Trading and Offsets in the Chesapeake Bay Watershed
EPA expects that new or increased loadings of nitrogen, phosphorus and sediment in the Bay watershed will be offset by reductions and credits generated by other sources.
In Section 10 of the Chesapeake Bay TMDL document, EPA explains how Bay jurisdictions may accommodate new or increased loadings of nitrogen, phosphorus and sediment. The Bay jurisdictions include Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia and the District of Columbia. New or increased loadings may be accommodated either through a specific TMDL allocation or by offsetting those loadings with quantifiable and accountable reductions.
Appendix S of the Chesapeake Bay TMDL document discusses a number of definitions and common elements that EPA expects the jurisdictions to include and implement in their offset programs. EPA also anticipates using these definitions and elements in reviewing the jurisdictions' trading programs.
Beyond permitting and nonpoint source controls, water quality trading is one approach that jurisdictions may use to achieve the load reduction requirements. Water quality trading is a market-based approach providing economic incentives for voluntary pollutant reductions from point and nonpoint sources of pollution to improve and preserve water quality.
Trading can provide greater efficiency in achieving water quality goals in watersheds. Trading can allow one source to meet its regulatory obligations by using pollutant reductions created by another source with lower pollution controls.
EPA supports implementation of the Bay TMDL through water quality trading programs established and implemented in a manner consistent with the Clean Water Act, and its implementing regulations. Trading programs must also be consistent with EPA's 2003 Water Quality Trading Policy and the 2007 Water Quality Trading Toolkit for National Pollutant Discharge Elimination System Permit Writers.
EPA does not support any trading activity that would delay or weaken Bay TMDL implementation or that is inconsistent with the assumptions and requirements of the TMDL. Additionally, EPA does not support trading that would cause the combined point source and nonpoint source loadings covered by a trade to exceed the applicable TMDL loading cap.
For more information:
In addition to state-specific Bay TMDL information available through EPA, the Bay jurisdictions iwth trading and/or offset programs in place have individual websites as indicated below. The Bay jurisdictions include Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia and the District of Columbia. Read EPA's assessments of the jurisdictions' trading and offset programs on the Sector-Specific EPA Oversight in the Chesapeake Bay Watershed page.
- Delaware - At this time, Delaware does not have a water quality trading-specific website. However, the Delaware Department of Natural Resources and Environmental Control reports on water quality and the TMDL.
- District of Columbia - The Department of Energy and Environment is in the process of establishing an offset program. They released a 2013 Rulemaking on Stormwater Management and Soil Erosion and Sediment Control on July 19, 2013. It is available on the Department of Energy and Environment website.
- Maryland - Information on the Maryland Nutrient Trading Program can be found through the Maryland Department of Agriculture.
- New York - At this time, New York does not have a water quality trading-specific website. However, the New York Department of Environmental Conservation reports on water quality and the TMDL.
- Pennsylvania - Information on Pennsylvania's nutrient trading program can be found on the Pennsylvania Department of Environmental Protection website.
- Virginia - Information on Virginia's nutrient trading program can be found on the Virginia Department of Environmental Quality website. Additional information is available through the Virginia Nutrient Credit Exchange Association.
- West Virginia - At this time, West Virginia does not have a water quality trading-specific website. However, the West Virginia Department of Environmental Protection reports on water quality and the TMDL.
- Water Quality Trading Assessment Handbook: Can Water Quality Trading Advance Your Watershed's Goals?
- Water Quality Trading Toolkit for Permit Writers Updated June 2009
- Web-based Water Quality Training Modules
- Water Quality Trading Evaluation
- Chesapeake Bay Program Nutrient Trading Fundamental Principles and Guidelines (PDF)(87 pp, 2.1 M, About PDF)
- Water Quality Trading - World Resources Institute