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Green Ponzi Scheme

Stream “Restoration” Project Facilitates Controversial New Development

Mitigation Deal Masks Lack of DEP Enforcement & Flaws with Concept

Green Ponzi scheme – looks like a Wall Street transaction? You figure it out

The headline in today’s Bergen Record story sounded like some good news: Cleaning a stream in Emerson Woods will help Oradell Reservoir.

I mean, who would have a problem with a clean stream and protecting a reservoir, right?

Well, as I read the story, and learned how the so called “stream cleaning” project originated and was designed and funded, I now do.

The regulatory policy behind this deal is based on the idea that its OK to destroy one place, and then off set that damage by partially fixing up some other place.

Or the notion that restoring existing damaged natural resources or pollution problems can only be funded by creating more new development or pollution sources – the causes of the problem to begin with. Kind of like funding cancer research with cigarette taxes.

DEP regulators call this “mitigation” or “net environmental improvement”.

The whole idea is an expression of hubris and a fool’s errand.

So, let me use an analogy to illustrate what’s really going on here.

Suppose an arsonist burned down your neighborhood.

After an intense manhunt, the police catch the felon. But, after reviewing the case,  a prosecutor decides that everything is OK, just as long as the arsonist mitigated the destruction of your home and neighborhood by building a few new temporary shelters somewhere else nearby.

How crazy would that be?

But that’s what the policy is and what DEP routinely does in the process of allowing destruction of wetlands, streams, forests and toxic soil and groundwater pollution. They act like the prosecutor letting the arsonist off the hook.

Adding insult to injury, after the fact, to facilitate the prosecutor’s deal, some out of town “green” group comes along and makes a few bucks covering the prosecutor’s ass from media criticism and flack from the burned out neighbors – all while working as the go between the arsonist and the prosecutor – and providing favorable PR and generating positive news stories.

So, let’s take these issues one at a time, and pierce this Green Ponzi scheme.

A full analysis of this situation really requires site specific field work and DEP file review, but I will work off only the news stories. So, due to those sources, bear with me as I may get a few things a little wrong, but in the main my policy arguments hold up to scrutiny and are supported by science.

I) “Mitigation” often substitutes and provides cover for lack of enforcement

Based on reading the story, it sounds like the longstanding stream erosion and water quality problem the restoration project was designed to “fix” was caused by storm water discharge from a DEP regulated point source:

During major storms, a large storm-water pipe coming out of the main stream would pour out water into a gully created by natural erosion and development of the surrounding area, Catania said. The debris in this overflow would then get carried to the reservoir.

Who designed and built this storm-water pipe? All storm water outfalls are regulated under the Clean Water Act and must be issued DEP permits. Who held the  DEP issued NJPDES permit for this outfall? Obviously, there were permit violations here.

DEP enforcement of that storm water permit violation should have occurred long ago, and that enforcement action should have funded the restoration work for the damage caused by the permit violation.

We didn’t need any additional new development to fix the storm water problem – traditional enforcement would have worked just fine. And we might have been spared the ERA development project (see below), had DEP denied permits to that project that could not avoid or mitigate damage on site.

Lack of DEP enforcement is a statewide pervasive problem.

But Mr. Catania – who was invited to participate in this case by DEP and would never bite the hand that feeds him – does not mention any of that and instead his spin (“This problem didn’t get created overnight”) and omission implies that there is no DEP responsibility for the original underlying field erosion and water quality problems.

In fact, just the opposite impression is created: DEP is made to look good because they required the stream restoration as a permit condition for another development. Which takes us to my other concerns with these kind of “mitigation” “restoration” projects.

II) “Mitigation” and “restoration” rarely works

First, the whole idea of “restoration” is flawed.

“Restoration” rarely if ever restores the site to original condition.

And destruction of natural resources and/or water quality at one location can never be offset for partial improvements in another location.

DEP’s controversial “waiver rule” is built on this flawed concept of “net environmental improvement” – a regulatory policy that lacks any scientific basis or valid methodology.

A while ago, before the current Christie amateur regime, DEP scientists issued a Report on systemic failures in wetlands mitigation program:

The evaluation of 90 select freshwater wetland mitigation sites around the State of New Jersey indicates that between 1988 and 1999 wetland mitigation practices have not been effective in meeting NJDEP’s NEPPS goals for increasing wetland quantity and quality in New Jersey. Less than one out of every two acres of proposed mitigation resulted in achieving a freshwater wetland. These findings are generally consistent with a study conducted by the National Research Council (NRC 2001).

Things have not improvement much since that Report was issued in 2003.

Natural ecological systems are far too complex for engineers and regulators to “fix”.

Even well planned, designed and constructed restoration projects frequently fail – and in fairly short order – due to lack of proper maintenance.

III) Mitigation facilitates inappropriate new developments

Mitigation is used as a mechanism to allow approval of destructive projects that should never have been approved in the first place, under the misguided thought illustrated in my arson analogy and DEP “mitigation” policy and “waiver rule”.

In this case, the source of the requirement for mitigation was a development project called “ERA South”. According to a prior Record story, that is a controversial and complex project recently involved in a  $8.5 million deal in Englewood.

But, we hear nothing about any of that controversy  in today’s “good news” story.

Instead, we are told this partial and favorable account, which puts a happy green face on the whole dirty deal:

Conservation Resources received the project’s funds from a developer, ERA South, which had completed a redevelopment project in Englewood.

ERA South needed to complete 600 feet of watershed mitigation to fulfill a permit requirement, Catania said.

ERA South tried to do this on-site, but when it turned out not to be feasible, the Department of Environmental Protection approached Conservation Resources to see if there were stream restorations projects in the same watershed. This led to Conservation Resources funding the Emerson Woods restoration project and a similar project in Englewood, Catania said.

Which takes me to my final concern about “mitigation” projects.

IV) Mitigation financing is ethically challenged

Take a look at the above schematic.

There are multiple relationships and multiple potential conflicts of interest.

The public is rarely told about the structure of these complex deals.

Groups like Conservation Resources play a quasi-regulatory role and a public relations role, with little accountability to the public.

The net effect from a PR standpoint is to provide cover for both the bad guy (developer, polluter, etc) and the lax DEP regulator.

Today’s Record story is a perfect example of that – it all sounds so good, until you scratch the surface and start looking into it.

And that’s why it’s a Green Ponzi scheme.

(and for those interested in another huge example of this kind of abuse, you’ll never hear these criticisms expressed by Mr. Catania, who does many NRD deals with DEP).

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