'Forbes': Wetlands restoration shows 'private capital is key' to environmental protection
Wetlands restoration over the past several decades is a prime example of the role government policy can play in catalyzing private capital markets to meet environmental and social challenges, according to an article published online by Forbes today. The 1972 Clean Water Act and subsequent legislation spurred the creation of "mitigation banks," overseen by the Army Corp of Engineers, to finance wetlands restoration. By restoring wetlands, the article explains, these mitigation banks create credits that private and public developers can buy to offset damage to wetlands caused by their projects. Because the system speeds the approval process—and time is money—developers are willing, if not happy, to buy mitigation credits. The developer payments in turn repay the private investors who front the money for banks' restoration work. In the decades since the first commercial mitigation bank application in 1991, more than 1,900 mitigation banks have been established, and by 2008, between $1.1 billion and $1.8 billion was being spent to restore functioning wetlands annually, protecting approximately 24,000 acres per year. "As government funding becomes more constrained, and limited philanthropic capital is available, wetlands restoration shows that private capital is key to large-scale environmental protection and restoration," the article argues. Read the full article.
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