EPRI-Ohio Water Quality Trading Project

Created with Alissa Weingandt for EPRI.

About the Project

From EPRI’s Ohio River Basin Water Quality Trading Project page:

Water quality trading is an innovative market-based approach to achieving water quality goals for nutrients such as phosphorus and nitrogen through programs that allow permitted emitters to purchase nutrient reductions from another source. Control costs for any one nutrient can differ from one emitter to another, and water quality trading provides an option for meeting discharge requirements in a cost-effective manner.

Since 2007, the Electric Power Research Institute and a strong collaboration of power companies, wastewater utilities, farmers, state and federal agencies and environmental interests have been working to develop a regional interstate water quality trading framework in the Ohio River Basin. As environmental impacts come from many sources, our project is facilitating broad non-traditional collaborations to achieve a common goal of protecting and improving watersheds at lower overall costs. Properly designed and deployed, the proposed trading program in the Ohio River Basin will allow exchanges of water quality credits for nitrogen and phosphorus.

In August 2012, Ohio, Indiana and Kentucky siged the trading plan making it now the world’s largest water quality trading program. At full scale, it could span up to eight states and potentially create a market for 46 power plants, thousands of wastewater utilities, and approximately 230,000 farmers. The program has the potential to move millions of private dollars into the farm economy bypaying farmers for reducing nutrient loading. Utilizing solid scientific foundations, this project could result in a multi-industry market that will accelerate cost-effective water quality improvements and provide important ancillary ecological benefits. Following years of establishing strong project foundations, the project team plans to execute a series of pilot trades beginning in 2013 through 2015.