Conservationists are still working on a transactional model that allows farmers in the Chesapeake Bay watershed to get paid for helping the environment.
Under the program, known as environmental credit trading, farmers generate credits by adopting conservation practices such as riparian buffers, no-till farming and grass waterways.
The number of credits generated depends on the scale of the project and on how much it benefits the environment by reducing nitrogen and phosphorus runoff.
Other entities, such as developers, factories and wastewater treatment plants, can then buy those credits to compensate for their own pollution.
In the Chesapeake Bay watershed, a waterman producing 10,000 bushels of oysters per year could remove 545 pounds of nitrogen and 60 pounds of phosphorus from the waters of the bay, said Lisa Wainger, a research professor at the University of Maryland Center for Environmental Science.
Wainger spoke at the University of Maryland’s Agricultural & Environmental Law Conference on Nov. 14 at the Crowne Plaza Annapolis.
One large-scale example is the Pepacton Reservoir, a man-made lake in the Catskills that supplies much of the billion gallons of water used in New York City every day.
Under a 1997 agreement with federal and local authorities, New York City agreed to pay for the maintenance of forests around the reservoir and make other watershed improvements.
That agreement has cost the city at least $500 million, but by reducing the amount of pollution the city water system has to remove, New York has saved as much as $5 billion in treatment costs and infrastructure upgrades, said Kris Johnson, the deputy director of the Nature Conservancy’s North American agricultural program.
Farmer-focused credit marketplaces generally operate on a much smaller scale, but they could have thousands of participants.
Governments, businesses and nonprofits would pay for farmers to use no-till techniques, plant riparian buffers, and plant field terraces, Johnson said.
In Maryland, farmers start by establishing a baseline pollution load for their farm, said Matthew Clagett, assistant attorney general for the Maryland Department of the Environment.
Activities that push pollution below the baseline can be recorded and reported to the state Ag Department.
Once the agency certifies the credits, the farmer can sell them on the trading marketplace.
One of the challenges, Clagett said, is verifying that trades actually result in the reduction of pollutants.
Trading programs are sometimes described as market-based, but while they entail a series of transactions, they aren’t exactly based on the free market.
Successful credit marketplaces generally develop as a way to meet government regulations, according to USDA’s Natural Resources Conservation Service.
The Nature Conservancy and other groups have been promoting credit trading for some years in the bay watershed, but complicated procedures and a lack of guarantees that farmers would keep the practices in place have slowed adoption.
Some environmentalists also say trading systems simply allow companies to pay to pollute and don’t really solve the problem.