MDA to hold ‘pilot programs’ to promote nutrient trading

Associate Editor

ANNAPOLIS, Md. (May 17, 2016) — The Maryland Department of Agriculture hopes to hold a series of “pilot programs” this summer to promote state nutrient trading to a skeptical public, state officials said last week.
The state plans to facilitate a series of trades between partners to show potential buyers and sellers a nutrient trading market can work, said Susan Payne, program coordinator of ecosystem markets at the department.
“People are reluctant to try something out that’s new,” she said. “The best kind of outcome would be that [the trades] actually work.”
The pilot trades would allow the state to examine how its trading policies work in practice, and they would allow buyers and sellers to see prices for the first time.
The state would be able to determine whether both parties were satisfied with the trade, and they’d be able to test their verification process that confirms credits earned by farmers — and sold through the trading program — come from actual best management practices on the farm.
The trading program is designed to offset new or increased discharges of nutrients, such as nitrogen and phosphorous, into local waters and the Chesapeake Bay.
It also provides economic incentives to all nutrient sources to reduce nutrient and sediment runoff.
Trades can take place between so-called “point sources” such as wastewater treatment plants, point and nonpoint sources such as a treatment plant and a farming operation or simply nonpoint sources such as agriculture and urban stormwater sites or systems.
In many cases, nutrient trading will allow wastewater treatment plants and the like to push back state-mandated facility technology upgrades that are incredibly costly — potentially billions of dollars.
Farms can generate credits to sell by instituting best management practices that reduce nutrients and runoff — but only after they’ve met baseline nutrient and runoff requirements.
The program is designed to benefit farmers who are willing to go above and beyond the minimum regulatory requirements.
Some environmental groups have criticized the concept of so-called pollution trading, questioning its efficacy and the unintended, potential consequences of turning nutrient and pollution runoff into a market, including whether it would favor wealthy areas with an ability to buy credits over poorer areas.
“There’s a lot of skepticism about it,” Payne said. “But we have to accommodate growth, and we have to do it by cutting back somewhere else. … Trading is just one option though. It’s no magic bullet.”