WRI Stories Feed: Water Quality Trading

Can Nutrient Trading Shrink the Gulf of Mexico's Dead Zone?

Michelle Perez — Wed, 17 Apr 2013 10:30:46 -0400

The Gulf of Mexico has the largest dead zone in the United States and the second-largest in the world. Dead zones form when excessive amounts of nitrogen and…

Tools to Improve Water Quality

Cy Jones — Wed, 29 Aug 2012 09:54:19 -0400

This post is part of a series on World Water Week, an annual event designed to draw attention to and discuss global water issues….

Eco-Compensation in China: Opportunities for Payments for Watershed Services

Erin Gray — Tue, 15 May 2012 17:50:32 -0400

Water supply and availability could be the most pressing problem restricting China’s economic growth in the next 10-15 years, according to a new report by the…

New Fact Sheet Helps Chesapeake Bay States Design Nutrient Trading Programs

Evan Branosky — Fri, 15 Jul 2011 03:52:56 -0400

2011 will be an important year for the Chesapeake Bay, not only because scientists are predicting an unusually bad “dead zone” this summer….

2011 Ecosystem Markets Conference: Innovating Ways to Reward Conservation

Robert Winterbottom — Thu, 30 Jun 2011 13:29:58 -0400

Wisconsin is a state blessed with abundant natural beauty and was home to one of America’s first conservationists, Aldo Leopold. Leopold recognized that beyond commodities,…

New Web-Based Map Tracks Marine "Dead Zones" Worldwide

Michael Oko — Thu, 20 Jan 2011 09:58:20 -0500

Research Identifies 530 Coastal “Dead Zones” and 228 Marine Eutrophic Sites

New research by the World Resources Institute (WRI) and the Virginia Institute of Marine Science (VIMS) identifies more than 530 low-oxygen “dead zones” and an additional 228 sites worldwide exhibiting signs of marine “eutrophication.” Eutrophication occurs when water bodies are over-fertilized by nutrients that are washed into surface waters from farms and urban areas.

Analysts at WRI and VIMS have compiled the information into a web-based “one-stop shop” that provides a global database and interactive map of affected areas, as well as links to articles, photos, and other resources. The website—“Eutrophication and Hypoxia: Nutrient Pollution in Coastal Waters”— is at www.wri.org/eutrophication.

“Until now, a lack of information and monitoring has been a major impediment to understanding the extent and impacts of ‘dead zones’ and eutrophication in coastal ecosystems,” said Mindy Selman, senior water quality analyst at WRI. “This website is an important step forward because it compiles the current information into a central location to raise awareness and offer solutions for controlling nutrient pollution.”

An important feature of the site is a comments section to solicit feedback from visitors, who will be encouraged to provide updates to the maps and databases drawing on their knowledge of local conditions.

The 530 areas and 228 sites together encompass more than 95,000 square miles, about the size of New Zealand. The largest dead zone in the United States, at the mouth of the Mississippi, covers more than 8,500 square miles, roughly the size of New Jersey. A large dead zone also underlies much of the main-stem of Chesapeake Bay, occupying about 40 percent of the Bay’s area and up to five percent of its volume each summer.

Professor Bob Diaz, who led the compilation of data at VIMS, said: “Over the last 50 years, problems related to over-fertilization of the sea and low dissolved oxygen have expanded to the point where large areas devoid of fish, shrimp, and crabs are common occurrences. These dead zones, or oxygen deserts, are very damaging to the environment and also to people that rely on the sea for their livelihood.”

Eutrophication and hypoxia— a scientific term for low-oxygen dead zones– often go hand-in-hand, as excessive nutrients fuel blooms of algae that, when they die and sink, provide a rich food source for bacteria. The bacteria, in turn, consume dissolved oxygen from surrounding waters, creating dead zones where fish cannot survive. Other impacts of eutrophication include damage to coral reefs, harmful algal blooms, and loss of biodiversity.

The partnership between WRI and VIMS stems from a 2007 WRI study of the main obstacles to effectively addressing eutrophication. The study concluded that a key obstacle is a lack of public awareness and understanding of the phenomenon and its impacts, causes, and extent. Eutrophication and dead zones are now a key stressor of marine ecosystems and rank with over-fishing, habitat loss, and harmful algal blooms as global environmental problems for marine life.

