Mitigation banking is a mechanism that allows individuals or organizations to offset the impacts of development projects on wetlands, streams, and other natural habitats by preserving, creating, or enhancing equivalent habitats in other locations. This approach can be used to meet regulatory requirements for compensating for environmental impacts resulting from development activities, such as building roads or housing developments.

Under a mitigation banking program, a bank is established that maintains a pool of credits that can be used to offset the impacts of development projects. The credits are generated through the conservation or restoration of natural habitats, and can be purchased by developers or others who need to offset the impacts of their projects. The credits can then be used to satisfy regulatory requirements for compensating for environmental impacts, allowing the development project to proceed.

Mitigation banking can be a useful tool for balancing the needs of development with the need to protect and restore natural habitats, but it is not without controversy. Some critics argue that it may not always effectively compensate for the impacts of development, and that it may create incentives for developers to destroy natural habitats in order to generate credits for sale. Others argue that it can provide a more efficient and effective way of conserving and restoring natural habitats than traditional regulatory approaches.

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