Offset Banking - A Way Ahead For Controlling Nonpoint Source Pollution In Urban Areas in Georgia

by Mark Morrison; L. Taylor

May 1, 2002
Nonpoint source discharges remain the major cause of non-attainment of water quality goals in urban areas within Georgia. Hence controlling nonpoint source discharges will be a critical part of achieving water quality goals within urban areas. Efforts to reduce nonpoint discharges are expected to intensify with implementation of Total Maximum Daily Loads (TMDLs) and changes to National Pollutant Discharge Elimination Program (NPDES) permits. Given the need to reduce existing nonpoint source discharges in many urban counties within Georgia, it is likely that regulatory authorities will become more circumspect about approving new developments with negative environmental impacts. Thus, given current policies, conflicts between environmental and developmental goals are expected to increase in future years. In this working paper we discuss the use of Offset Banking, which is flexible mechanism that can facilitate development, but with no net environmental impact. Indeed, it is possible to design an Offset Banking program that results in net environmental improvements from additional development. As well as benefits to the environment, offset banking can provide benefits to developers by enabling further development to occur, reducing overall nonpoint source discharge control costs and reducing uncertainty within the development process. Offset Banking is conceptually similar to wetland mitigation banking, except that it focuses on the control of nonpoint source discharges. In an Offset Banking program, an "Offset Bank" undertakes a series of projects to reduce nonpoint source discharges. In return for undertaking these projects, the bank receives offset credits. When new developments create net environmental impacts, they must offset these impacts by purchasing credits from an offset bank with credits available from a nearby project. In this way, development can proceed without there being an overall negative impact on environmental quality, and potentially an environmental improvement if developers are required to purchase more credits than the pollution generated. Offset Banking thus represents a pragmatic solution to future conflicts between developmental and environmental goals within urban areas. Working Paper #2002-004
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