Federal grants to boost Bay pollution trading efforts

The Chesapeake Bay region's fledgling pollution "trading" programs are getting an infusion of federal funds aimed at encouraging farmers to participate.

The U.S. Department of Agriculture announced Friday that it's awarding five grants totaling $2.6 $2.35 million to boost pollution trading efforts in Maryland, Pennsylvania and Virginia. They're part of $26 million in "conservation innovation" grants being handed out nationwide, including funds to support other water-quality trading along the Ohio River and in Oregon.

Agriculture Secretary Tom Vilsack said the grants were the first to promote pollution trading and reflected the Obama administration's commitment to boost rural economies while also protecting the environment.

Vilsack said the grants would assist the states in establishing trading programs that would encourage farmers to earn marketable pollution "credits" by planting trees or adopting other conservation practices to reduce polluted runoff from their land.  They could then sell those credits to communities facing requirements to reduce pollution from sewage treatment plants or from storm-water runoff.

"By encouraging and creating new income sources for farmers and landowners in the Chesapeake Bay area," he said, "we think we can reduce nitrogen and phosphorus and therefore improve the health of the bay over time. ...We’re going to help states basically create the rules and infrastructure that will allow a water quality market to exist. "

The Maryland Department of Agriculture is to get $500,000, for instance, to analyze demand for nutrient pollution credits, and also to help planners and permit reviewers to craft requirements for offsetting future pollution from growth and development. Another $438,000 will go to the Alliance for the Chesapeake Bay, a (federally corrected 8/27) mostly government-funded nonprofit, to encourage trades in which farmers and other landowners would plant trees to reduce polluted runoff and offset pollution elsewhere. 

Other grants would go to groups in Pennsylvania and Virginia, including a $701,000 award to the Chesapeake Bay Foundation, to help 200 farmers in those two states determine if they are eligible to earn pollution criedits that they could subsequently sell. The Annapolis-based environmental group has been a proponent of pollution trading, though other groups have voiced concern or outright opposition.

Vilsack called trading "a much stronger, more incentive-based way of encouraging as opposed to regulating" to reduce pollution.  He said he hoped the grants would help "create a predictable infrastructure, so farmers are able to understand the value of these credits and make an informed business decision about whether to engage in conservation."

The Center for Progressive Reform, a Washington-based think tank that favors strong government regulation, recently published a report warning that the bay region's pollution trading efforts could hurt poor and minority communities by permitting water quality to get worse or not improve in some places while pollution elsewhere got cleaned up.

Nicholas DiPasquale, the EPA's bay program office director, said in an interview that the agency is working with states to tighten their trading rules and programs to ensure such inequities do not happen.  All trades will be "subject to full transparency," he said, with the public given notice of proposed trades and a chance to review and comment on the details.  Moreover, state regulators will be given guidelines for how to ensure that trades do not lead to localized water-quality problems.

"There are some built-in safeguards," he said, and ultimately the purchaser of the pollution credit will be responsible for seeing that it represents a real and lasting improvement in water quality.





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