Agencies with regulatory authority are charged with setting the rules or standards used to demonstrate compliance with state and federal laws, including environmental laws. Typically, regulatory agency staff focus on stopping or limiting specific harmful acts, such as industrial discharges. But regulatory staff recognize that a more holistic approach of restoring entire ecosystems to health is more likely to produce the results the regulations are trying to achieve—or better. For this reason, regulatory staff are interested in market-based approaches to conservation.

In Oregon, several agencies with regulatory authority could play a role in the marketplace:

• Oregon Department of State Lands (wetland mitigation banking)
• U.S. Army Corps of Engineers (wetland mitigation banking)
• U.S. Environmental Protection Agency (water quality and air quality trading)
• Oregon Department of Environmental Quality (water quality and air quality trading)
• Oregon Department of Energy (air quality trading)
• U.S. Fish and Wildlife Service (endangered species conservation banking)
• National Marine Fisheries Service (endangered species conservation banking)
• Oregon Department of Water Resources (water supply trading)

What is the role of regulatory agencies?

In ecosystem services markets, regulatory agencies do the following:

• Set the goals for the market (no net loss in wetland mitigation banking, for example, or a total maximum daily load and waste load allocations in water quality trading).
• Agree on the standards and protocols through which credits are generated and measured.
• Help structure the market so that it works smoothly and has safeguards against market failure.
• Monitor transactions.
• Enforce compliance with regulations by ensuring that credits are performing the ecological service that the regulations are intended to protect.