USDA, EPA Offer New Resources to Support Water Quality Trading

Sept. 18, 2015
The joint workshop followed a recent announcement of $2 million in conservation innovation grants to support water quality trading markets

Following the recent announcement of $2 million in Conservation Innovation Grants to support water quality trading markets, the U.S. Department of Agriculture (USDA) and the U.S. Environmental Protection Agency (EPA) hosted a joint workshop to expand markets for water quality benefits generated on farms, ranches and forest lands.

Water quality trading is an approach to reduce pollution and efficiently achieve water quality goals. Trading is based on the fact that sources in a watershed can face very different costs to control the same pollutant. Trading programs allow facilities facing higher pollution control costs to meet their regulatory obligations by purchasing environmentally equivalent (or superior) pollution reductions from another source at lower cost, thus achieving the same water quality improvement at lower overall cost.

USDA and EPA signed a partnership agreement in 2013 to advance water quality trading and other market-based approaches that provide benefits to the environment and economy. The workshop attracted more than 200 participants involved in water quality trading from across the nation.

"Conservation practices that improve soil health and conserve nutrients also produce real water quality benefits. With support from USDA and our federal partners, water quality markets can create incentives to increase these environmental benefits and boost investment in rural America. The actions we are announcing today will help us get there," said Ann Mills, USDA deputy under secretary for natural resources and environment.

Among the new water quality trading resources announced:

  • EPA-USDA Water Quality Trading Roadmap. The Water Quality Trading Roadmap is a decision support tool for those designing and participating in water quality trading programs. The roadmap is a searchable database that consolidates policy guidance from EPA, information from state programs, and examples and supporting materials from across the U.S.
  • EPA-USDA partnership on EnviroAtlas to support environmental markets. USDA and EPA will incorporate environmental markets data layers into the federal ecosystem service decision support tool, EnviroAtlas. The data layers will show where markets for water, carbon, wetlands and habitats occur on the U.S. landscape, provide information about these markets and allow this information to be displayed in the context of existing environmental data from federal agencies.
  • Nutrient Tracking Tool (NTT). USDA will release this fall the next version of NTT, ready for use in the Pacific Northwest and Ohio River Basin. The new version of NTT is a USDA hosted, user-friendly, Web-based tool that calculates edge of field nutrient and sediment loads for use in conservation planning and environmental market credit calculation. NTT will be made available in additional regions in 2016.
  • USDA Environmental Markets Website. USDA released the department-level environmental markets website. The site integrates information, tools and resources on environmental markets from across the Department, allowing users to easily gain a snapshot of environmental market activities at USDA.

These new resources were announced days after the Natural Resources Conservation Service awarded over $2 million in Conservation Innovation Grants to support water quality trading markets. The 2015 Water Quality Trading Conservation Innovation Grant Awardees are:

  • Conservation Marketplace Midwest ($243,933, Minnesota). Proposes to develop and pilot a Field Stewards program, a conservation credit system designed to allow companies in the food industry to buy "offsets" for water quality and agricultural conservation. Through the purchase of certification credits, food companies can demonstrate sustainability to their customers without having to create a new chain-of-custody supply chain for agricultural commodities, keeping costs low for retailers and the consumer.
  • Electric Power Research Institute ($300,000, Indiana, Kentucky, Ohio). Proposes to develop and execute, for the first time, trades of "stacked" ecosystem services—both water quality and greenhouse gas emissions reduction credits. EPRI administers the Ohio River Basin nutrient trading program, the only multi-state trading program in the country.
  • Great Lakes Commission ($400,000, Indiana, Michgian, Ohio). Substantial water quality issues plague the Western Lake Erie Basin, leading to harmful algal blooms each summer in Lake Erie. The Great Lakes Commission proposes to develop a framework for water quality trading in the basin. 
  • Iowa League of Cities ($700,000, Iowa). Proposes to develop a framework for water quality trading in Iowa to support the State's Nutrient Reduction Strategy.
  • National Association of Conservation Districts ($116,725, nationwide). Proposes to develop guidance materials and engage in outreach and training to increase participation of soil and water conservation districts in nutrient trading programs. In many water quality trading programs, district employees are the conservation experts interacting with agricultural producers generating credits from the installation of conservation practices.
  • Virginia Tech University ($285,729, Virginia). Proposes to develop the information and tools required to incorporate agroforestry into Virginia's nutrient trading program, which currently largely depends on the retirement of marginal agricultural lands for credit generation. In December 2014, USDA, EPA and the State of Virginia celebrated a first-of-its-kind transaction when the Virginia Dept. of Transportation purchased phosphorous credits generated by a Virginia farmer.

Source: U.S. Department of Agriculture

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