These tables serve as a reference document containing the key design elements of nutrient trading programs in four Chesapeake Bay states: Maryland, Pennsylvania,
Virginia, and West Virginia.
Over the last ten years, four Chesapeake Bay states—Maryland, Pennsylvania,
Virginia, and West Virginia—introduced nutrient trading programs to provide
wastewater treatment plants with flexible options for meeting and maintaining
permitted nutrient load limits. At least one other bay state, Delaware, also
convened a work group to discuss developing such a program. Through these programs,
wastewater treatment plants may purchase credits or offsets generated
by other wastewater treatment plants or farms that reduce the nutrients they
release to impaired water bodies. States are also exploring options for construction
and urban stormwater programs to buy and sell credits and offsets.
To date, most credit transactions have occurred between buyers and sellers
in the same state. Efforts to enact the recent Chesapeake Bay total maximum
daily loads (TMDLs), however, could provide more opportunities for interaction
by trading partners from different states. For example, regulated entities could
seek credits or offsets from other states when the supply in their own state has
been exhausted. In addition, entities in states that do not have a trading program
could seek credits or offsets from entities in states that do have such a program.
Although the elements of many of the trading programs are identical or very similar,
such as calculation platforms, included pollutants, and allowable participants,
there are several differences as well. Examples are the time period that defines the
life of a credit or offset and the varying types and values of trading ratios. States
may need to address these and other differences before permitting more cross-state
transactions. Regardless of how these differences are resolved, government regulations require credit transactions to be documented in the public record.
The World Resources Institute (WRI) has compiled into comparison tables the key
design elements of the four state trading programs. The tables comprise a reference document for policymakers and others addressing the programs’ differences.
These design elements are grouped into twelve categories based on their common
characteristics. All the information is current as of May 2011; was paraphrased
directly from the statute, regulation, policy, or guidance documents; and has been
reviewed by trading experts. Nonetheless, this information will undoubtedly change
as the states refine their strategies for implementing the TMDLs.