There is no question that significant environmental damage was caused during the early decades of America’s industrial revolution. Though America’s industrial era may have created a middle class and brought unprecedented wealth and prosperity to the economy, it also came with an environmental cost.
Now, bills for some of those environmental impacts are coming due.
Since the 1970s and ’80s, a range of federal and state environmental laws and regulations have imposed protection measures for water supplies, wildlife and the overall environment. The U.S. Endangered Species Act and the Clean Water Act are only two of the many statutory requirements at both federal and state levels that have ushered in an era of environmental accountability. Other key environmental requirements are stipulated under the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and the Toxic Substances Control Act (TSCA).
Though cleanup costs for many environmentally degraded sites can be staggering, there are some remedies in current laws and regulations that can soften the blow. One such option is restoration of a site to create ecological restoration credits.
How It Works
Ecological restoration credits revolve around the concept of “ecological lift,” which simply means restoring a tract of land or even multiple parcels that have been damaged by past industrial or commercial activity. The goal is to “lift” the site back to a state of ecological functionality so it can support habitats for various species of wildlife. Ecological restoration often involves varying levels of remediation such as removing structures, contaminated soil and other materials.
Ecological restoration and remediation credits are generally driven by the federal Endangered Species Act and the Clean Water Act. Though both laws cover different aspects of environmental and species protection, they work in tandem to specify the rules that apply to mitigation and reintroduction of native vegetation and other natural materials as well as protection of surface water necessary to support native wildlife. These federal laws also create rules governing the system of environmental credits that can be applied to mitigate or offset costs for other developments or for remediation of the site being restored.
Properties that are potential candidates for mitigation generally have attributes that have been degraded from an ecological perspective by past industrial, commercial or agricultural activities. For example, a site could have been home to a wetland area that was filled in or it could have had forested acreage that was cleared for timber.
Though many attributes are evaluated and ranked for selection of a site for ecological restoration, the important factor is to establish a baseline condition that can be improved from an ecological perspective. That improvement creates the lift, which in turn generates the credits that can be applied to offset expenses of remediation on that specific site or applied to other projects that may be creating environmental impacts.
A Case Study
In one real-life example, a former lumber mill site that had been in operation for decades became a source of mitigation credits after a series of cleanup and ecological restoration efforts. The site had become contaminated by dredge spoils placement and lumber mill operations. Dredged sediment from the riverbed was heavily contaminated by heavy metals, PCBs (polychlorinated biphenyls) and other hazardous materials that had infiltrated the riverbed from surrounding heavy industrial activities along the river. The former mill site had also been contaminated by oil and other materials that had seeped into the ground.
The remediation project began with extensive testing and boring to sample for contaminants and determine the extent of the future design surface for restoration efforts. This information was crucial in developing a plan for the conditions that would be in place for the “leave surface” — or area left following the restoration — that would meet environmental criteria. The project included demolition of several thousand square feet of industrial buildings, removal of underground tanks and building foundations, and removal of more than 200,000 cubic yards of contaminated soil and debris.
Following the cleanup, the site was restored to a tidal riverine system that met the standards for a major environmental benefit and lift. The mitigation credits generated from the project will offset the remediation costs.
Turning Liabilities Into Assets
Property owners are increasingly considering ecological restoration to generate mitigation credits that can be sold to other developers, enabling them to offset environmental impacts on their own property development.
Documentation of the ecological lift is crucial if this path is chosen. Both construction and other cleanup activities leading up to the “leave-behind” site must be documented. Conditions at both the start and finish must be quantified to support any credits that may be awarded by environmental authorities.
Before any demolition, soil removal or restoration activities begin, it is necessary to obtain approval from the various regulatory agencies for activities justifying those credits. It is simply prudent to move all the way through the approval process before spending millions of dollars on cleanup and restoration.
The approval process stipulates what must be done to achieve certain biological benchmarks with construction, planting and future ecological benchmarks for the life of the project. As the project hits those benchmarks, a series of credit releases occur to cover costs of construction and to offset a wide range of project risks, including closure and protection from future environmental liability.
Not only do property owners gain benefits from removal of liabilities from their balance sheets, they also gain the potential of a revenue stream from property that had been a stranded asset. We can leave it as the pristine restored biological site, without any unforeseen environmental issues.
With ecological lift, paired with prudent remediation strategies, property owners and developers no longer need to bear the full brunt of financial and economic costs of cleaning up for past practices.
Custom remediation plans help projects move forward by addressing specific challenges through the most appropriate delivery model.