Diaz, who began monitoring the worldwide extent of eutrophication and dead zones in the mid-1990s, has published an ongoing list of hypoxic areas worldwide. He and WRI worked together on the new website to expand the list of dead zones as well as include coastal areas where symptoms of eutrophication (e.g., algal blooms) have been observed, but which lack the monitoring data to classify the system as hypoxic.

# # # #

The World Resources Institute (WRI) is an environmental think tank whose mission is to find practical ways to protect the earth andimprove people’s lives.

Chartered in 1940, the Virginia Institute of Marine Science is now among the largest marine research and education centers in the United States. VIMS has a three-part mission to conduct interdisciplinary research in coastal ocean and estuarine science, educate students and citizens, and provide advisory service to policy makers, industry, and the public. The School of Marine Science (SMS) at VIMS is the graduate school in marine science for the College of William & Mary.

NEWS RELEASE: Chesapeake Bay Farmers Could Benefit from Nutrient Trading

Jessica Forres — Thu, 05 Aug 2010 14:56:32 -0400

Farmers in Pennsylvania, Maryland and Virginia could earn thousands a year in additional revenue if Congress passes legislation to create an interstate nutrient trading program – a cost-effective solution to restoring the health of the Chesapeake Bay.

An analysis by the World Resources Institute (WRI) of nine farm scenarios across the three states, finds that farmers who participate in a bay-wide trading program could potentially increase their profits by an average of $11,000 per year with a credit price of $20 per pound of nitrogen or make a 55 percent return on their investment in nutrient reduction practices. The reports use a WRI-created Farm Profit Calculator tool that takes into account capital, maintenance, land rental, and transaction costs farmers face when investing and maintaining such practices.

“By investing in cover crops, riparian buffers, and other nutrient-reduction practices, farmers in the Bay area could earn substantial profits from participating in nutrient trading,” said John Talberth, a senior economist at WRI and lead author of the reports.

Under a trading program, farmers who reduce nutrient pollution from their farms could sell credits to other sources of nutrient pollution, such as wastewater treatment plants. Farmers, however, first have to meet baseline requirements representing their farm’s portion of their state’s Bay clean-up goal, before investing in additional pollution reducing measures and trading credits.

“Many but not all farms will profit from trading since profitability depends on the type and location of the farm and availability of state payments to share the cost of baseline practices, among other factors,” said Cy Jones, WRI’s Water Quality Team Leader and co-author of the reports. “It’s clear from our analysis that trading is not only a cost-effective investment for some farmers but also a cost-saving mechanism to clean up the Bay.”

How Nutrient Trading Could Benefit Pennsylvania Farms is the last report in the three-part series. How Baywide Nutrient Trading Could Benefit Maryland Farms is the second report and How Baywide Nutrient Trading Could Benefit Virginia Farms is the first.

NEWS RELEASE: Chesapeake Bay Nutrient Trading Could Benefit Maryland Farmers

Jessica Forres — Thu, 17 Jun 2010 10:58:41 -0400

Proposed federal legislation to improve the health of the Chesapeake Bay could also help a typical Maryland crop farm earn an additional $10,000 in net profit each year, according to a new analysis by the World Resources Institute (WRI).

The analysis, How Baywide Nutrient Trading Could Benefit Maryland Farms, forecasts the potential profits to farmers who participate in an interstate nutrient trading program, which could be created if Congress passes the Chesapeake Clean Water and Ecosystem Restoration Act of 2010. Under a nutrient trading program, sources of nutrient pollution, such as wastewater treatment plants, would be able to purchase “credits” from farmers who reduce their own nutrient pollution runoff.

“Excess amounts of nutrients, such as nitrogen and phosphorous, are the main cause of the Bay’s poor health,” said John Talberth, a senior economist at WRI and lead author of the analysis. “An interstate water quality trading program would make it possible to achieve restoration goals faster, at lower cost, and create additional profits for farms and others.”

