CWA In-Lieu Fee Mitigation: Project and Programmatic Risks

Abstract

In 2008, after prompting by the U.S. Congress, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (the Corps) issued a regulation governing compensatory mitigation under the Clean Water Act (CWA). The agencies’ primary goal was to improve the effectiveness of mitigation projects to offset the impacts of filling wetlands and streams. The 2008 Compensatory Mitigation Rule was also designed to level the playing field for the three types of mitigation providers: mitigation banks, in-lieu fee (ILF) programs, and permittee-responsible mitigation.

After a decade of experience with this regulation, it is appropriate to reflect on its implementation. Although much has been written about mitigation banks, less attention (in the literature at least) has been paid to ILF programs and permittee-responsible mitigation. This Comment focuses on ILF programs.

Keywords: compensatory mitigation, Clean Water Act, wetlands, streams, in-lieu fee programs

JEL Classification: K32, K23, Q2, Q25, Q28