Water Quality Trading and Offsets in the Chesapeake Bay Watershed. Beth McGee Chesapeake Bay Foundation

Transcription

1 Water Quality Trading and Offsets in the Chesapeake Bay Watershed Beth McGee Chesapeake Bay Foundation

2 Founded: 1967 Staff: 170 Members: 220,000 Offices: Annapolis, Richmond, Harrisburg, Washington, Norfolk & Salisbury CBF works to Save the Bay through education, advocacy, restoration and litigation Chesapeake Bay Foundation

3 America s Largest Estuary The Chesapeake Bay watershed Covers 64,000 square miles and six states New York, Pennsylvania, Maryland, Delaware, Virginia, and West Virginia and the District of Columbia Provides nearly $700 billion in economic benefit to Maryland and Virginia alone Home to 17 Million People

4 Dead Zone

5

6 The Chesapeake Bay is not meeting water quality standards for oxygen and/or water clarity Tidal segments and main bay listed on CWA 303 (d) as impaired for nitrogen, phosphorus and sediment 1999 Consent Decree mandated completion of TMDLs for VA tidal waters by May 2011 Chesapeake 2000 agreement called for removing the Bay from the 303(d) list by Bay listed as impaired

7 History of Chesapeake Bay Restoration Efforts 1976 Congress directed EPA to study the Bay 1983 Report released highlighting pollution and overharvesting problems 1983 Chesapeake Bay Agreement established the Chesapeake Bay Program 1987 Agreement - 40% reduction in N and P by 2000 Chesapeake 2000 Agreement December Chesapeake Bay TMDL Bay Restoration

8 Chesapeake 2000 Agreement Drove Revisions to Water Quality Standards Adoption of DO and water clarity criteria by tidal states was the regulatory driver for NPDES permit limits for N and P watershed wide In response, several states developed water quality (nutrient) trading programs for new and existing sources (mostly WWTP) Adoption of Water Quality Standards

9 Bay States Trading Programs VIRGINIA: 2005 passed legislation that established the Nutrient Credit Exchange Program. Accompanying regulations were promulgated in Agricultural NPS Guidance issued Revisions to Legislation PENNSYLVANIA: Proposed Nutrient Trading Policy and Guidelines in 2005; finalized in Regulations in MARYLAND: Policy for Nutrient Cap Management and Trading (2006, final 2008). Agricultural NPS Guidance Legislation WEST VIRGINIA: Trading Guidance 2009 Water Quality Trading

10 Key Differences Among State Programs Key Element MD VA PA Publicly funded BMPs eligible? Ratios for NPS offsets/credits Trading to meet existing PS cap? No No Yes Retirement 5% Uncertainty 2:1 Reserve 10% No Yes. PS to PS. Yes. PS to NPS or PS. Current baseline for agricultural (NPS) sellers TMDL-level compliance (performance) TMDL-level compliance (operational) setback or vegetative buffer or 20% nut. reduction Credit Estimation Tool NutrientNet w/ NRCS NTT Guidance based on bay model NutrientNet State Trading Programs

11 What is the current status? Recent EPA audit of state trading programs may result in harmonizing some of the differences Number of policy white papers written on WQT in Chesapeake Bay - 10 Number of actual trades w/nps - 8 Skepticism is growing Game changer? Chesapeake Bay TMDL Water Quality Trading

12 Chesapeake Bay TMDL is Unique Largest TMDL in country World class science Déjà vu EPA authority under CWA Section 117 Expectation of state specific WIPs EPA has indicated their intent to hold states accountable for pollution reductions and to invoke consequences if they fail. EPA commitments are reaffirmed in legal settlement with CBF and in the EO Bay Restoration Strategy Bay TMDL

13 A Strong TMDL Will Drive Demand in the Water Quality Market Reducing pollution from urban stormwater is expensive. MS4 permittees could benefit from trading. State WIPs must specify how loads associated with new development will be accounted for and offset. Greater accountability and enforcement of loads and reductions will increase awareness of, and compliance with, TMDL requirements. Market Drivers

14 Lessons Learned Importance of consensus Success: widespread acceptance of delivery factors, edge of stream factors and pollution removal efficiencies of BMPs in the Chesapeake Bay watershed model. Failure: fundamental differences in credit estimation tools, baseline, and other key trading parameters Verification and protection of local water quality are key concerns that need to be explicitly addressed. Water Quality Trading

15 What are the obstacles to a robust trading program? Limited demand Lack of certainty for buyers and sellers Geographic scope (supply not matching demand) Reluctance of landowners to enter into enforceable agreements or participate in third party verification Lack of awareness Water Quality Trading

16 Chesapeake Clean Water and Ecosystem Restoration Act (HR 3852/S 1816) Adopts the Bay TMDL and requirements for watershed implementation plans Establishes consequences THANK YOU! for failing to develop adequate plans or implement them Creates a federal minimum standard for controlling stormwater runoff Authorizes over $ 2 billion to help meet the pollution reduction goals QUESTIONS? Creates a watershed-wide nutrient trading program The End