Credits & debits for wetland mitigation

We developed a tool to calculate when a proposed compensatory wetland mitigation project will adequately replace the functions lost due to wetland impacts. This tool, Calculating Credits and Debits for Compensatory Mitigation (referred to as the Credit-Debit Method), applies only to freshwater wetlands.

The need for a function-based currency for the King County in-lieu fee program drove the original development of the Credit-Debit Method. However, it can be applied to other projects as an option for determining the adequacy of compensatory mitigation.

The Credit-Debit Method provides guidance for both regulators and applicants during two aspects of mitigation:

  • Estimating the functions lost when a wetland is altered. These are called debits.
  • Estimating the gain in functions that result from the compensation site(s). These are called credits.

Western Washington

  • Calculating Credits and Debits for Compensatory Mitigation in Wetlands of Western Washington: Final Report (March 2012)
    • Debit/Credit spreadsheets: There are two Microsoft Excel sheets that can be used to perform the calculations associated with Appendix E: Worksheets for Estimating the Adequacy of Wetland Mitigation. The first spreadsheet calculates the "debits" generated at the site where impacts are incurred. The second spreadsheet calculates the "credits" for an increase in functions at a mitigation site. The spreadsheets require the same information described in Appendix E and also contain the table of temporal loss factors and risk factors.

Eastern Washington

This information clarifies how to use the Credit-Debit Method to calculate the debits for long-term temporary wetland impacts (greater than one year) and the credits generated by restoring the impacted wetlands.

Note: For short-term impacts to emergent wetlands that will be restored on site within one year, it has been agency policy (Corps and Ecology) that little to no compensation is required, depending on case-specific factors. However, if the wetland contains a native emergent plant community, compensation likely will be required.

Temporary impacts are discussed in Section 3.2 of the Credit-Debit Method. If all the functions at a site are restored to their previous levels, compensatory mitigation would be needed only for the temporal loss of functions and the potential risk the restoration area would fail. If temporary impacts will be restored on site, use the following process:

  1. Calculate the impacts (debits) by applying the Credit-Debit Method to the area of long-term temporary impacts before the impacts occur. Use the temporal loss factor that matches the Cowardin class being impacted (e.g., emergent, scrub-shrub, forested).
     
    • If the long-term temporary impact is between one and two years, then the temporal loss factor will be a minimum of 1.5 or a maximum of 3.5. Use the concurrent temporal loss factor for the subject Cowardin class from the Appendix table in the Credit-Debit Method. 
       
    • If the long-term temporary impact is two years or more, then use the delayed temporal loss factor for the appropriate Cowardin class (a minimum of 3 and a maximum of 7).
       
  2. Calculate the credits by applying the Credit-Debit Method to the area of long-term temporary impacts. Estimate the site conditions that are expected after the proposed compensation activities have reached maturity. Use the risk factor in the Appendix table in the Credit-Debit Method. For on-site restoration, this factor is typically 0.67 for scrub-shrub and forested wetlands and 0.5 for emergent wetlands. The risk factor may need to be adjusted depending on the project and the extent and severity of the temporary impacts. It is possible that the proposed restoration could increase the functioning of the site if it involves replacing an invasive-plant dominated community with native plants.
     
  3. The number of credits the applicant needs to compensate for the long-term temporary impacts from the project is the difference between number 1 and 2 above.

If long-term temporary impacts won't be restored

If long-term temporary impacts won't be restored on site, use the Credit-Debit Method as if this was a permanent impact. For projects buying in-lieu fee credits, the temporal loss factor would be a minimum of 3 depending on the Cowardin class being impacted.

This information clarifies how to use the Credit-Debit Method to calculate the debits for indirect wetland impacts.

For indirect impacts calculate all of the debits for each of three wetland functions (water quality, hydrologic, and habitat) as if it were a direct impact, and then apply an adjusted ratio. Adjusted ratios start at 0.5:1* but can go up or down based on factors identified in the Interagency Mitigation Guidance, Part 1 (Version 2, Chapter 6B.4.7). Applicants/consultants will need to provide their rationale for the adjusted ratio proposed in their mitigation plan, even if it is 0.5. Based on the rationale provided, the agencies will determine whether the proposed adjusted ratio is appropriate during their review of the mitigation plan.

Example table: Credit/Debit calculation for indirect impacts

Wetland Water quality debits Hydrologic debits Habitat debits Total debits
Wetland A (0.25 acres of impact) 6.5 8.4 5.6 20.5
Credits required using adjusted mitigation ratio (0.5:1)* 3.25 4.2 2.8 10.25

*When indirect impacts are proposed, agencies typically require compensation at one-half of the recommended amount for permanent, direct impacts. When determining the amount of compensation needed for indirect impacts, the agencies consider how the proposed actions will affect the functions of the remaining wetland(s) and its buffer(s).