Water-quality credits/dollars to be earned by farmers
In a first-of-its-kind trading plan involving three states of the Ohio River Basin, an interstate water quality pilot trading program has been initiated.
Under the trading plan, farmers in Ohio, Indiana and Kentucky reducing their nutrient run-off using conservation best practices can be credited for nutrient run-off reduction. And emitters of similar nutrients such as power plants and sewage treatment plants can purchase the nutrient reduction credits and not have to invest in hugely expensive changes to their operations in order to meet lower pollution standards/environmental permit requirements.
This water quality exchange program is similar to the carbon exchange programs that have existed for farmers to receive credit for no-till farming to trap carbon so that industries can have a larger carbon footprint in their operations.
The water-quality program, as with the carbon trading, will be handled in a market-based approach. The three states initially participating are the core states of the Ohio River Basin drainage area. Water quality exchanges have not been extremely common and those that have been enacted have been a state or less per program.
“Although some states have adopted trading policies or rules to govern trading within their jurisdictions, this is the first time that several states have come together to develop or implement an interstate trading program where all states operate under the same rules and a water quality credit generated in one state can be applied in another,” explained an announcement issued by the American Farmland Trust.
The three-state trading is being termed a pilot program with trades beginning this year and proceeding through 2015 under the pilot program descriptor. Apparently, the program is also being termed a pilot as research into how to handle all aspects of the trading, appropriate actions for credits and other details are worked out while the program proceeds. The organizers promise in their announcement that water quality trading will be simpler than what farmers have found to be the case with other incentive payment programs “because of the valuable input from agriculture in the trading plan.”
There is a wide coalition of companies, associations and government agencies involved to assure all the legal aspects and protocol for expanding this program to the whole Ohio River Basin can be worked out.
“The Electric Power Research Institute (EPRI) is leading the research effort with support from American Farmland Trust (AFT); Hunton & Williams LLP; Kieser & Associates, LLD; and the University of California at Santa Barbara. The pilot project is also receiving regional support from the Ohio Farm Bureau Federation and the Ohio River Valley Water Sanitation Commission; federal support from the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Agriculture Natural Resources Conservation Service (USDA NRCS); and industry support from American Electric Power, Duke Energy and Hoosier Energy,” the announcement noted.