While the Obama administration is touting Virginia's pollution trading program as an "innovative market-based approach" to cleaning up the Chesapeake Bay, Maryland's trading effort remains stuck in limbo after years of study and debate.
Federal officials last week called Virginia's program a model for other states struggling with the high costs of cleaning up polluted waterways. Under it, the state is working to reduce phosphorus pollution fouling the bay by having private investors pay farmers to reduce soil erosion and runoff of fertilizer from their fields.
Those reductions, gained through planting streamside trees and other voluntary conservation measures, are "banked," then sold to public or private developers who need to compensate for their construction impacts on waterways.
Buying banked pollution "credits" from farmers and other landowners has cost about half what the state would have had to spend on building stormwater retention ponds and underground filters at construction sites that would curtail polluted runoff from the projects.
Maryland has been working since 2008 to set up its nutrient pollution trading program but has yet to register a single transaction.
The state has been given $750,000 in federal funds since 2008 to set up its marketplace for buying and selling nutrient pollution credits. Maryland's Department of Agriculture developed a website where pollution "credits" can be registered and offered for sale to buyers.
To date, according to state agriculture officials, more than 200 farms — or about 2 percent of the state's farm acreage — has been evaluated for eligibility to sell nutrient credits. Although about 60 percent of Maryland farms evaluated could meet the requirements to engage in trading, state officials say, only two have ever registered any pollution credits for sale, and no trades have taken place.
"We're pretty much on the cusp," said Susan Payne, coordinator of ecosystem markets for the Maryland Department of Agriculture.
Her department has drawn up regulations spelling out how trades are to occur, but to make the marketplace for pollution credits work, the state's environmental regulators need to set rules spelling out the circumstances in which such pollution trades can be used to offset environmental impacts.
State environmental officials have been unwilling to go forward unless they can achieve consensus on how to proceed. A work group met for six months last year and agreed on three-fourths of the issues raised, but could not come together on the remainder, including concerns about being able to verify pollution reductions.
Asked when trading may start in Maryland, David Costello, deputy secretary of the Maryland Department of the Environment, said, "So much has been done, so if the new administration wants to continue to move forward, possibly next year."