Landscape-level mitigation: conservation and development reconciled

The framework for mitigation of environ-mental impacts in the United States is in pressing need of a new approach. Current-ly, compensatory mitigation measures, re-quired or suggested by regulation under a host of federal and state laws, are an afterthought in the permitting process. They are considered late in the game in an ad hoc, limited and fragmented manner — or not at all. A new, comprehensive model based on landscape-scale initiatives is called for. Such an approach plans for development before-hand by identifying suitable areas as well as areas in need of enhancement and takes larger, watershed-wide restoration sites into account. It would allow and in fact encourage banking of ecosystem benefits so as to combine them in priority miti-gation areas encompassing all or most of an entire biological-geological region. Compensato-ry projects may be sited on either public and private lands, and the concepts outlined in this article for improving their use apply in most cases to both.

Consider this example. In the Mojave Desert in the southwestern United States, increasing num-bers of solar power plants are being proposed in response to rapidly growing demand for non-fossil energy sources, some mandated by state renew-able portfolio standards. The mitigation of impacts that such plants might make to the habitat and populations of wildlife such as the desert tortoise is required under federal and state endangered spe-cies laws, or suggested under environmental assess-ments. Over the past several decades, mitigation ef-forts undertaken in association with similar energy infrastructure facilities were scattered across the landscape. These patchwork efforts gener-ally provided modest, localized benefits. They left very much in question the long-term viabil-ity across landscapes of wildlife populations, including that of the desert tortoise but also the other endangered or threatened species that underpin an eco-region.

Mitigation programs — no-tably those resulting from high-way, energy, water, and other infrastructure projects — fol-low a somewhat standard hierarchy. First, negative environmental impacts should be avoided, for in-stance by project alternatives or re-siting the devel-opment to a more suitable location. If avoidance is not feasible, science-backed measures should be deployed to minimize harms. Finally, where envi-ronmental impacts are inevitable, there should be appropriate compensation by means of compensa-tory mitigation. Also entering the picture is mitiga-tion banking: focused investment in environmen-tally preferable, wide-scale areas that have been pre-served, enhanced, restored, or created. Variations on this process are in-lieu fee mitigation (developer payment to a program that conducts the resource preservation, enhancement, restoration, or creation activities), and permittee-responsible mitigation (preservation, enhancement, restoration, or cre-ation activities, either on-site or off-site, conducted directly by the developer). These policies are con-ceptually sound, but have been unevenly imple-mented.

Over the past several decades, compensatory mitigation efforts undertaken under Section 404 of the Clean Water Act, Sections 7 and 10 of the Endangered Species Act, and the National Envi-ronmental Policy Act’s environmental assessment provisions were scattered across the landscape. Adopting a landscape approach would be vital to bringing mitigation to its full potential. Looking at the desert tortoise and other listed species, considering their ecosystems as a whole would make it possible to determine more adequate development sites beforehand and to deploy mitigation dollars more effec-tively to preserve habitat.

This is where landscape-level mitigation comes in: avoiding and minimizing environmental impacts is still a priority, but when those effects need to be compensated for, in-frastructure project dollars will flow to larger, previ-ously identified ecosystems where they can make a bigger, longer-term difference in habitat preserva-tion and species recovery.

The idea of landscape-level mitigation has been embraced by the White House. Pres-ident Obama has directed the Steering Committee on Federal Infrastructure Per-mits to modernize the federal permitting of infrastructure projects. I was a part of a policy lab group at Stanford Law School that worked to de-velop recommendations for the Steering Commit-tee. Working with David J. Hayes, former deputy secretary of the interior under both President Clin-ton and President Obama, our group came to un-derstand that in practice, compensatory mitigation for infrastructure projects in some cases revolves solely around the impacts for which specific regula-tory requirements exist, particularly wetlands and endangered species. In many other circumstances, however, permitting agencies have wide discretion to determine appropriate mitigation measures for unavoidable impacts identified through NEPA re-views, and permitting agencies typically have dis-cretion under their authorizing statutes, and as part of the NEPA process, to condition permits and other approvals on compensatory mitigation com-mitments.

