Somewhere in middle Georgia, a developer writes a check, and a few counties away, a degraded cattle pasture begins its slow transformation back into a bottomland hardwood wetland. This is wetland mitigation banking — a multi-billion-dollar market where nature is bought, sold, and (theoretically) replaced. It is one of the most consequential environmental experiments in American history, and most people have never heard of it.
The premise is deceptively simple. When a road, subdivision, or commercial development destroys a wetland, federal law requires compensation. The developer must replace what was lost. But rather than asking every highway contractor and homebuilder to become a part-time ecologist, the United States created a market. Entrepreneurs restore or create wetlands on large parcels of land, generating ecological "credits" that developers can purchase to offset their impacts. The developer satisfies the regulators. The banker makes a profit. And somewhere, in theory, a wetland is reborn.
The Scale of the Market
What began as a niche regulatory workaround has become a substantial industry. In 1992, there were just 46 approved mitigation banks in the entire country. By 2005, that number had grown to 405. By 2022, nearly 2,200 mitigation banks were operating across the United States. Pre-pandemic estimates placed the industry's annual revenue above $3.5 billion, with a total economic output exceeding $9.6 billion and more than 53,000 jobs supported nationwide.
The growth trajectory shows no signs of slowing. Market projections suggest the global mitigation banking sector could reach $36 billion by 2034, driven by infrastructure development, renewable energy projects, and tightening environmental regulations in many states. In the Southeast — where rapid population growth collides with some of the richest wetland ecosystems on the continent — the market is particularly active.
Georgia alone has over 120 active mitigation banks. More than 45,500 acres of land have been permanently protected through mitigation banking in the state, with over 265 miles of streams and 21,300 acres of wetlands and upland buffers restored and preserved. From the Rocky Creek Mitigation Bank in Jasper County, where stream channels and riparian corridors are being rebuilt in the Upper Ocmulgee watershed, to the Conasauga River Mitigation Bank in Whitfield County, where over 30,000 native trees and shrubs have been planted, the physical footprint of this industry is real and growing.
How the Machine Works
The mechanics of a mitigation bank are more complex than most realize. A prospective banker must first identify a suitable site — typically degraded land with restoration potential. They then develop a detailed plan covering hydrology, soil conditions, planting design, and long-term management. This plan goes before an Interagency Review Team (IRT), led by the U.S. Army Corps of Engineers, which scrutinizes the proposal and, if satisfied, approves a formal banking instrument.
Credits are not released all at once. They are tied to ecological performance milestones — a certain density of native vegetation established, hydrology targets met, invasive species controlled. The banker must monitor the site for years, sometimes decades, and is responsible for its long-term stewardship, typically through conservation easements and endowed management funds.
For developers, the appeal is straightforward. Purchasing credits from an established bank is faster, cheaper, and less risky than attempting to build their own wetland on-site. The liability transfers to the banker. Permitting timelines shrink. And the regulatory box gets checked. It is, by design, a system that aligns economic incentives with environmental outcomes.
At least, that is the theory.
The Uncomfortable Questions
The central promise of mitigation banking — "no net loss" of wetlands — remains stubbornly unfulfilled at the national level. According to the U.S. Fish and Wildlife Service, the United States lost 221,000 acres of wetlands between 2009 and 2019, an average of 22,100 acres per year. That rate of loss increased by more than 50 percent compared to the previous study period. Vegetated wetlands were hit hardest, losing 670,000 acres over the decade.
These numbers demand an honest accounting. If the mitigation banking system is working, why are we still losing wetlands at an accelerating rate?
Part of the answer lies in what ecologists call "functional equivalency." A natural wetland that developed over centuries — with its particular hydrology, soil chemistry, microbial communities, and interwoven food webs — cannot be replicated by planting saplings in a graded depression and waiting five years. Studies consistently show that created or restored wetlands exhibit lower ecological quality than the natural systems they are meant to replace. They are more susceptible to invasive species, less likely to support diverse amphibian populations, and often fail to provide the full suite of ecosystem services — flood storage, water filtration, groundwater recharge, carbon sequestration — that the original wetland delivered.
