Water Quality Trading
Advancing voluntary and market-based solutions for improving water quality in a manner that maximizes economic efficiency and maintains environmental integrity.
Eutrophication, the over-enrichment of freshwater and coastal ecosystems with nutrients (nitrogen and phosphorus), is a rapidly growing environmental crisis. Sources of nutrients include agriculture, sewage treatment plants, and urban and suburban stormwater. Designing an effective response to nutrient pollution is a challenge. Some pollutant sources are regulated but others are not. Point source practices (such as upgrades to wastewater treatment plants and retrofits to stormwater systems) generally cost more than nonpoint source practices (like nutrient management or grass buffers along stream banks). This cost differential creates an ideal environment for nutrient trading. Trading allows sources with higher pollution control costs to purchase pollution reductions from sources with lower costs. Those with higher costs can save money, while those with lower costs can earn new revenue.
Beginning with our seminal publication, Fertile Ground, over a decade ago, WRI has helped advance water quality trading from theory to practice. Since our initial emphasis on “making the case” for water quality markets, our focus has now shifted to operationalizing trading. We work primarily in the Chesapeake Bay watershed, the Mississippi River basin, and China on policy analysis, tool development, and policy design and implementation. In addition, WRI assesses the state of water quality trading globally, and works to strengthen and enforce best practices for water quality trading markets.
WRI works to strengthen water quality trading programs in the Chesapeake Bay watershed through analyses, policy development, tool development, and state and federal outreach.
WRI works with federal, state, and local governments; Congress; NGOs; and other stakeholders to strengthen intrastate and facilitate interstate trading for nutrients in the Chesapeake Bay watershed. WRI works with local governments to develop methods to integrate nutrient trading into stormwater programs. The goals of WRI’s technical analyses, tool development, leadership, and program design recommendations are to facilitate the implementation of a robust and effective nutrient trading programs that ensure environmental health while helping to restore the Chesapeake Bay in a more cost-effective manner.
Specifically, WRI:
provides results of analyses and educational and outreach material to EPA, USDA, state agencies, local governments, NGOs, the public, and other key stakeholders.
assists the EPA, the Chesapeake Bay Program Office, Chesapeake Bay Commission, and state agencies to develop intrastate trading programs sufficiently robust to support interstate transactions in the future.
builds a multistate water quality trading tool for the Chesapeake Bay states that will facilitate inter and intrastate trades. The multistate platform will build on existing water quality trading platforms in Maryland, Pennsylvania and West Virginia. The platform will merge existing state tools into a single tool that will provide a shared registry and marketplace in addition to the tools necessary to calculate agricultural nonpoint source credits. WRI has partnered with USDA and Texas Institute for Applied Environmental Research to incorporate the Nutrient Tracking Tool (NTT) which estimates nutrient and sediment fluxes on farms based on actual management practices. A link to Maryland’s tool can be found here: nutrientnet.mdnutrienttrading.com.
engages the agricultural community through workshops and on-farm assessments conducted with WRI partners. These outreach sessions educate producers about water quality trading, demonstrate and familiarize producers with WRI’s NutrientNet tool, and to help create trust in trading programs and deeper understanding of agriculture’s contributions to nutrient pollution and Bay cleanup goals.
Chesapeake Bay Publications
- Comparison Tables of State Nutrient Trading Programs in the Chesapeake Bay Watershed by Evan Branosky, Cy Jones, and Mindy Selman
- How Baywide Nutrient Trading Could Benefit Pennsylvania Farms by John Talberth, Cy Jones, Michelle Perez, Mindy Selman, and Evan Branosky
- How Baywide Nutrient Trading Could Benefit Maryland Farms by John Talberth, Cy Jones, Michelle Perez, Mindy Selman, and Evan Branosky
- How Baywide Nutrient Trading Could Benefit Virginia Farms by John Talberth, Cy Jones, Michelle Perez, Mindy Selman, and Evan Branosky
- How Nutrient Trading Could Help Restore the Chesapeake Bay by Cy Jones, Evan Branosky, Mindy Selman, and Michelle Perez