the Army Corps of Engineers and the Environmental Protection Agency.
First, developers must prove they can’t avoid ecosystem impacts, Rak said. When they’re deemed necessary, mitigation is required.
Permittees can restore or build new wetlands if they find an appropriate site. Otherwise, they typically pay a nonprofit or private company to create the mitigation bank, or purchase credits available from an existing one.
The credits system is somewhat opaque for members of the public, but it has drawn more attention in recent years from people concerned about development and land conservation.
Residents near Pleasure House Point in Virginia Beach, for example, unsuccessfully fought against the city’s plans to convert a section of maritime forest into wetlands to earn mitigation credits.
City officials said they could not find readily available credits on the open market and needed them quickly to complete flood protection projects elsewhere in the city. Residents conducting research claimed they found other credits that the city could have used instead.
Surry County residents voiced concerns last year about a planned wetlands bank by the nonprofit Nature Conservancy that could drain the beloved Sunken Meadow Pond.
Last summer, environmental groups in Hampton Roads spoke out against an Army Corps decision for a mitigation bank in Prince George County. The groups argued that the project should not be allowed to sell credits in Hampton Roads, because it’s too far from the impacted ecosystem.
The SWaN platform could be used in such situations to provide more transparency for all involved, Rak said.
The credit system could also soon shift because of changes at the federal level.
A 2023 Supreme Court decision, Sackett v. EPA, narrowed the scope of the Clean Water Act, changing the definition of wetlands such that fewer areas will require mitigation. But Virginia’s regulations remain the same.
“There will be an increasing number of permits we expect that will be solely issued by Virginia and will not involve the federal regulations,” Rak said.