Then there is the geography problem. Economics dictates that developers destroy wetlands on expensive urban and suburban land, while mitigation banks are established on cheaper rural parcels. The wetland "replacement" may be 50 miles from the wetland that was lost. The community that depended on that wetland for flood control, water quality, or even simple green space receives nothing. The ledger may balance on paper, but the ecological services have been redistributed away from the people who needed them most.
"We are not replacing wetlands. We are moving them. And the communities left behind bear the consequences of that accounting trick." — Dr. Morgan Robertson, University of Wisconsin-Madison
This geographic displacement has environmental justice implications that the industry has been slow to confront. Low-income and minority communities, already disproportionately burdened by environmental degradation, often see their local wetlands destroyed for development while the compensatory restoration happens in wealthier, whiter, more rural areas.
The Sackett Shadow
The entire framework of wetland mitigation banking rests on the regulatory authority of the Clean Water Act, specifically Section 404, which requires permits for the discharge of dredged or fill material into waters of the United States. In 2023, the Supreme Court's decision in Sackett v. Environmental Protection Agency significantly narrowed the definition of which wetlands qualify for federal protection.
The ruling established that the Clean Water Act extends only to wetlands with a "continuous surface connection" to relatively permanent navigable waters. The "significant nexus" test, which had previously allowed federal jurisdiction over ecologically connected wetlands even without a visible surface link, was eliminated. Environmental groups estimate that the decision removed federal protection from between 19 million and 70 million acres of wetlands nationwide — potentially more than half of all previously regulated wetlands.
For mitigation banking, the implications are profound and paradoxical. Fewer regulated wetlands means fewer permits required, which means fewer credits purchased, which means less economic incentive to restore wetlands. The market mechanism only functions when destruction triggers a regulatory obligation. Remove the regulation, and the demand for credits evaporates — even as the ecological need for wetland restoration intensifies.
Some states have stepped in to fill the gap. Others have not. The result is an increasingly fractured regulatory landscape where the level of wetland protection depends heavily on which side of a state line you happen to stand on.
What Honest Reform Looks Like
We at the EPR Foundation believe mitigation banking is a tool worth keeping — but only if we are honest about its limitations and willing to strengthen it. The concept of harnessing market forces for ecological restoration is sound. The execution needs significant improvement.
First, performance standards must be more rigorous and longer-term. Five years of monitoring is insufficient to determine whether a created wetland will function as a self-sustaining ecosystem. Monitoring periods should extend to 15 or 20 years, with credit release schedules adjusted accordingly. Bankers who deliver genuinely high-functioning ecosystems should be rewarded with premium credit values. Those who deliver the bare minimum should not be treated equally.
Second, geographic displacement must be constrained. Credits should be required to offset impacts within the same watershed and, where possible, within the same community. The convenience of distant mitigation cannot justify the transfer of ecosystem services away from vulnerable populations.
Third, we need transparency. Credit prices, ecological monitoring data, and long-term performance assessments should be publicly accessible. The communities affected by wetland destruction deserve to know whether the promised restoration actually materialized — and whether it actually works.
Fourth, states must act. In the wake of Sackett, state legislatures have a responsibility to ensure that wetlands stripped of federal protection do not become sacrifice zones. State-level mitigation requirements, modeled on the best features of the federal program while addressing its weaknesses, are no longer optional. They are essential.
The Bottom Line
Wetland mitigation banking is a uniquely American experiment — the attempt to put a price tag on nature and let the market sort it out. In some places, it has produced remarkable results: degraded land transformed into functioning habitat, streams returned to their natural courses, thousands of acres permanently protected. In others, it has provided a convenient fiction — the appearance of environmental responsibility without the ecological substance.
The question is not whether we should have mitigation banking. The question is whether we have the honesty to measure what it actually delivers, the will to demand better when it falls short, and the wisdom to recognize that some things — a cypress swamp that took a thousand years to form, a bog that filters drinking water for a town downstream — cannot be replaced at any price.
Nature is not a balance sheet. But if we insist on treating it like one, we had better make sure the numbers are real.