Findings show that a farm with 200 acres of cropland located in the Potomac River basin could earn an overall net profit of more than $10,000 annually through the sale of nitrogen credits. The farm must meet baseline pollution-reduction requirements established by the state before participating in the trading program. Once the requirements are met, farms, depending on their location, could invest in additional pollution reductions through practices such as fencing livestock from creeks or planting upland forest buffers. The additional reductions could be sold as credits.

“Though Maryland recently launched its own state-level trading program for farmers, a Baywide program could link Maryland farmers with other existing state programs and expand trading to states without current programs,” said Cy Jones, manager of WRI’s water quality team and a contributing author. “Since most farms meet some of Maryland’s baseline requirements, investment in additional pollution reducing measures would create a win-win for farmers and the Bay.”

The analysis follows two earlier WRI studies. The first, How Nutrient Trading Could Help Restore the Chesapeake Bay, found that a Baywide nutrient trading program could help wastewater and stormwater utilities achieve clean water goals at lower costs throughout the watershed. In addition, farmer revenues from trading could rival existing public farm conservation payments. The second analysis, How Baywide Nutrient Trading Could Benefit Virginia Farms, found that Virginia crop farms could earn additional profits of more than $8,000 annually through a Baywide nutrient trading program.

Obama Administration Releases New Strategy to Clean Up Chesapeake Bay

Evan Branosky — Fri, 14 May 2010 09:33:54 -0400

The federal commitment to develop and support environmental markets could have national significance.

The most apparent challenge to restoring the Chesapeake Bay involves a balance between the competing needs of ecosystems and humans. Kingman and Heritage Islands Park, a tract of 50-forested acres along the Anacostia River in the District of Columbia, appeared to balance those needs pretty well on Wednesday morning. Great blue herons fed within walking distance of Metro’s Orange Line as the Chairperson of the White House Council on Environmental Quality, Administrator of the Environmental Protection Agency (EPA), Secretary of Agriculture, and other senior officials unveiled President Obama’s new Bay clean-up strategy.

The Strategy for Protecting and Restoring the Chesapeake Bay Watershed kicks-off the most comprehensive Bay restoration effort ever, and it does it in part though unprecedented support for environmental markets.

A New Federal Strategy for Bay Cleanup

The Bay is in bad shape, with just 12 percent of its waters having met Clean Water Act standards for dissolved oxygen between 2007 and 2009. Partially for this reason, President Obama issued an Executive Order on May 12, 2009 that required EPA and the departments of Agriculture, Commerce, Defense, Homeland Security, Interior, and Transportation to launch a new restoration effort based on collaborative action. The guiding strategy has four priorities: restoring clean water, recovering habitat, sustaining fish and wildlife, and conserving land and increasing public access.

The priorities will be achieved, in part, through four cross-cutting strategies, one of which is the development of environmental markets.

Environmental Markets and Nutrient Trading

The emphasis on environmental markets was welcome news for me and my colleagues on the Water Quality Team at WRI. Our team has worked on nutrient trading, a type of environmental market, for over ten years. With nutrient trading, regulated point sources, such as wastewater treatment plants, can comply with Clean Water Act regulations at the lowest possible cost.

Nutrient pollution has been a huge problem for the Chesapeake Bay in recent decades. When nutrients such as nitrogen and phosphorus (from sources like wastewater treatment plants, farms, and cement surfaces) run off into the Bay, they can cause algal blooms and hurt water quality.

Pollution controls can be expensive, which is where nutrient trading can provide a welcome solution. EPA policy shows how entities such as wastewater treatment plants that face high costs to reduce their nutrient discharge could purchase reductions from other sources in the form of “credits.” Farms, for example, can often reduce their runoff at a lower cost than wastewater treatment plants, so they can be a source of credits. The flexibility of market exchanges also lets new wastewater treatment plants and stormwater programs expand as more people demand the services they provide. Credit purchases reduce the impacts of additional discharges on water quality.

