In this paper we describe a system dynamics model developed to examine the feasibility of an environmental restoration banking system. Under this proposed system credits are issued by a governing authority to a restoration bank in return for undertaking environmental restorations. Users of the environmental resource are then required to purchase these restoration credits. A case study was developed for restoration of coastal mangrove forests in Thailand.  Model simulations show that the restoration banking system may be effective in restoring coastal mangroves and in rehabilitating the coastal shrimp farming industry which is dependent on environmental services provided by the mangrove stock.