Wednesday, June 6, 2007 - 2:30 PM
257

Economic Incentives or Ecological Nonsense? "Unbundling" mitigation credits for specific ecosystem services in restored streams and wetlands

Melanie J. Small1, Martin W. Doyle1, and Emily S. Bernhardt2. (1) Department of Geography, University of North Carolina, Chapel Hill, NC 27599, (2) Department of Biology, Duke University, Durham, NC 27708

Stream and wetland restoration programs are increasingly active, with state in-lieu fee programs and private mitigation banks creating viable markets for mitigation credits: 94 km of streams and 240 ha of wetlands were traded in North Carolina in FY 2005-06. The traded credits represented “bundled” systems providing multiple services. However, NC also has a nutrient offset program wherein ecosystems are potentially restored to offset nutrient point sources elsewhere. The proposal to credit stream/wetland restoration projects for this ecosystem service (nutrient retention) as a potentially separate (and separately sold) commodity raises profound ecological and economic issues.  To illustrate the economic lure of “unbundling”, or selling separate ecosystem services individually, we analyzed an ongoing local restoration research site and show that at current market prices of C, N and P, a 30-acre restored wetland would increase in market value from $1,176,000 to $1,240,000. Similarly, a mid-order restored stream would increase from $867,000 to $1,004,000.  These modest gains may make investing in mitigation more attractive, but the currency of exchange is not based on a rigorous accounting of the actual provision of services. This presentation will focus on the potential economic and ecologic ramifications of unbundling ecosystem services.

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