Nutrient Trading Proposed in Pennsylvania

Major Watershed Improvement Act Introduced In Pennsylvania Senate

The legislation will enable all verified credit generators (public and private; regulated and unregulated) to develop projects and sell verified nutrient credits on a long term basis under a competitively-bid procurement program. This statewide program will enable Pennsylvania to use these verified nutrient reductions to initially meet their federal Chesapeake Bay mandate. The recent Pennsylvania Legislative Budget & Finance Committee study, A Cost Effective Alternative Approach to Meeting Pennsylvania’s Chesapeake Bay Nutrient Reduction Targets“, projected such a program would reduce Pennsylvania’s nutrient compliance costs by up to 80% and provide environmental and economic benefits to the local watersheds where the improvements occur.

Nutrient trading is a somewhat controversial program by which a certain number of "credits" essentially permission to release a certain amount of nutrients, to all the various industries that have released them in the past, but at a lower amount.  Then the "polluters" are allowed to bargain among themselves to buy the amounts needed.  Industries with high cleanup costs find it useful to buy credits from industries with low cleanup costs who then do the "clean up" at their lower costs, paid for by the high cost polluters.  Win-win.

It is very similar to carbon "cap and trade" proposal, and is an outgrowth of market based approaches to pollution control from the 70's, and first tried under the first President Bush for acid -rain control:

In the United States, the "acid rain"-related emission trading system was principally conceived by C. Boyden Gray, a G.H.W. Bush administration attorney. Gray worked with the Environmental Defense Fund (EDF), who worked with the EPA to write the bill that became law as part of the Clean Air Act of 1990. The new emissions cap on NOx and SO2 gases took effect in 1995, and according to Smithsonian magazine, those acid rain emissions dropped 3 million tons that year.

 It avoids the command and control aspect of pollution regulation, and avoids the problem of punitive enforcement.  Traditionally, it is considered a "conservative" form of regulation, and liberals tend to be suspicious of it, because it does not have mechanisms for forced reductions.

The fact that Pennsylvania is considering such an approach speaks well of their seriousness regarding the nutrient problem, which largely manifests itself in the Bay, beyond their borders.