The tendency by permitting authorities to fo-cus on wetlands and ESA impacts — sometimes to the near-exclusion of other types of environmental impacts such as on air quality, historic and cultural sites, aesthetic resources, and affected communities — means that some of a project’s impacts get short shrift. Also, when con-sidering how to compensate for unavoidable impacts, off-site mitigation typically leads dis-proportionately to patchwork, one-off mitigation require-ments that may generate lim-ited environmental benefits.

Region-wide mitigation planning could provide the ba-sis for a more holistic approach to compensating for project impacts. It could produce more significant results by focusing on key landscapes that have well-documented en-vironmental values that can be enhanced by miti-gation-related investments. Such an approach will facilitate mitigation for one important, unavoidable — but often unaddressed — negative impact of large-footprint infrastructure projects: habitat frag-mentation. On-site and small parcel mitigation are, of course, desirable as means of minimizing local impacts, but they are by definition unable to address fragmentation. However, a combination of those ac-tions in conformance with the mitigation hierarchy, and with compensatory investments that are direct-ed toward significant, landscape-scale assets, would be an effective and balanced means of addressing both local impacts and fragmentation issues.

With this scenario in mind, establishing a miti-gation system that focuses on promoting well-recognized indicia of environmental improvement on a landscape scale, covering watershed health, species health, and habitat health, is possible and preferable. Although there is a lot to learn from the ESA/habitat and CWA wetland/stream banks experience, a comprehensive approach involving other laws (notably those governing transporta-tion, energy, and air quality) would, when feasible from an environmental integrity standpoint, allow a developer to satisfy all of the project’s mitigation requirements by paying into a bank encompassing an entire landscape.

Under such a framework, mitigation require-ments in the CWA and ESA and other programs would be satisfied through general benefits to wa-tershed and species health associated with the re-gional mitigation planning focal areas. In specific situations it still might be appropriate to imple-ment more targeted and site-specific mitigation in order to satisfy compensa-tion requirements. Projects in remote desert areas that entail impacts to unique and highly sensitive species, or water con-cerns — for instance the Ivan-pah solar plant in California — are illustrative of this latter case. Another example is wind farms: their environmental impacts are relatively minor compared with those of fossil fuel production, but a 2010 National Wind Co-ordinating Committee report of peer-reviewed research docu-mented bird and bat mortality due to collisions with wind tur-bines, changes in air pressure caused by spinning turbines, and habitat disruption.

Under this proposed approach, a develop-er should be able to resort to a bank at an ecologically preferable, landscape-scale site to address mitigation obligations. Coordinated work among agencies, chal-lenging though it may be, would be called for. Hav-ing agencies that already have authority to require mitigation lead the process would likely facilitate implementation, both from an operational and a legal standpoint. Agency involvement in landscape-level banking should take place in a programmatic manner, to ensure that mitigation issues will no longer be addressed in a delayed and incomplete fashion. By making mitigation a one-stop shop for the developer, a comprehensive banking policy would attain a desirable level of predictability, expe-dite the permitting process, and lower transaction costs. Importantly, it would also enhance environ-mental and other societal values.

The comprehensive approach to mitigation aims at developing a workable process based on the proposition that landscape-scale investments, where environmental benefits are tangible and will be assured, should be the priority. This ap-proach is clearly preferable, both environmentally and administratively, to time-consuming efforts at developing specific determinations of impact and harm and the development of one-off mitigation projects.

Further, advance planning to identify prime spots for banks in public and private lands, in con-nection with other program-matic environmental studies, are a relevant step of a sound, conservation-based mitigation policy. Environmental impact assessments could identify be-forehand the effects of several types of developments on a certain landscape, or regional management plans could deal with the efficient placement of land-use activities and infra-structure developments across a larger area. They could eas-ily, with no need for substan-tial additional resources, ex-pand their scope to include identification of prime areas for siting mitigation banks. Those previously identified areas could be later tiered under a faster and simpler procedure for determining, in advance of the permitting process, the most adequate spots for the development of specific projects.

