Nature of Activity: The State of Maryland is developing a State-wide trading rule. It is anticipated that trading will provide a cost-effective way for the State to improve water quality generally, as well as meet its commitments under the Chesapeake Bay Agreement.

Environmental Problem: Eutrophication in the State’s waters.

Pollutant(s) / Pollution Type(s): Nitrogen and Phosphorus.

Trade Types: Point/point, point/nonpoint.

Stage of Implementation: The Chesapeake Bay Agreement was signed in 1987 and the Tributary Strategy Agreement was signed in 1992. The State of Maryland drafted a concept paper on trading in August, 1997. A new effort on the policy and the paper was started in late 1998 and is expected to be completed by early 2000.

Relation to TMDL: There are many waterbodies within the Chesapeake Bay watershed that have been placed on the States’ lists of waters not meeting water quality standards and for which TMDLs must be developed.

Number of Potential Participants: Many, unknown

Trading Ratios: The 1997 draft paper proposed a 2:1 ratio for point/non-point trades.

Estimated Cost Savings: Unknown

Available Written Information: The draft concept paper is available, as well as a paper from the proceedings of the Watersheds '98 conference. A full report is forthcoming from Water Environment Research Foundation.

Innovative Aspects: The draft proposes to allow buyers and sellers of offsets to interact directly with each other or to buy and sell offsets via a central fund. Entities seeking to buy offsets would be able to negotiate with and purchase them directly from the generators of the offsets, or the buyers would be able to buy the credits from a central fund administered by the State. The central fund would buy offsets from offset generators, bank the offsets, and make them available for sale.

Obstacles: One of the expected difficulties is coordination with the Chesapeake Bay Program on trading and with other States that are party to the Bay Agreement.

Web Sites: Maryland: http://www.epa.gov/surf2/states/MD/

Contact: Virginia Kearney, Maryland Department of the Environment. (410) 631-3574, vkearney@mde.state.md.us