Environmental banks offer common ground for environmentalists and developers

Developers and environmentalists rarely agree on issues. However, environmental banks provide a way for developers to avoid costly permits and environmental red tape while environmentalists preserve animal habitats.

An environmental bank is land permanently reserved for the protection of critical habitat. These banks, also called mitigation banks, are categorized by type (e.g., wetland or species). Private entrepreneurs purchase large tracts of land and hire experts to create, preserve, restore, or enhance habitat. The owner then sells credits equivalent to a specific number of acres of this permanently preserved land to developers at a profit. Once a developer’s credits equal the habitat his project will disrupt, he is exempt from all permit responsibilities and can immediately proceed with the project.

"Environmental banks create profits for entrepreneurs, while letting environmental experts oversee the protection of the threatened habitats," says Real Estate Center at Texas A&M University Chief Economist Mark Dotzour. "It’s a win-win situation for the developer and the environment."

When approved, the Palacios Wetlands Bank, near a turtle refuge in Matagorda County, will be the largest environmental bank in Texas, with 2,564 acres of privately held wetlands. Visit the Real Estate Center’s Web site at http://recenter.tamu.edu/pdf/1551.pdf for a free report on environmental banking.

Illustration © Artville.

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