Swamp Swaps: The 'Second Nature' of Wetlands

Abstract

American wetlands were once valued only as sites for their own destruction. Today markets are increasingly assigning values to intact wetlands for purposes such as mitigation, water quality protection, rare species support, greenhouse gas diminution, and biofuel production. Federal law has tried to protect wetlands’ wetness but offers few guidelines for wetland use. Market-oriented regulation may encourage efficient use of wetlands, but only if newly-forming markets can quickly acquire the confidence of investors who are suspicious after recent market failures. New wetland management techniques may produce real benefits, and are worth encouraging as long as large areas of natural wetlands are protected.

Keywords: wetlands, carbon market, methane, mitigation bank

JEL Classification: K32