Advance mitigation siting would basically imply that the team of experts in charge of regional plan-ning processes includes in its work the identifica-tion of public and private areas that are best suited as mitigation opportunities, by banks or otherwise. Such work could help identify in advance mitiga-tion requirements that are scaled in terms of degree of environmental harm associated with specific ar-eas and duly matched with off-site regional mitiga-tion opportunities.

Action to lower transaction costs is in order not only for developers using banks, but for bank implementation itself. Advance mitigation siting would send a clear signal to the market that banks are available to mitigate environmental harms. It would also help to attract philanthropic and other public and private dollars.

It is also important to encourage voluntary ac-tion so as to reap as many environmental bene-fits as early as possible, and to preempt the need for mandatory measures. A policy statement allowing developers to offset voluntary mea-sures as credits against further requirements would confer an extra level of predictability to the system and set proper incentives. The example of the greater sage grouse illustrates the potential of this approach. The prospect of a species listing decision be-ing made under the ESA shows the impending need for swift policy decisions with regard to sage grouse conservation, with an emphasis on pre-listing vol-untary initiatives. The fact that listing has been warranted but so far precluded allows policy-makers to seize this opportu-nity to foster voluntary action and to discourage passivity and deployment of “shoot, shovel, and shut up” tactics — illegally killing endangered species to avoid discovery of their presence in a tract of land slated for development.

This approach is superior from the perspective of environmental integrity to ESA Candidate Con-servation Agreements with Assurances. Under a CCAA (which is limited to non-federal lands), the landowner receives assurance that no further con-servation measures will be required if the agreed-upon efforts fail; hence, the burden of adopting additional measures must be borne by the govern-ment or other stakeholders. In contrast, under an early-offset system that allows voluntary conserva-tion actions to be taken prior to a species listing, if said actions fall short of the expected results the burden of further measures will not be fully trans-ferred to third parties, but every single initiative will be fully accounted for and offset as a credit against such measures.

Establishing proper incentives to encourage voluntary pre-listing measures fosters landscape-level action. The greater sage grouse is known as a landscape-scale bird, because it needs large expanses of territory as habitat for the various stages of its lifecycle. Also, much of the West’s natural gas, oil, coal, and wind resources coincides with sage grouse habitat. If a clear set of rules is put in place, infra-structure developers may be encouraged to invest in large-scale voluntary action entailing more habitat benefits than the ad hoc, crazy-quilt, small-parcel approach.

A policy statement concerning voluntary action could represent an opportunity to improve on the no-net-loss rationale, by potentially accruing and measuring net benefits from voluntary initiatives; metrics are particularly impor-tant here. Incentivizing such initiatives makes sure that the accrued benefits will be fully taken into account as cred-its should there be a need for further action. If such a test of applying net benefit to a more limited scope of action is suc-cessful, it might be later ex-panded and adopted as a new general standard for compensa-tory mitigation.

Any surplus created by the net-benefit approach for volun-tary action could be accounted for as a premium when the off-set is done, to make up for the fact that the prevail-ing rationale for mandatory mitigation is the lower standard of no-net-loss. Consider, for instance, that certain voluntary measures are undertaken in order to preempt listing of a species under the ESA. By definition, applying the no-net-loss standard to such an initiative would be inappropriate, since the expected outcome of successful preemptive ac-tion would be improvement of the status quo. Sup-posing that the voluntary measures do attain an increase in the number of species individuals — a net benefit, but not to the extent necessary to avoid listing — such net benefit could be fully credited if further measures turn out to be required.

In sum, this comprehensive approach would be based on advance planning that would identify, by means of programmatic studies, the best sites both for infrastructure projects and for corresponding mitigation. In addition to streamlining workflows, clearer siting rules would also send a signal to the market that the establishment of mitigation banks and other voluntary conservation mechanisms that conform to landscape-scale planning efforts would be welcome developments.

