Addressing Risk and Uncertainty in Water Quality Trading Markets

Across the United States, water quality trading is being explored as a mechanism for reducing the costs of cleaning up impaired waterbodies. Trading between point sources, such as wastewater treatment plants, and nonpoint sources, such as agriculture, can cut costs for regulated entities needing to reduce pollutants, and generate revenue for agricultural producers who generate credits. However, water quality trading, particularly between point and nonpoint sources, can face inherent uncertainties around quantification of nonpoint source reductions, participant behavior, regulations, and market supply and demand. Effectively addressing uncertainties is crucial to ensuring the success of these markets and improving water quality. This paper establishes a framework from which to engage federal and state agencies, program developers, and stakeholders in a dialogue about these uncertainties and appropriate mechanisms for addressing them

Comparison Tables of State Nutrient Trading Programs in the Chesapeake Bay Watershed

Examines opportunities for wastewater treatment plants to trade credits or offsets with other plants or farms releasing lower volumes of nutrients across states. Compares design elements of programs in Maryland, Pennsylvania, Virginia, and West Virginia

How Nutrient Trading Could Help Restore the Chesapeake Bay

The largest estuary in the United States, the Chesapeake Bay is a vital economic, cultural, and ecological resource for the region and the nation. Excess runoff and discharges of nutrients -- particularly nitrogen and phosphorus -- from farms, pavement, wastewater treatment plants (WWTPs), and other sources have placed the bay on the Environmental Protection Agency's (EPA's) List of Impaired Waters. This nutrient pollution is responsible for creating large algal blooms that lead to "dead zones" in the bay (Chesapeake Bay Program, 2009b). Despite decades of restoration efforts, progress has been slow, and the rivers and streams that drain into the Bay remain polluted (Chesapeake Bay Program, 2009b)

Nutrient Trading in the Chesapeake Bay Region: An Analysis of Supply and Demand

This report provides an overview of nutrient trading programs as they currently exist in the Chesapeake Bay watershed and examines the potential for supply and demand of credits within those markets. In addition, the analysis considers the potential impacts of Bay-wide Total Maximum Daily Loads on nutrient trading - particularly those on the agricultural sector's ability to generate credits

How Baywide Nutrient Trading Could Benefit Maryland Farms

Outlines pending legislation to improve the health of the Chesapeake Bay watershed, including a nutrient trading program that allows farms that reduce runoff of nutrients to below target to sell "credits." Estimates costs, credits, and credit revenue

How Baywide Nutrient Trading Could Benefit Pennsylvania Farms

Outlines how legislation to make the Chesapeake Bay watershed healthier, including a program allowing farms that reduce runoff of nutrients to below target to sell "credits," would benefit Pennsylvania farms through cost-sharing funds and new revenues

Water Quality Trading Programs: An International Overview

Explains water quality trading, in which nutrient discharges in waterways are capped and high polluters can purchase pollution discharge credits from others. Compares programs and discusses program design, costs, elements of success, and lessons learned

Water quality trading programs: A comparison between the Northern and Southern Hemispheres

Water quality trading is continually being explored and implemented to improve water quality in many parts of the world. They are being used to cost-effectively reduce point and/or non-point source obligations to meet water quality goals such as nutrient discharge limits. A comparison between evolving trading programs in New Zealand and some in North America illustrate a number of differences as well as similarities in terms of the successes and hurdles. These can be used to better design more effective programs

Water quality trading programs: A comparison between the Northern and Southern Hemispheres

Water quality trading is continually being explored and implemented to improve water quality in many parts of the world. They are being used to cost-effectively reduce point and/or non-point source obligations to meet water quality goals such as nutrient discharge limits. A comparison between evolving trading programs in New Zealand and some in North America illustrate a number of differences as well as similarities in terms of the successes and hurdles. These can be used to better design more effective programs.water quality, trading, nutrients, market-based, non-point source, point source, Environmental Economics and Policy,