Sept. 30, 2014 SIGN IN | REGISTER

Will Water-Trading Credits Help Reduce Pollution?

David McNew/Getty Images
Agriculture is a major polluter of waterways, dumping phosphorus, nitrogen and sediment into bodies of water all across the country. One market-based solution to limit such pollution is the water-trading programs available to farmers through the EPA and the USDA.

The concept sounds familiar: Polluters looking to meet certain emissions targets buy credits from other entities that have some leftover credits to spare. It’s a cap-and-trade program.

Only this one is for water pollution and the biggest players in this newly emerging environmental market are farmers. But some environmental advocacy groups dislike the idea and are looking to Congress for assistance after striking out in the courts.

While water quality trading — or water pollution trading, in the view of critics — isn’t new, it’s been gaining momentum over the past few years. Regulators and polluters are trying to minimize water pollution as they face possible tightening of discharge limits under the Clean Water Act.

In December, the Environmental Protection Agency and the Department of Agriculture, two agencies known to butt heads on pollution issues, announced an expanded partnership to support water-trading programs and market-based approaches to limit pollutants in waterways.

“New water quality trading markets hold incredible potential to benefit rural America by providing new income opportunities and enhancing conservation of water and wildlife habitat,” Agriculture Secretary Tom Vilsack said at the time. “Additionally, these efforts will strengthen businesses across the nation by providing a new pathway to comply with regulatory requirements.”

Agriculture is a major polluter, dumping phosphorus, nitrogen and sediment into waterways and contributing to low-oxygen “dead zones” in water bodies from the Gulf of Mexico to the Chesapeake Bay. But farms also have something that power generators and municipalities, which need to reduce their runoff to meet mandates of the Clean Water Act, don’t: the ability to generate water-trading credits cheaply.

While an aging power plant might have to undergo a costly upgrade of its facilities to meet runoff targets and a city might have to control unwieldy storm water in an urban environment, a farmer can transform some land into a buffer zone or plant a few acres of nitrogen-fixing cover crops.

Then the farmer can sell those credits to another entity in the same watershed, enabling that power plant or factory to meet its obligations under the law. “The cheapest pollution reductions are from agriculture,” said Beth McGee, a water scientist with the Chesapeake Bay Foundation. “Economists will say that agriculture will be the biggest seller in the market.”

For many farmers, that could mean money in the bank. In a statement circulated by critics, Delmarva Poultry, a group representing poultry producers in the Chesapeake Bay watershed, described water trading as a way to “help farmers earn money while providing polluters with the opportunity to increase their pollution.”

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