Nutrient Trading: Markets or Mayhem

On January 23, 2015, in Environment, Politics, by An American

David Foster will discuss using Nutrient Trading Markets to clean up the Chesapeake Bay with The Community Breakfast Group (CBG) at their January 29 meeting. David is an Environmental Economist with a PhD in Environmental Planning and Policy Analysis from the University of North Carolina at Chapel Hill. He has extensive experience in environmental planning for the U.S. Agency for International Development, and has served as Riverkeeper for the Chester River Association.

The Clean Water Act passed in 1972, but there has been little progress since then in actually cleaning up the Chesapeake Bay and the surrounding rivers. The cost of such cleanup, estimated at $14 to $30 billion for Maryland alone, is an important reason that progress in cleaning up the Bay has been slow. There has been little agreement as to who will actually have to put up the money.

The latest approach to solving the problem has been the arbitrary establishment of Total Maximum Daily Loads (TMDLs) for each state by the EPA, and then leaving it up to each state to decide who is to pay. While sticking each state with the enforcement of the quotas shields the Federal Government from much of the political blowback from enforcement of the quotas, such a quota system does not lend itself to cost-effective approaches to pollution control. Planting trees or switchgrass can remove nitrogen for less than $5 per pound while retrofitting urban stormwater controls can cost $500 per pound or more. However, using the political process to establish quotas often leads to ineffective resource allocation and outright corruption.

Establishing a nutrient trading market is a better way to help insure that pollution control is done fairly and at the lowest possible cost. In such a market, the rights to pollute could be traded or sold. Once such a market was established, the government would have a better mechanism for controlling the total amount of pollution and assuring that cost of reducing this pollution was minimized.

The CBG meets for breakfast every Thursday at 7:30AM at the Holiday Inn Express in Chestertown. Our meetings start promptly at 7:30AM, so you may want to come at 7:15AM to get your breakfast before the meeting. Our website is



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