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Study: Pollution trading could trim bay cleanup costs

Steep projected costs for cleaning up the Chesapeake Bay could be trimmed by billions of dollars, a new study suggests, by allowing polluters to buy "credits" for less-expensive reductions made by others.

The study, presented Thursday to the Chesapeake Bay Commission, an advisory panel of legislators from Maryland, Pennsylvania and Virginia, estimates that nutrient pollution trading could trim projected costs for upgrading sewage treatment plants and controlling urban and suburban storm water pollution by $1 billion or more a year baywide.

Millions more could be saved, the report says, by letting developers and communities pay farmers to plant trees or create wetlands on their land to offset nutrient pollution produced by growth and new development.

The economic analysis, done by RTI International of Research Triangle Park, N.C., comes as officials in the six-state watershed, which includes the District of Columbia, Delaware, New York and West Virginia, wrestle with hefty preliminary cost projections for reducing nutrient and sediment pollution enough to comply with a bay restoration plan imposed by the Environmental Protection Agency.

Maryland officials have estimated cleanup could cost $15 billion in the state alone by 2025, the deadline for meeting the bay's "pollution diet." Virginia officials have projected costs of $7 billion to nearly $15 billion.

Maryland, Pennsylvania, Virginia and West Virginia have embraced varying approaches to nutrient trading as part of their bay cleanup plans.

The bay commission has not taken a stance on nutrient pollution trading, but Ann Swanson, its executive director, said the study shows that it can reduce cleanup costs even if it is limited in scope.

"This appears to be another approach that can help us on a more cost-effective path," she said. "Make no mistake, it is still going to cost a lot of money, but it doesn't have to cost everything."

Under the states' plans, farmers would be allowed to sell nutrient pollution "credits" by offering to adopt conservation practices on their farms that they're not already required to have to keep fertilizer and animal manure from washing off their fields into nearby streams. Those practices would include planting winter cover crops to soak up excess nitrogen left in the soil after a harvest, or leaving grassy strips along streams to capture runoff.

Industries or communities required to reduce discharges of nitrogen and phosphorus could buy those "credits" in lieu of making more costly upgrades to sewage treatment plants or instead of retrofitting aging storm sewers.

Nutrient trading has divided environmental groups. Some believe it could help overcome political resistance to the rising costs of the bay cleanup. But others contend that there's too much chance of abuse, and that allowing polluters to shift their cleanup burden could worsen water quality in some communities.

"This is opening up a Pandora's box that has little chance of success, no track record and a potential for being a disaster," said Scott Edwards of Food & Water Watch, a Washington-based environmental group.

Some scientists caution that trading needs more study before it is tried throughout the 64,000-square-mile watershed. William Dennison, vice president of the University of Maryland Center for Environmental Science, said using such a market-based trading approach holds great potential to reduce cleanup costs, but could go haywire if not carefully set up and overseen.

Swanson said the study only looked at trading where it would not hurt local water quality. It also assumed higher costs for pollution credits to cover uncertainty about the effectiveness of some farm conservation practices and to provide funds for verifying that pollution reductions occur.

The study projected that trading could reduce costs projected for upgrading sewage plants by 20 percent to nearly 50 percent, while communities facing requirements to control their storm water pollution might reduce costs by up to 80 percent by paying farmers to curb their runoff more.

But some river basins or individual states might realize little or no savings, the report says, if trading is narrow or cleanup options are limited.

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