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Nutrient Assimilation Services for Water Quality Credit Trading Programs

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  • Stephenson, Kurt
  • Shabman, Leonard

    (Resources for the Future)

Abstract

Water quality trading programs envision regulated point sources meeting discharge control requirements and then being allowed to increase their nutrient discharge if they secure nutrient reduction credits from other pollutant sources in the watershed. Reduction credits can be created when agricultural land managers implement best management practices and regulators predict that those practices will result in water quality conditions equivalent to controlling discharges at the regulated source. However, natural variability in runoff combines with model and data limitations to make predictions of water quality equivalence uncertain. Nutrient assimilation credits can be created by increasing the capacity of the ecosystem to assimilate nutrients through investments in aquatic plant biomass creation and harvest, shellfish aquaculture, stream restoration, and wetlands restoration and creation. Nutrient assimilation credits can provide greater certainty than agricultural best management practices that trading will result in equivalent water quality. Such credits should be an option in trading programs.

Suggested Citation

  • Stephenson, Kurt & Shabman, Leonard, 2015. "Nutrient Assimilation Services for Water Quality Credit Trading Programs," RFF Working Paper Series dp-15-33, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-15-33
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-15-33.pdf
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    References listed on IDEAS

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    1. Shortle, James, 2013. "Economics and Environmental Markets: Lessons from Water-Quality Trading," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(1), pages 57-74, April.
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    8. Marc Ribaudo & Jeffrey Savage & John Talberth, 2014. "Encouraging Reductions in Nonpoint Source Pollution through Point-nonpoint Trading: The Roles of Baseline Choice and Practice Subsidies," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(3), pages 560-576.
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    Cited by:

    1. Petrolia, Daniel R. & Walton, William C. & Cebrian, Just, 2020. "Oyster Economics: Costs, Returns, and Ecosystem Benefits of Commercial Bottom Production, Commercial Off-Bottom Aquaculture, and Non-Harvested Reefs," Working Papers 309359, Mississippi State University, Department of Agricultural Economics.
    2. Fleming, Patrick & Lichtenberg, Erik & Newburn, David, 2018. "Water Quality Trading Program Design with Heterogeneous Behavioral Responses," 2018 Annual Meeting, August 5-7, Washington, D.C. 274429, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    water quality; trading; nutrient pollution; Clean Water Act; assimilation;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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