Nutrient trading programs and proposed programs across the US.

All of the programs described below are different; they are individually designed to fit the particular conditions existing in their locations.  The majority of them involve point/nonpoint source trades because throughout the US, agricultural discharge is the major contributor of nutrients to waterbodies.  After point sources have installed permit-mandated control measures, it is often more cost-efficient for them to install BMPs at nonpoint sources than to install further controls in their own facilities. Others involve point/point source trades.  A variety of administration models are presented.

Chesapeake Bay

• Summary - Chesapeake Bay Watershed Nutrient Trading Program (Multi-State) (target date for completion is 2000 
• Summary - Maryland Nutrient Trading Policy (A State-wide trading rule to provide a cost-effective way for the State to improve water quality generally) 
• Draft Chesapeake Bay Program Nutrient Trading Guidance Document  PDF - Adobe Acrobat Reader needed.

• see the Chesapeake Bay Trading home page (exit this site)

Colorado

• Summary - Bear Creek Trading Program (rules in place for future trading when growth demands it)
• Summary - Boulder Creek Trading Program (since 1990 - implementing controls at NPS to avoid costly upgrades at POTWs)
• Summary - Chatfield Reservoir Study and Trading Program (rules in place for future trading when growth demands it)
• Summary - Cherry Creek Basin Trading Program ( point/point - 3 trades executed)
• Summary - Lake Dillon (Dillon Reservoir) Trading Program (The Nation's first point/nonpoint effluent trading program - designed to protect Denver's drinking water supply.  Two trades have occurred (connecting households to sewers) and nonpoint source control projects have banked credits.  The program may grow more active if population growth or other water quality stressors increase.

Florida

• Summary - Tampa Bay Cooperative Nitrogen Management (non-traditional management program - consortium negotiates to meet loading caps - not a formal trading program)

Idaho

• Summary - Lower Boise River Effluent Trading Demonstration Project (point/nonpoint - under development - complicated because water-rights issues (for irrigation districts) are involved)
• See the Lower Boise River Effluent Trading Demonstration Project home page (exit this site)

Iowa

• Summary - Cargill and Ajinomoto Plants Permit Flexibility (agreement between two food processing plants to control releases of CBOD - mainly a demonstration of flexibility in permitting)

Long Island Sound

• Connecticut Department of Environmental Protection. The Nitrogen Permitting And Trading Plan For Long Island Sound: In Response to Special Act No. 00-6. (need Adobe Acrobat reader) Arthur J. Rocque, Jr., Commissioner.  January 2000.
• Summary - Long Island Sound Trading Program  

Massachusetts

• Summary - Town of Acton Municipal Treatment Plant (offset program - the town needs a POTW, but no new discharges are allowed.  The proposed POTW will offset it's discharge by implementing BMPs to reduce nutrient loadings from nonpoint sources.)
• Summary - Wayland Business Center Treatment Plant Permit (The Wayland Business Center will obtain offsets by linking faulty septic systems on 24 neighboring properties to its WWTP.)

Michigan

• Summary - Kalamazoo River Water Quality Trading Demonstration Project (pilot program - farmers install BMPs to reduce phosphorus, generating credits which can be purchased by point sources)
• Summary - Michigan Water Quality Trading Rule Development (MIDEQ is developing a state-wide voluntary trading program - widest program in scope - purpose is to maintain or improve water quality - may allow open or closed trading programs - may allow cross-pollutant trading - large range of ratios)
• See Michigan's Water Quality Trading page (exit this site)
• Draft Regs, MI.  Watershed-Based Trading & The Law: Wisconsin's Experience. Letter Introducing Michigan Statewide Water Quality Trading Regulations Draft. May 21, 1998
• Michigan Rules for development of a Water Quality Trading Program.  Details of administration including formulas for arriving at baseline discharge and reduction amounts for point and nonpoint sources.
• Draft Trade Agreement.  Watershed-Based Trading & The Law: Wisconsin's Experience, Appendix 11: Draft Service Agreement Describing Trading Terms for a Potential Trade.  Kalamazoo River Water Quality Demonstration Trade Project.  SERVICE AGREEMENT between The Steering Committee and Non-point Source Partner. 6 pages

Minnesota

• Summary - Southern Minnesota Beet Sugar Cooperative Trading Program (S MN Beet Sugar, seeking to increase it's production by 40% offset it's additional discharge into an already severely impacted river by implementing BMPs at agricultural nonpoint sources.)
• Summary - Minnesota River Nutrient Trading Study (A WRI study examined several scenarios for achieving nutrient reductions in the Minnesota River.  They concluded that the optimal solution was a combination of  point source limits, trading, and performance-based ("targeted") subsidies for agricultural BMPs. No trading program has yet been developed.)
• Summary - Rahr Malting Permit (cross-pollutant trade: Rahr Malting, an indirect discharger to a POTW, wanted to build their own WWTF.  Considered a new source, they installed BMPs (including soil erosion controls, live-stock exclusion from waterways, rotational grazing, critical-area set asides, and wetland treatment systems for nutrient removal) at upstream farms to reduce P in exchange for permit to discharge CBOD) 

Nevada

• Summary - Truckee River Water Rights and Pollution Offset Program (WWTF needing to increase discharge entered into agreement with community and Federal government to insure maintenance of water quality during dry season in exchange for purchase of upstream water rights to preclude agricultural use and insure dry season flow.)

