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I've always been rather skeptical about the practice and theory of mitigation banking, which aims to offset the destructive effects of paving over wetlands by creating or protecting wetlands elsewhere.

Now, a study of 12 mitigation projects in Ohio confirms that mitigation banking is fast becoming natural capitalism's version of homeopathy:

[T]he study found that the failing banks not only fell short of Ohio's more scientifically advanced wetland assessments, they also fell short -- by large margins -- of the performance standards the Army Corps of Engineers and federal EPA had set for them.

The "scientifically advanced" assessment is that there's something more to wetlands than water and dirt; unless a site performs the actual function of wetlands, it can't be considered a replacement for wetlands. The more pragmatic view is that creating a couple of glorified puddles will let you develop marshlands that were previously off-limits, while enhancing your public image as "a company that cares."

See if you can guess which side wins most of the arguments.

Not that there've been all that many arguments, given the perfectly rational self-interest of the parties involved:

President of the National Mitigation Banking Association Craig Denisoff says, "we'd like to see higher ecological standards and adaptive management but we build what we're asked to build."

Isn't it amazing how often the liberating power of the free market turns people into mere automata?

Just as the solution to the destruction of wetlands is more destruction of wetlands, the solution to the failure of mitigation banking is more mitigation banking:

To increase the odds of mitigation banks' success, most agree, the Army Corps and federal EPA need to take a more intensified watershed approach to mitigation so that wetlands remain where they are needed most. More rigorous performance standards that remain flexible enough to reflect emerging scientific knowledge should be established. And more regulators – preferably scientists who understand wetland ecology as opposed to agency bureaucrats who understand numbers – should consistently and scientifically monitor banks' status at creating wetlands.

No argument here. But the thing is, if you had these factors in place - if it were possible to put them in place, given crony capitalism's appetite for malignant growth - there'd be a lot less need for mitigation banking. This is the same Army Corps and EPA, remember, whose lax oversight contributed greatly to the problem that mitigation banks are now supposed to fix under the watchful eye of the Army Corps and EPA.

While we're waiting breathlessly for "more rigorous performance standards," I've got a "no net loss" solution to the problem of Devil's Night arson in Detroit: we let the arsonists burn down as many inner-city houses as they want, as long as they build the same amount of housing on the edge of town, using old packing crates, tarpaper, and carpet remnants.