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NUTRIENT CREDIT TRADING IN THE BAY WATERSHED

NUTRIENT CREDIT TRADING IN THE BAY WATERSHED. NCT is here and gaining steam, though unclear how much trading will actually occur. The State WIPs relying heavily on trading. Major concern is over trades involving nonpoint sources.

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NUTRIENT CREDIT TRADING IN THE BAY WATERSHED

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  1. NUTRIENT CREDIT TRADING IN THE BAY WATERSHED • NCT is here and gaining steam, though unclear how much trading will actually occur. • The State WIPs relying heavily on trading. • Major concern is over trades involving nonpoint sources. • EPA’s involvement has been both notable and lacking regarding nutrient credit trading in the Bay watershed.

  2. STATE TRADING PROGRAM DIFFERENCES • Virginia and Maryland generally recognized as strong programs. • MD requires major WWTPs to upgrade to ENR (Enhanced Nutrient Removal) levels before they can purchase credits • PA’s program viewed as most aggressive and having most lenient baseline for determining NPS credits. • MD and PA use “performance approach” to determining baselines; VA sets 5 BMP priority practices as baseline • Trading ratios are handled differently across the region

  3. CREDIT DEMAND • To date, only small number of nutrient trades involving nonpoint sources. • Some interstate trading is occurring (even without Cardin bill). • Pressure to redesign state trading programs to broaden trading options and frequency. • Robust debate on whether trading is an effective and efficient means for achieving NPS water quality improvement. • Accountability and verifiability will be a key determinant of whether the Bay Program is successful with trading or not.

  4. Suggestions for CAC STATE PROGRAM REVIEWS • Applaud EPA for conducting reviews of state NCT programs; Encourage them to assist the states in making needed changes to the programs by 2012. • Ask EPA to commit in partnership with the Bay states, etc. to another round of program reviews in conjunction with the 2017 reevaluation. CREDIT BASELINE • Because the credit baseline is so important to successful trading, CAC may reiterate our interest in seeing that EPA takes a close look at this area during its program reviews.

  5. TRADING RATIOS - What agricultural BMP coefficients are being used by the states in determining nutrient credits? - Are they consistent applied across the watershed? - Is a 1 to 1 ratio sufficient for WQ protection in light of the TMDL requirements? - Should more credit be given to longer term structural farm BMPs than to annual practices? - Should retiring credits be part of every trade made under the Bay TMDL? INTERSTATE TRADING - May want to request assurances that there will be more common set of rules; no increase in local water quality degradation; EPA take lead role.

  6. WATER QUALITY FOCUS - CAC may wish to reiterate to Bay leaders that the overriding goal of any nutrient credit trading program must remain water quality protection. DEMAND - CAC may wish to join with the Bay Commission in suggesting that EPA take the lead in conducting a nutrient trading market analysis as part of its review of state trading programs. This information could be valuable for planning and for adaptive management under the state WIPs.

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