Colorado, the headwaters for much of the United States, is one of the fastest growing states in terms of both population and land development. These land use changes are impacting jurisdictional streams, and thus require compensatory stream mitigation via environmental restoration. In this article, we first characterize current demand and supply for stream mitigation for the entire state of Colorado. Second, we assess future demand by forecasting and mapping the lengths of streams that will likely be impacted by specific development and land use changes. Third, based on our interviews with experts, stakeholders, resource managers, and regulators, we provide insight on how regulatory climate, challenges, and water resource developments may influence demand for stream mitigation. From geospatial analyses of permit data, we found that there is currently demand for compensatory stream mitigation in 13 of the 89 HUC-8 watersheds across Colorado. Permanent riverine impacts from 2012–2017 requiring compensatory mitigation totaled 38,292 linear feet (LF). The supply of stream mitigation credits falls well short of this demand. There has only been one approved stream mitigation bank in Colorado, supplying only 2539 LF credits. Based on our analyses of future growth and development in Colorado, there will be relatively high demand for stream mitigation credits in the next 5–10 years. While most of these impacts will be around the Denver metropolitan area, we identified some new areas of the state that will experience high demand for stream mitigation. Given regulatory agencies’ stated preference for mitigation banks, the high demand for stream mitigation credits, and the short supply of stream credits, there should be an active market for stream mitigation banks in Colorado. However, there are some key obstacles preventing this market from moving forward, with permanent water rights’ acquisitions at the top of the list. Ensuring stream mitigation compliance is essential for restoring and maintaining the chemical, physical, and biological integrity of stream systems in Colorado and beyond.
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