WRI works with states to develop nutrient trading guidance and regulations. We are also building support for linking those programs into a bay-wide trading program by forecasting the financial benefits of producing and acquiring nutrient credits from the agriculture, wastewater, stormwater, and additional sectors. Our most recent analysis found that a representative 200-acre farm in Virginia could realize $8,200 per year from participating in a bay-wide nutrient trading market under a modeled scenario.

A Template for Environmental Markets Nationwide

The strategy requires the Department of Agriculture to lead an “Environmental Markets Team” of seven agencies and the EPA. The Team will establish infrastructure for environmental markets in the Bay watershed, which includes developing tools that measure ecosystem benefits from land management practices; establishing “baseline” requirements that a farmer would need to meet before participating in a market; and establishing a platform for registering, reporting, and tracking practices to generate credits; among other tasks.

The federal commitment to develop and support environmental markets could have national significance. The strategy notes that:

Successful environmental markets in the Bay watershed might be used as a template for environmental markets nationwide.

Nutrient trading markets, of which 23 exist in various stages of development throughout the United States, could be used to achieve cost-effective reductions in nutrient pollution in other regions beyond the Chesapeake Bay watershed. WRI, for example, is evaluating the potential for markets to reduce the nitrogen and phosphorous pollution in the Gulf of Mexico (which each year suffers from a nutrient-induced “dead zone” the size of Massachusetts).

The federal effort will have the greatest impact if it involves as many stakeholders as possible. The Team should consult throughout the process—and not just at the end through public comment—with: a) the state environment agencies that ultimately decide whether or not credits count toward complying with discharge limits, b) the buyers and sellers in the markets that will provide real-world insight into the most cost-effective market designs, c) the finance community that will leverage market exchanges to achieve maximum savings, and d) the non-governmental organizations who can share their experience in market-development and analysis.

If stakeholders beyond the federal government are included during the development phase, the resulting bay-wide trading program is more likely to become the cost-effective policy mechanism we all are hoping for to help restore the Bay. In addition, it will serve as a model for impaired water bodies throughout the United States.

Protecting Waterways from a Deadly Problem

Mindy Selman — Thu, 17 Dec 2009 12:12:58 -0500

Nutrient pollution emerges as one of the greatest threats to water quality.

In the Chesapeake Bay, large schools of jellyfish scare away swimmers. In the Gulf of Mexico, a 3,000 square mile “dead zone” threatens a multi-billion dollar fishing industry. In Qindao, Beijing Olympics officials had to scoop large masses of green algae out of the water before sailing races could take place. These are all effects of eutrophication—pollution caused when nitrogen, phosphorus and other nutrients enter the water in massive amounts. And it’s a problem with which people in both the developed and developing world are becoming frighteningly familiar.

What is eutrophication?

While “nutrients” are usually seen as a good thing, eutrophication is really a matter of “too much of a good thing.” Nutrients entering waterways can come from a variety of sources, such as chemical fertilizers, vehicle emissions, treated wastewater, manure, and septic systems.

Over the past fifty years, eutrophication has increasingly become one of the greatest risks to our water quality. A new set of WRI policy notes provide a global assessment of areas at risk, a description of eutrophication sources and drivers, and a review of policies, actions, and strategies to address this deadly problem.

When too many of these nutrients run off into waterways, they upset the natural balance of aquatic ecosystems. Too many nutrients act like too much fertilizer – the nutrients feed booming algae populations, which can overrun waterways, block sunlight, and sap the water of its oxygen, creating hypoxic or “dead” zones, fish kills, and ecosystem collapse. Today, over 500 coastal areas are suffering from eutrophication, and 405 of those experience hypoxia, where oxygen levels in the water dip so low that they cannot sustain life.

Nutrient pollution is devastating to communities that depend on ecosystem services like tourism, recreation, and fisheries. For people living alongside eutrophic water, the decaying smell and the toxins released by the algae can irritate eyes, throats, and skin. Recently, Wisconsin state officials had to advise residents near algae-covered lakes across the state to close their windows, avoid walking near the shorelines, and to keep pets away too, as several dogs had died from drinking the water. “It is like living in the sewer for three weeks,” said one resident. “You gag. You cannot go outside. We have pictures of squirrels that are dead underneath the scum and fish that are dead…It has gotten out of control.”

