The Issues Facing Virginia
Richmond skyline. Copyright 2010 Jillian Chilson
Nutrient Trading 101
Nutrient trading is a way for farmers, foresters, businesses and other facilities to reduce pollution more than is legally required and to sell such additional reductions as credits to other businesses, facilities, and local municipalities so they can meet their reduction requirements.
Trading offers a tool to reduce costs associated with reducing pollution, to expedite water quality improvements, and stimulate innovation. Trading can help localities and businesses to reduce pollution and meet their requirements more cost-effectively and often more quickly.
Why would we want to allow an entity to buy credits rather than take their own action to reduce pollution?
That's a sentiment we sometimes hear in relation to trading programs. Here's a simplified example in which trading makes economic sense and benefits water quality:
Let's say a river basin has two wastewater treatment plants, A and B.
Treatment plant A is upstream from B.
Pollution limits have been set for each plant to ensure the water downstream from both of them meets water quality standards.
The population served by B has doubled since those limits were put in place. That means the plant will have to treat a much larger pollution load, with the result that it will exceed its pollution limits by 1,000 pounds of nitrogen unless it upgrades its facility. Treatment plant B can and will upgrade its facilities, but that will take time and additional financial resources, which it does not yet have.
Meanwhile, A, the plant upstream, has already upgraded its plant so that it is reducing pollution by 1,500 pounds more than is legally required.
Enter nutrient trading
From that additional 1,500-pound reduction, treatment plant A can now sell 1,000 pounds of nitrogen credits to treatment plant B.
Treatment plant B can buy credits (at a lower cost than immediately upgrading its facility) and use those credits to offset the additional 1,000 pounds of nitrogen it is discharging, enabling it to meet its legal requirements.
In this way, trading allows treatment plant B to meet its legal limits—through purchased credits—and lets treatment plant A defray its costs. The result is a reduced amount of pollution entering the river and a healthier river basin overall.
This sort of trading example can also extend to trades between different kinds of entities, such as a wastewater treatment plant and a municipal stormwater system (the pipes, culverts, drainage ditches, etc. that carry rainwater off the land into a body of water) or between point source and nonpoint pollution sources, such as a municipal stormwater system and a farm that has implemented more pollution reduction practices than required.
What's CBF's Take?
CBF supports nutrient trading with certain caveats.
Blueprint First: Trading programs must ensure that the actual nutrient reductions being made exceed the requirements of the Blueprint for the Chesapeake Bay.
Accountability: Trading programs must be stringent enough to ensure that trading sources are properly constructed, operated and maintained. .
Accessibility: Trading programs must ensure that the public is fully informed when credits are created and when a facility is using credits. Those who are potentially affected must have full access to the information.
Verified Technology: Trading programs must ensure that the credit-generation practices have been assigned a science-based "pollution reduction efficiency" approved by the scientists at the Chesapeake Bay Program and the Department of Environmental Quality. (Innovative technology is encouraged, but new practices must be scientifically vetted to earn credits.)
Local Water Quality Protection: Trading programs must prohibit trades that will allow the degradation of local water quality.
Timeliness: Trading programs must ensure that the use of credits makes sense for the time frame it takes to generate them.
What role do farms and agricultural production play in the health of our waters? Learn more
Toxic chemicals are entering our waters every day. What can we do about them? Learn more
When the watershed's land summers from pollution and poor management so, too, does the water. Learn how
Sewage & Septic Systems
Upgrading wastewater treatment is key to cleaning up the Bay. Learn more
Did you know that stormwater runoff is the fastest growing source of Bay pollution? Learn more
Find out what other issues are affecting the health of the Bay. >>
Map showing location of proposed ODEC power plant. Lucidity Information Design
Plans for ODEC's Proposed Cypress Creek Coal Plant Suspended
On August 8, 2012 it was announced that plans to build a coal-fired power plant in Surry County had been suspended. According to statements, Old Dominion Electric Cooperative (ODEC) asked the Army Corps of Engineers to cease the permitting process needed for the plant to proceed. CBF hopes ODEC officials stand true to these statements. If they do, it will be a great win for the Chesapeake Bay, its rivers and streams and the citizens of Hampton Roads who have so vigorously opposed the facility.
As proposed, the plant would have been the largest coal-fired power plant in Virginia and, by ODEC's own accounts, emit millions of pounds of nitrogen oxides (smog-causing chemicals) and carbon dioxide (a major greenhouse gas), as well as soot, mercury, lead, benzene, and other toxic air pollutants.
Read the CBF report, "A Coal Plant's Drain on Health and Wealth," which explains the impact ODEC's plant would have had if the plant had been built.
Numerous human health organizations, environmental groups, nearby localities, and hundreds of local citizens have publicly opposed the plant due to its likely harmful environmental, economic, and human health impacts on the Hampton Roads region. CBF broadly applauds their unyielding opposition.
ODEC's continued ownership of the property where the plant was proposed and changes in local zoning authority from Sussex County, Surry County, and the Town of Dendron, leave unresolved questions about what will happen next. CBF hopes that a usage of the property can be found that can benefit both the economy and environment of the region.
For now, we are grateful for this apparent victory! CBF will continue to closely monitor any future permitting actions associated with the property.
See the sidebar for more information and read our report, "A Coal Plant's Drain on Health and Wealth."