Charles Etok Edwardsen Jr. Mitigation Bank Case Study
Case Study
Charles Etok Edwardsen Jr. Mitigation Bank
Protecting critical aquatic resources in northern Alaska
By James Freeman, Yale School of the Environment
May 2025
Problem
The North Slope of Alaska is an ecologically sensitive region that is home to the Inupiat people, an indigenous tribe known for their close connection to the Arctic environment and their traditional subsistence activities, including hunting whales, seals, and caribou. The Ukpeaġvik Iñupiat Corporation (UIC), an Alaska Native Corporation, owns 2,297 acres of critical wetlands there and owns and manages the Barrow Environmental Observatory BEO) located on those lands. The proposed expansion of the Observancy raised concerns about the impact on wetlands while the region’s residents were also struggling to find ways to promote sustainable economic development on the North Slope.
Solution
To prevent further development and increase land-based revenues for the Inupiat people, UIC, in partnership with Ecosystem Investment Partners, established a conservation easement and the Charles Etok Edwardsen Jr. Mitigation Bank.
The mitigation bank, the first of its kind in the region, offers compensatory mitigation credits for projects in the Arctic Coastal Plain Ecoregion. The credits it generates will be used to offset the wetland impacts of development on the North Slope and offer a new source of revenue and economic benefits to UIC’s Iñupiat shareholders, many of whom reside in nearby Utqiaġvik, Alaska, while ensuring that their subsistence rights and access to the lands are maintained. The project will permanently protect the habitat of 35 species of birds and 9 mammals. These include Steller’s eider, spectacled eider, and polar bear, all of which are federally designated as threatened species.
Unlike in many other parts of the United States, where mitigation banks can generate credits from the restoration or establishment of wetlands, streams, or other aquatic resources, there are fewer opportunities for high-impact restoration projects in Alaska’s relatively undegraded lands. In these and other “exceptional circumstances,” the Clean Water Act allows lands under “demonstrable threat” to be permanently conserved through a mitigation bank and to generate compensatory mitigation credits.
Outcomes and Benefits
UIC provides social and economic resources to over 3,800 Iñupiat shareholders and their descendants. While the mitigation bank protects wetland resources, it also preserves UIC’s Iñupiat shareholders’ access to the land, waters, and their traditional subsistence resources. UIC funds generated from the credit sales will benefit the UIC Land Development Fund, which supports the purchase, construction, and renovation of affordable housing units in Utqiaġvik for UIC shareholders and their descendents, as well as the development of commercial properties in Utqiaġvik to support the local community and economic development.
Financial Model
The Conservation Fund (TCF) administered an in-lieu fee (ILF) program in Alaska from 1998 until 2017. When TCF was unable to meet the compensatory mitigation obligations it had assumed, it reached out to EIP about establishing a mitigation bank on the North Slope. EIP entered into an agreement with UIC in 2018. Of the roughly 2,800-acre preservation project that the EIP and UIC partnership established through a conservation easement, credits from about 500 acres were used to satisfy TCF’s ILF liability. Credits from the remaining, approximately 2,300-acre mitigation bank, completed in 2024, will be used to compensate for future impacts.
EIP’s lease agreement with UIC creates a framework for partnership in permitting and operations of the mitigation bank. EIP covered the cost of permitting and design, established a long-term endowment to underwrite the project, and paid for the conservation easement. UIC and EIP will split the revenues from the credit sales after EIP’s expenses have been recovered.
Lessons Learned
EIP staff highlighted the importance of aligning stakeholder interests and working in partnership to manage financial risks. The partnerships between UIC, EIP, and TCF required coordination, patience, and a high level of trust. EIP assumed much of the initial financial risk in permitting costs; UIC, in turn, did not require EIP to obtain the easement up-front, but allowed EIP the time to ensure that the project was permittable before funding the easement. This limited the potential financial risk for both EIP and UIC and helped make the project feasible.
Another key consideration that EIP identified was finding a property that was big enough to meet the credit demand while ensuring investments at a cost that didn’t exceed revenue, with a margin to deliver a reasonable return to EIP’s investor base.
Next steps
After the mitigation bank was approved in 2024, a majority of the credits for the project were released and made available for sale. 745 credits have been released to date, with another 131 to be released in the future. Once all of the credits are sold, the preservation project is effectively completed. UIC will continue to do regular monitoring of the site to ensure there is no wetland destruction or unauthorized use.
References
Photo credit - image banner: https://ecosystempartners.com/wp-content/uploads/2020/07/DJI_0968-1.jpg
https://ecosystempartners.com/project/charles-etok-edwardsen/
https://uicalaska.com/our-lands/charles-etok-edwardsen-jr-mitigation-bank/
https://uicalaska.com/about-uic/
https://www.epa.gov/cwa-404/mitigation-banks-under-cwa-section-404
https://www.epa.gov/cwa-404/federal-guidance-establishment-use-and-operation-mitigation-banks