Wetland Resource Group Meeting March 9 1993

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WETLANDS VALUATION CLARIFYING CLASSIFICATION etlands classification has been heralded as a great compromise of wetlands regu- lation. Offering complete protection to, the most valuable wetlands and relief from some of the costs and delays associated with the current permitting process to developers of less valuable wetlands, a federal classification system promises a way out of the quagmire that has characterized the wetlands debate in recent years. But can a classification system actually satisfy these goals? Many developers and legislators who consider current wetlands regulation to be over - burdensome are looking to classification as a means to limit regulation of wetlands to those of highest valise. A classification system could expe- dite the permitting process for some applicants who want to develop in low -value wetlands and might otherwise be subject to the delays and costs in order to receive approval. Who should be the one to classify wetlands and establish value criteria? the White House? the Corps of Engineers? the Environmental Protection Agency ? wetland scientists? economists? Many opponents of classification are concerned that there is no objective way to determine what is a Ted Brown is vice president and general counsel. high -value wetland or a low -value wetland, and of Arvida, a development corporation in Florida, believe that all wetlands have important values and has extensive experience in wetlands and per- and functions and should be protected. Further- mitting issues: He is currently working on a hous- more, critics fear a formulaic methodology based ing subdivision within a portion of the historical on a set of criteria that may not accurately reflect east Everglades as well as developments in other states. the composite value of complex wetlands ecosys- tems. Invariably, some areas will be lost due to misclassification and difficulties related to weigh- ing disparate functions such as habitat values and flood control. In this forum, which took place at the Environ- mental Law Institute on October 13, 1992, repre- sentativesfrom three different perspectives —a pol- icy maker who administers the state program with a wetlands classification system in place, a natural resource economist, and a representative of the private sector— present their perspectives on wet- lands classification and valuation. Leonard Shabman is a professor at Virginia Tech in the Department ofAgriculture and Applied Economics. Over the last 20 years, he has written extensively on wetlands and related economic is sues. He is currently conducting an analysis on wetland valuation and mitigation banking. Patricia Riexinger has been the Wetlands Pro- gram Manager at the New York State Department 'of Environmental Conservation since '1983. She is a biologist by training. Leonard Shabman Part of the problem with the wetlands policy debate is that we do not spend enough time thinking about a national wetlands management strat- egy. You can't make sense of the classification issue until you have a manage- ment approach in mind. Therefore, I will spend most 4 NATIONAL WETLANDS NEWSLETTER of my time discussing general management issues, returning to the challenge of classification at the end of my remarks. Where are we today in wetlands management? We now agree that some wetlands functions are worthy of protection and even enhancement from the current levels. We have moved on a variety of policies to turn this agreement into results. And, the results have been encouraging. We have succeeded in sharply reducing agricultural losses, partly as a result of regulation, but mostly due to a sharp shift in the economic feasibility of land clearing and drainage for agri- culture. This was in part a result of changes in tax and agricultural policy made in the mid- 1980s. In effect, we have turned the agricultural market loose and the market has said that wetlands are not worth draining. The focus of the wetlands policy debate at this time is on