New York

• Summary - New York City Watershed Phosphorus Offset Pilot Programs  Pilot program to allow new or expanding wastewater treatment plants to obtain offsets from stormwater and street-cleaning controls so as to allow new P discharges in P- restricted basins.

North Carolina

• Summary - Neuse River Nutrient Sensitive Water Management Strategy (An association of dischargers  will be be formed to pool their discharge allocations and redistribute them in the most efficient manner)  Dischargers not meeting their allocations will have to pay for offsets.)
• Summary - Tar-Pamlico Nutrient Reduction Trading Program (The Tar-Pamlico Basin Association works cooperatively to meet nutrient caps set by the State. If the Association does not meet its goals it must purchase offsets by paying a pre-set price per pound to the State’s Agriculture Cost-share Program for Nonpoint Source Pollution Control. The point sources have met their collective cap each year since 1990) *  In the Tar-Pamlico, an association of point source dischargers is allowed to trade with one another under a cap. If the cap cannot be met, members of the association can pay into a fund to support a government-managed program that encourages the adoption of best management practices by farmers in the watershed. Tar-Pamlico is a hybrid of a trading program and an effluent tax, since the credits are purchased at a fixed price and there is no direct connection between the credits needed by the point sources and the credits generated by the nonpoint source program. In the first phase of the program, association members improved the efficiency of their facilities and successfully met defined standards. Allowable discharges are being gradually reduced during the second phase, which began in 1995. (Faeth, 16)
• Tar Pamlico Trading Program. - Adopted Rules for point source trades and draft rules for nonpoint source trades.   In the late 1980's, increases in algal blooms and fish kills in the upper Pamlico estuary were linked to excessive nutrient levels in the River. These conditions led the state Environmental Management Commission (EMC) to designate the entire Tar-Pamlico River basin as Nutrient Sensitive Waters (NSW) in 1989. This designation required the state to develop a nutrient management strategy for the basin. 10 pages.
• See the Tar Pamlico home page (exit this site)

Ohio

• Summary - Clermont County Project  Clermont County is studying and developing county-wide water quality management strategies that may include effluent trading due to increasing development pressure and forecasts that water quality in the East Fork of the Little Miami River and the Harsha Reservoir may be threatened. Nonpoint sources now account for roughly 70% of the loads into the river.  The watershed management plan may include effluent trading as a way of encouraging nonpoint source reductions.
• Honey Creek Watershed

Pennsylvania

• Summary - Delaware River Basin Trading Simulation  U.S. EPA and PA DEP sponsored a project that simulated four trading programs in PA to gain experience in developing trading programs and to help agencies interested in creating or participating in trading programs.

Rhode Island

• Providence and Seekonk Rivers Study:  Developing an Effluent Trading Program to Address Nutrient Pollution in the Providence and Seekonk Rivers.

Tenessee

• Boone Reservoir

Virginia

• Summary - Virginia Water Quality Improvement Act and Tributary Strategy  (The State is developing a guidance for trading and other market-based incentives to limit nutrient loading.  Grants provide cost-share funds to POTWs and some private WWTPs for nutrient control systems.  Sources that surpass their goals can create credits to bank or sell, or receive a bonus payment.  Sources falling short of expectations would have to repay the cost-share amount plus interest  No trading has been implemented yet.)

Washington, DC

• Summary - Blue Plains WWTP Credit Creation  (Interstate trade) (Blue Plains WWTP in DC employs biological nutrient reduction (BNR) on half of its flow.  Some POTWs in VA that are behind schedule on nutrient reduction to meet Chesapeake Bay goals will pay Blue Plains to treat all its flow until VA facilities can upgrade their systems. 

Wisconsin

• Summary - Fox-Wolf Basin Watershed Pilot Trading Program Watershed-wide trading project being developed in the Fox and Wolf Basins to reduce phosphorus loadings to Green Bay.. There are potentially hundreds of participants in a very large area. However, many municipal dischargers have already installed phosphorus controls to meet an international agreement to reduce loadings to the Great Lakes and may not need further reduction
• Summary - Red Cedar River Pilot Trading Program Approximately 80% of the phosphorus loadings to this watershed are from nonpoint sources, thus the POTWs are seeking to contract with landowners to implement BMPs.
• Summary - Rock River Basin Pilot Trading Program 
• Summary - Wisconsin Effluent Trading Rule Development

National Wildlife Federation

• National Wildlife Federation, June, 1999.  A New Tool for Water Quality: Making Watershed-Based Trading Work for You. (exit this site)
• National Wildlife Federation, April 1997. Latest EPA Plan to Reduce Water Pollution is Unenforceable: Watershed-Based Trading Lacks Important Safeguards.