Pennsylvania Among First to Apply Trading to Water Quality
Source: 
Pennsylvania Office of the Governor

Pennsylvania Governor Edward G. Rendell introduced a nutrient and sediment-trading policy that will help farmers, communities and industry meet and exceed state and federal water quality goals. Trading has long been a staple of state and federal air quality programs, but Pennsylvania is among the first to apply this strategy to water quality.
"Pennsylvania is leading the country in the development and deployment of new measures to address some of our most serious and challenging environmental problems," Governor Rendell said. "Nutrient trading provides an environmentally creative and cost-effective way to tackle water quality issues in the Commonwealth."
Market-based programs such as trading provide incentives for entities to create credits by going beyond statutory, regulatory or voluntary obligations and goals. These programs provide a structure where environmental improvement credits can be traded to others to help them more cost effectively meet their obligations or goals.
Environmental Protection Secretary Kathleen A. McGinty, who testified today before a joint hearing of the Senate Environmental Resources and Energy Committee and the Senate Agriculture and Rural Affairs Committee, said the nutrient trading policy is an important step to putting in place a framework and the infrastructure for trading and other market-based initiatives critical to Pennsylvania's Chesapeake Bay Tributary Strategy.
"Our efforts will ensure that water in Pennsylvania is safe to drink,
clean enough for fish and abundant in supply to sustain our economy," said McGinty, who also will testify Wednesday before the House Environmental Resources and Energy Committee. "The work we do at home ultimately serves to help the Bay, but our work is aimed first and foremost at supporting the people and the economy of Pennsylvania."
For Pennsylvania, yearly nitrogen, phosphorus and sediment discharges to the Chesapeake Bay must be reduced to no more than 71.9 million pounds, 2.46 million pounds and 0.995 million tons, respectively. The nutrient trading program provides a low-cost innovative approach to compliance for significant sewage and industrial dischargers faced with the challenge of reducing their nutrient loads to meet these criteria.
The U.S. Environmental Protection Agency recently approved new water quality standards, calling on states in the Chesapeake Bay watershed to step up their efforts to control nutrients reaching the Bay by regulating nitrogen and phosphorus pollution from wastewater treatment plants.
As a result, Pennsylvania recently approved its first permit including
phosphorus and nitrogen load limits to Fort Indiantown Gap, Lebanon County. Included in this permit is the opportunity to use nutrient trading credits or offsets to achieve these standards.
While requiring nutrient reduction at significant point source dischargers ultimately will help restore the Bay, it also provides invaluable environmental and public health benefits in Pennsylvania.
"Pennsylvania's wastewater infrastructure is among the key missing links in the state's attempt to promote economic prosperity. We have to upgrade our infrastructure if we are going to grow our economy," McGinty said. "The generous and aggressive economic development efforts of state government will not change Pennsylvania without wastewater infrastructure that can support our growth and if families and businesses don't have confidence that water is safe to drink."
Several streams within Pennsylvania's portion of the Bay basin suffer from elevated nitrate levels threatening drinking water supplies. Excessive levels of nitrate in drinking water can cause serious illness and sometimes death. The serious illness in infants, often called "blue baby syndrome," is due to the conversion of nitrate to nitrite by the body, which can interfere with the oxygen-carrying capacity of a child's blood.
In Octoraro Creek, Chester County, nitrate levels exceed drinking water standards 50% of the time. This impacts several facilities in the watershed including the Chester Water Authority, which must blend water from the Susquehanna River to meet drinking water standards, and Pennsylvania American Water Co., whose Coatesville plant has not been used for three years due to the high nitrate levels in the Octoraro Watershed.
While many facilities in the Bay basin can cost-effectively achieve
nutrient reductions by proper planning and operational changes, others may have to incur capital costs. Nutrient trading allows these facilities to look at nutrient reduction as an economic opportunity --- one that will benefit not only the Chesapeake Bay but also streams like the Octoraro, where nitrates threaten public health and quality of life.
More than half of Pennsylvania is within the Chesapeake Bay Watershed. Pennsylvania's tributary strategy will improve water quality in the 13 sub-basins that make up the Susquehanna and Potomac river watersheds.
The strategy embraces a suite of best management practices for nonpoint and point sources --- agriculture, wastewater treatment plants, urban stormwater and septic systems --- to meet nutrient and sediment reduction criteria. Nutrients trading positions Pennsylvania to take giant steps in nutrient reduction and at the same time make crucial investments in communities.

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