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CBF Supports Proposed Nutrient Trading Program Changes By DEP

The Chesapeake Bay Foundation-PA  supports the discussed enhancements to the Commonwealth’s nutrient trading regulations, presented Wednesday by the Department of Environmental Protection to the Water Resources Advisory Committee.

(Click Here for a copy of DEP’s presentation to WRAC.)

Pennsylvania’s nutrient trading program was designed to provide sewage treatment plant dischargers with a cost-effective alternative to meeting pollution discharge limits while promoting pollution reductions from agriculture and other nonpoint pollution sources.

The improvements will help assure the program will be consistent with the Chesapeake Bay Blueprint and federal Clean Water Act requirements and guidance. 

“Pennsylvania needs a robust and successful trading program to not only address Pennsylvania’s Clean Water Blueprint, but also the over 8,700 miles of sediment impaired and 2,600 miles of phosphorus impaired streams in the Commonwealth,” said Harry Campbell, CBF’s Pennsylvania Executive Director. “The discussed changes assure a real, quantifiable, and defensible nutrient trading program that strengthens Pennsylvania’s efforts to address local stream pollution as well as Chesapeake Bay restoration.”

The changes, if adopted, will address a number of concerns that CBF, other stakeholders, and EPA have raised about Pennsylvania’s program. The discussed changes include:

-- enhanced calculation methodologies that will add greater precision and accuracy to projects proposing the creation of nutrient credits,

-- increasing participation in the program by including polluted runoff from urban areas, and

-- shifting DEP staff focus towards greater verification of credit generating projects to ensure they are properly implemented, being maintained, and are functional.

One area of reservation is the possible elimination of manure hauling as a credit generating practice, even where the manure is used as a soil amendment in the reforesting abandoned mine land. 

There are roughly 180,000 acres of abandoned mine lands in Pennsylvania.  Soils in these areas do not have the organic matter or nutrients to support growth of vegetation.  Given that reforestation is a major component of the Blueprint and Milestones, careful consideration of eliminating this incentive is warranted.

In total, CBF believes the discussed improvements will result in a strong, more scientifically justifiable, and therefore defensible, program.

Nutrient trading improves water quality by using market-based mechanisms to produce overall pollution reductions at lower costs. It is a voluntary program that enables sources that exceed pollution reduction requirements to generate pollution reduction credits that may be traded to others.

“A nutrient trading program that relies on creating credits that meet scientific and verification requirements defined in regulation, will result in real pollution reduction,” said Campbell.

The approved credits can be sold to off-set the cost of upgrading local sewage treatment plants, and to meet state Clean Streams and federal Clean Water Act discharge permit limits.  They can also generate valuable income for family farmers and be used as economic incentive for third party aggregators who work with several farms to generate credits offered for sale as a package.

Importantly, the nutrient trading program offers an economic incentive for farmers to meet and exceed long-standing state regulations on soil erosion as well as nutrient and manure management.  

They can also increase local efforts to implement projects that yield multiple benefits—like reduced flooding, drinking water protection and improvement, wildlife habitat, and even community revitalization.

Pennsylvania’s trading program allows those who can create verifiable credits to offer those credits for sale at market-based pricing.  Bidding on these practices occurs regularly at PennVEST auctions.

DEP maintains a NutrientNet platform where buyers and sellers can exchange information.  In both cases, the marketplace determines which pollution reduction practices are the most cost-effective, not a government agency or the legislature.

The discussed enhancements would not change the program, which will remain market-based. A March 2013 auction of nitrogen credits yielded $2.98 to $3.05 per credit.

“Many of these sorts of projects, particularly those on small farms and in urban communities, not only help meet local impairment issues, but they are also “conservation that counts,” because they can be counted towards Pennsylvania’s incremental 2-year Milestones for the Chesapeake Bay Clean Water Blueprint requirements for agriculture and polluted urban runoff if not sold to a regulated discharger,” said Campbell.

“Although the effort to update the program is ongoing, CBF commends DEP for their work to address a number of areas of concern raised by stakeholders and the U.S. Environmental Protection Agency,” Campbell continued. “We believe these enhancements, if adopted, will result in a more vibrant and defensible nutrient trading program for Pennsylvania.”

Click Here for a copy of DEP’s presentation to the Water Resources Advisory Committee outlining proposed changes in the Nutrient Credit Trading Program.


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