By Marguerite Huber

Chesapeake Bay watershed includes six states and the District of Columbia. Image: NASA/Goddard Space Flight Center Scientific Visualization Studio

The outcome of a trade can sometimes be the luck of the draw. You may not have gotten a better sandwich for the one you traded at lunch, or the all-star pitcher your team acquired in that mid-season trade may turn out to be a bust.

On the other hand, the best kind of trade is one where everybody wins. EPA researchers are helping bring just that kind of trade to improve water quality.

Chesapeake Bay is an expansive watershed that encompasses some or all of six states and the District of Columbia. High levels of nutrients flowing in from all over that expansive watershed decrease oxygen in the water and kill aquatic life, creating chronic and well-known dead zones.

To help, EPA established the Chesapeake Bay Total Maximum Daily Load (TMDL), which sets a cap on nutrient and sediment emissions to restore water quality, ensure high quality habitats for aquatic organisms, and protect and sustain fisheries, recreation and other important Bay activities.

Recent innovations in Chesapeake Bay and elsewhere have promoted a new type of trading, called water quality trading, to meet watershed-level reductions in nutrient pollution. The goal is to facilitate individual flexibility and responsiveness while creating incentives to reduce overall nutrient flow from both agricultural and urban areas.

Here is how water quality trading would work…

Farmers and wastewater treatment plants have the opportunity to team up to collectively meet the water quality goal by reducing nutrients. While both entities have their own baseline nutrient emission level they must shoot for, they can gain tradable credits if they do better. A farmer that plants nitrogen-absorbing crops such as barley and wheat can sell the credits they gain to a wastewater treatment plant that needs to reduce its own emissions.

A healthy Chesapeake is a win for everybody!

Trading is based on the widely different costs it can take to control the same kind of pollutant, depending on its source and location. For example, upgrading wastewater treatment plants and ripping up urban streets to replace leaky stormwater drainage pipes could cost billions of dollars. On the other hand, planting new or different crops is much less expensive.

Like the TMDL itself, the development of the water trading system began with science. EPA-supported scientists and economists developed a computer model to find the least costly mix of pollution-reduction options across the watershed for meeting the TMDL. The model also has been used to explore how different trading policies could help to meet TMDL requirements, and as the basis for analyzing policies leading to the nutrient trading guidelines for Chesapeake Bay.

Overall, water quality trading depends on cooperation across the watershed to help achieve faster, less expensive pollutant reductions that improve the Bay’s water quality. It’s a win-win for everybody.

About the Author: Marguerite Huber is a Student Contractor with EPA’s Science Communications Team.