What are the sources and drivers of nutrient pollution?

Most of these chemicals come from agricultural, urban, and industrial sources, and from the burning of fossil fuels. Over-applied synthetic fertilizers run off agricultural fields and leach into groundwater, and animal waste from concentrated livestock operations and fish farms (aquaculture) also find their way into water systems. Municipal wastewater treatment plants, industrial wastewater discharges, septic tanks, raw sewage, and storm runoff are other contributors. Pollutants can also enter waterways through the air. When fossil fuels are burned, they release nitrogen oxides (NOx) into the air which can then redeposit into the water.

The world’s growing population and economy are increasing the demand for food, land, energy, and natural resources, ultimately leading to greater agricultural production, more sewage, an use of fossil fuels. These activities in turn lead to the destruction of “nutrient sinks” like forests and wetlands that traditionally filter excess nutrients out of waterways. The rapid increase in meat consumption is one example – in China, meat production rose by 127 percent between 1990 and 2002, but fewer than 10 percent of an estimated 14,000 intensive livestock operations have installed pollution controls.

In the United States and European Union, the primary sources of nutrient pollution are typically agricultural sources, while in Asia and Africa the primary source is often urban wastewater. Developing countries have a problem with “point sources” of nutrient pollution: pipes or other outlets that discharge chemicals and sewage. North America treats 90 percent of its sewage, but Asia treats only 35 percent, Latin America and the Caribbean 14 percent, and Africa less than one percent.¹

What can be done?

Designing an effective response to eutrophication is a challenge. Pollutant sources are often miles away from the areas they affect, and many different players can share the same watershed. For example, the Chesapeake Bay watershed covers parts of six states, and the Mississippi River watershed includes 31 different states. Preventing nutrient runoff in Corn Belt state can help address the recurring dead zone in the Gulf of Mexico, over one thousand miles away. This fall, a task force dedicated to restoring ecosystems in the Gulf actually met in Iowa.

Despite the geographic challenges, the good news is that these areas can recover. Boston Harbor and the Mersey Estuary in the UK are both showing improved water quality because of better industrial and wastewater controls. The Black Seaonce had recurring hypoxic areas, but has slowly moved into a state of recovery with the reduction of fertilizer use. And New York City still gets its drinking water from the largest unfiltered water supply in the U.S., in the Catskills Mountains, since officials realized it would be cheaper to protect the watershed ecosystem than to pay to purify the water. Today, there is more sensitive land in conservation, better sewage treatment, and more sustainable forestry and farming practices in the area.

In developing countries, basic sewage treatment and improved governance can help immensely. Point sources (pipes and waste outlets) are typically the most controllable sources of nutrient pollution. Strong governance is the greater challenge. Without strong institutional authority, adequate funding, and properly trained personnel to enforce the rules already on the books, there’s only so much that good regulations and policies can achieve.

Policymakers in developed countries must look broadly at agricultural, energy, land use, and public health policies to address the diverse sources of nutrient pollution and design policies to mitigate them. Policies cannot be limited to traditional command-control approaches such as regulatory standards, nor can they focus on one single sector.

Eutrophication, like climate change, is a big picture issue. Its causes stem from our very way of life. We know the policies that would help, but the challenge is in implementation. In the end, it’s really about sustainable lifestyles.

For more information, see the full policy notes:

Part 1: Eutrophication and Hypoxia in Coastal Areas: A Global Assessment of the State of Knowledge
Part 2: Eutrophication: Sources and Drivers of Nutrient Pollution
Part 3: Eutrophication: Policies, Action, and Strategies to Address Nutrient Pollution

Martinelli, L.A. 2003. “Element interactions as influenced by human intervention.” In J.M. Melillo, C.B. Field, and B. Moldan, eds. Element Interactions: Rapid Assessment Project of SCOPE. Washington, DC: Island Press. As cited in Howarth, R. and K. Ramakrishna. “Chapter 9: Nutrient Management.” In K. Chopra, R. Leemans, P. Kumar, and H. Simons, eds. 2005. Millennium Ecosystem Assessment (MA). Washington, DC: Island Press. ↩