Trading up to Save the Chesapeake Bay? A Reexamination of Nutrient Credit Trading as a Tool for Restoring Water Quality in the Bay Open Access
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The health of the Chesapeake Bay has been a national concern for over twenty-five years, but no single policy approach has successfully restored the impaired water quality of the Bay. Nutrient trading is a market-based approach that is intended to achieve reductions in nutrient pollution and improve water quality using the most cost-effective means. Trading is an appealing option for the Chesapeake Bay because a major group of nutrient pollution contributors, agricultural non-point sources, may institute relatively inexpensive conservation practices to achieve nutrient reductions and produce tradable credits. While it is true that previous attempts to facilitate trading have been more successful in theory than in practice, trading offers several popular features that make it a more acceptable option to address nutrient pollutions than other policy alternatives. As such, trading can be a valuable tool when used in conjunction with other reduction mechanisms. Particularly in a political climate where alternative regulatory approaches are likely to be seriously encumbered, nutrient trading can advance nutrient reduction efforts and complement, or even temporarily supplement, other policy options. Despite the limitations of trading, it may be the most feasible approach in the near term considering that new, comprehensive command and control regulations of non-point sources and other mechanisms like nutrient taxes are not likely to be politically feasible for some time. To improve the chances of success for nutrient trading in the Bay, existing state trading programs must be harmonized, and trading participation must improve. Engaging interested participants, particularly agricultural non-point sources of nutrient pollution, and developing better program infrastructure now will help ensure program integration and increase the likelihood of a successful Bay-wide trading scheme in the future.