Governing law and entities:
US Conservation banking is enabled by the legal requirements of the United States Endangered Species Act (ESA). Specifically, section 7 requires federal agencies to consult with the US Fish and Wildlife Service (USFWS) regarding potential impact to threatened and endangered species, and section 10 requires "incidental take permits" and Habitat Conservation Plans (HPC) for those impacts. The USFWS is the principal agency that administers the ESA with respect to terrestrial and freshwater species, while the National Marine Fisheries Service is the lead agency with respect to marine and anadromous species.
On May 2003, the USFWS released the official federal guidance for the establishment, use, and operation of conservation banks. This guidance was closely modeled after the State of California's guidance for conservation banks, which has been in place since 1995. California is a leader in conservation banking, and uses its state Endangered Species Act and Environmental Protection Act to facilitate conservation banking with The California Department of Fish & Game (DFG) as the enforcing agency. While a "Conservation Banking Agreement" is the most standardized mechanism for creating bankable endangered species credits, other legal agreements have been used in the past, such as: wetland banking agreements, safe harbor agreements, habitat conservation plans, and memorandums of agreement.
The unit traded is most often an acre of habitat. Occasionally, due to specifics of an organism's ecology the unit may be a breeding pair or combination of habitat and the actual species, or in the case of fish and aquatic species the unit may be a liner foot of riparian habitat.
Under a "Conservation Banking Agreement", the sale of these units, or credits, is based on species conservation outcome rather than simply management action. This is to say, that a bank must demonstrate that the species are being conserved, not just that they are performing the habitat management thought be necessary. This is not necessarily the case for conservation banks established under the other agreements mentioned above.
A conservation bank's service area is based on biological criteria of the species involved and often a recovery plan. The US Fish and Wildlife Service must approve service area determination.
The Ecosystem Marketplace’s Speciesbanking.com
is the first initiative to track all conservation banks on a national scale. According to the State of Biodiversity Markets 2011 Update, there are 90 active conservation banks in the US and an additional 17 inactive and 19 sold out.
Conservation banks are usually created to provide endangered species mitigation credits for one of three uses: internal mitigation, sales to others, or a combination of the two. This means that buyers and sellers of bank credits are, in some cases, one in the same. Bank credit buyers can include government agencies such as a State's department of transportation, or private firms such as a real estate developer. Bank owners (or credit sellers) are correspondingly often those private firms or government agencies needing to mitigate, but increasingly private landowners and companies specializing in mitigation bank creation are becoming involved in the market. In addition to buyers and sellers, there are a number of intermediaries that assist in the conservation bank creation and operation phases. Among these are: non-profit environmental or land conservation groups, private consulting firms, capital investors, and government agencies.
Market Activity and Value
According to the State of Biodiversity Markets 2011 Update, there was a modest increase in conservation banks in the US. In 2010, 10 new banks were established, 6 of which were in California. One new bank was established in Florida in early 2011. There were some new (or relatively new) species in this set of conservation banks: fish species in California and Washington (coho salmon, steelhead trout, bull trout, and delta smelt); Florida panther, scrub jay, and sand skink in Florida; Carolina heelsplitter mussel in South Carolina; and the Cheat Mountain salamander and West Virginia northern flying squirrel in West Virginia.
California is still the largest participant in conservation banking in the US, with a total of 82 active and sold out banks. Very few new banks have been established outside of California, with just two additional banks in Washington, two in Florida, one in Utah, and one in Mississippi. Of the banks pending approval, the majority are located in California, with a handful in the Northwest and Florida.
There are currently 74,807 acres permanently protected under conservation banks in the US. The average annual acreage added to the program over the last 10 years was 4,398 acres.
Environmental Performance Requirements:
Under a "Conservation Banking Agreement", a bank owner must put the designated property into a permanent conservation easement with third party oversight, usually a non-profit or government agency. A "Conservation Banking Agreement" must include a science-based management plan for species and habitats, an operation and maintenance plan, as well as provisions for remedial action. These activities must be fully funded by the bank's endowment fund.
Bank owners are required to provide adequate funding for the perpetual operation of the bank. To achieve this, federal guidance recommends establishing a non-wasting endowment fund by depositing a fixed amount for every credit sold. In addition, the creation of a bank can require posting performance bonds for bank establishment and a maintenance period.
Land Area Protected:
The total amount of land under conservation easement as a result of endangered species credit trading (as established by a Conservation Banking Agreement or one of the other mentioned mechanisms) is currently estimated to be: 80,764 acres (as of 9/28/2009). To calculate the land protected by species conservation banking, bank size in acres was summed for all known banks.