The Challenge of Implementing Market-Based Programs by Regulatory Agencies

Since the publishing of the original federal wetland mitigation banking guidance in 1995, wetland mitigation banks have proven to be successful ecologically and economically. However, the efficiency and effectiveness of these programs have been hindered by a regulatory process that neglects the financial realities of private investment and market dynamics. This article will explore some of the issues arising from the implementation of market programs by nonmarket entities—the regulatory agencies—and suggests some potential recommendations to improve performance of the mitigation banking program.