One of our policy lab’s goals was to make recommendations for a mitigation sys-tem that would address a wide variety of compensation requirements under a single procedure. The goal was to improve outcomes for species health and habitat health while speeding up regulatory review times. By doing so, we could streamline the work of both developers and regulators.

Reviewing our two species examples proves the relevance of the landscape-scale approach to mitiga-tion. Attempts to protect the habitat of the greater sage grouse are of particular interest because of the ongoing Fish and Wildlife Service formal status re-view of this ground-dwelling bird under the ESA.

The prospect of a potential listing has attracted significant attention from 11 western states and from developers, such as oil and gas companies and wind-energy companies, whose future infrastructure in-vestments would be affected. A large multi-agency group is working to inventory — at a landscape scale — the bird’s remaining habitat. The group’s goal is to identify important habitat strongholds for the spe-cies, some of which may be in-sufficiently protected and vulnerable to being lost. If more stringent regulations for greater sage grouse habitat come into play, plans to mitigate at the landscape scale may well become highly relevant and particularly useful in siting new infrastructure facilities.

The other example requires considering the fate of the threatened desert tortoise. In a pilot effort, in June the Bureau of Land Management auctioned off to three development groups a total of six sites in the Dry Lake Solar Energy Zone in Clark County, Nevada, about 15 miles northeast of Las Vegas. The sites cover a total of about 3,083 acres. Importantly, the successful bidders were able to take into account per-acre mitigation costs estimated by BLM, based on the Regional Mitigation Strategy for the zone is-sued last March. The landscape-level strategy made the mitigation of impacts on desert tortoise habitat an integral part of the planning process.

Members of the conservation community and developer representatives appear to be pleased with the auction results. The Wilderness Society issued a press release reporting that “the auction is significant not only for this specific parcel’s clean energy potential, but because it indicates the tre-mendous progress our federal agencies have made over the past decade to find smart, responsible ways to develop clean energy on our public lands.” And in September, First Solar filed with Nevada regulators for permission to proceed with plans to build a 200-megawatt renewable energy facility at the site.

A final merit of this approach is that it could set an example to be followed by other nations. Brazil, for instance, has an early assessment system that has been in place for many years; mitigation measures are deter-mined at an initial stage of the permitting process. It is, how-ever, subject to costly and time-consuming one-off analyses. Payments are generally chan-neled to governmental funds. As a result, developers have lim-ited information with regard to the use of their resources, and, from a policy standpoint, rel-evant opportunities for engag-ing stakeholder participation are lost. Should Brazil adopt a landscape-level planning model, mitigation needs and development siting could be matched, stakeholder satisfaction could be increased, and overall more environmental benefits could be reaped.

Developing a workable mitigation framework based on landscape-scale investments with tangible environmental benefits is both environmentally and administratively superior to the prevailing model of ad hoc mitigation projects. Such a holistic approach has the potential for both simplifying the permit-ting process and achieving better environmental re-sults — a clear win for all stakeholders and for our most-cherished landscapes.

*Alessandra Lehmen is a lawyer admitted in Brazil and in New York. She holds an LL.M. degree in environmental law and policy from Stanford Law School, where she was a Woods Institute Rising Environmental Leaders Fellow, the winner of the Olaus and Adolph Murie Award for best written work in environmental law, and a member of the board of the International Law Society. She also holds J.D., LL.M., and Ph.D. degrees in international law from the Federal University of Rio Grande do Sul and an M.B.A. from the Getulio Vargas Foundation of Brazil.

**Photo by Ethan MillerAFP/Getty Images. Heliostats at the Ivanpah Solar Electric Generating System are seen from above on March 3, 2014 in the Mojave Desert in California near Primm, Nevada.

***This article appeared originally in the Environmental Law Institute's Environmental Forum, Volume 32, Number 2 ? March/April 2015.