Refining the Use of Habitat Equivalency Analysis

When natural resources are injured or destroyed in violation of certain U.S. federal or state statutes, government agencies have the responsibility to ensure the public is compensated through ecological restoration for the loss of the natural resources and services they provide. Habitat equivalency analysis is a service-to-service approach to scaling restoration commonly used in natural resource damage assessments. Calculation of the present value of resource services lost due to injury and gained from compensatory restoration projects is complicated by assumptions concerning the within-time period crediting of losses and gains. Conventional beginning-of-period accounting leads to an underestimate of the loss due to injury and an overestimate of the gains from compensatory projects in cases with linear recovery projections. The resulting compensatory requirement is often insufficient to offset the true loss suffered by the public. Two algebraic equations are offered to correct for these estimation inaccuracies, and a numerical example is used to illustrate the magnitude of error for a typical, though hypothetical, injury scenario.