University of Gothenburg project evaluates U.S. mitigation banking economic performance
6 May 2021
The Department of Economics at Sweden’s University of Gothenburg has purchased EASI’s complete Mitigation Credit Price Report (MCPR) to round out a business study of the U.S. compensatory mitigation credit marketplace.
MCPR data offers a look at the real market value of mitigation “offsets.” Agency-approved offsets, also called mitigation credits, compensate for development impacts to ecologically valuable wetlands and streams protected under the U.S. Clean Water Act, or certain rare species and habitats protected under the U.S. Endangered Species Act.
Postdoc researcher and Google Scholar, João Manuel Lameiras Vaz, arranged for the university to purchase the mitigation credit price data. Vaz is graduate of the University of Montana and the Nova School of Business & Economics in Lisbon, Portugal.
Although details of the university’s research are scarce until the study is complete, Vaz hinted that the economics project uses the U.S. Army Corps of Engineers’ RIBITS database “to evaluate the evolution of the offsets market.”
RIBITS is an online information platform describing the geography and operational characteristics of federally-approved mitigation banks.
“RIBITS does not include price information on credit transactions,” Vaz reported, “which is something that we want to consider in our study.” EASI’s sales price records for mitigation credits, according to Vaz, “could be shown in relation to credit providers (mitigation banks). This is the type of data that we’d be interested in acquiring. We want to link bank data from the RIBITS database to price information about credits sold by any one bank.”
According to EASI’s William Coleman, “This is exactly why the MCPR was created – to show comparable prices for similar type mitigation offsets across the U.S. mitigation banking industry. This information is extremely hard to find, especially in a one-stop dataset. We were happy to support the University of Gothenburg’s project.”
It turns out this is the second time European interests have acquired MCPR data. “The Institute for Energy Research in Stuttgart, Germany was the first,” said Coleman. “The Europeans call it ‘habitat banking.’ We’ve spoken to the European Investment Bank on several occasions about mirroring the U.S. program in mainland Europe. In that part of the world we believe the U.K. is likely to be the first to implement a habitat banking program like the U.S.”
Created in 2014, the EASI report has grown to include over 1700 mitigation credit price points or “referents”, as Coleman calls them. “We have gathered wetland credit values from as early as 1990,” according to Coleman. “This is only a few years after wetlands mitigation banks were authorized. Our data set grows and diversifies from there so we are able to describe both national and regional trends. Plus, we adjust the data using the Consumer Price Index so users can study the entire dataset as if it the market value was present day.”
“The MCPR supports landowners who want to learn more about property eco-asset value. Developers use it to lower their compensatory mitigation costs. And investors use it to flush out a business case for investing in future mitigation banks,” Coleman explained. “It’s a one of a kind tool.”
For more information about the MCPR, see the EASI website at easillc.com, or contact EASI directly at firstname.lastname@example.org.