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West Virginia Water Research Institute
West Virginia University

WV Potomac Water Quality Bank and Trade Program

Background Return to top

The WV Water Research Institute, the World Resources Institute, and the Natural Resource Conservation Service are teaming up with local, state, and regional stakeholders from the public and private sectors to initiate the WV Potomac Water Quality Bank and Trade Program. The Program is designed to help reduce nutrient and sediment loadings in the Eastern Panhandle and the Chesapeake Bay in a manner that supports local economic development and promotes sustainable and rural land resource management.

In order to restore the water quality and aquatic habitat of the Chesapeake Bay, all political jurisdictions within the watershed have agreed to achieve voluntary load reductions in nitrogen, phosphorus, and sediment by the year 2010. West Virginia (WV) is required to achieve load reductions of 33% for nitrogen, 35% for phosphorus and 6% for sediment in the Potomac River drainage. If the total load reductions to the Bay are not achieved, the U. S. Environmental Protection Agency (EPA) will develop a total maximum daily load reduction (TMDL) for the Bay that will further restrict point-source loadings throughout the Bay watershed, resulting in unnecessary harm to growing watershed economies.

The project partners intend to develop and implement a transparent, credible, and successful water quality trading program in the WV portion of the Potomac that will increase investment in BMPs thereby reducing non-point source loadings. We anticipate that the framework will be transferable to other watersheds in the Bay drainage and elsewhere providing for future growth. The World Resources Institute (WRI), a key partner in this project, has developed a web-based electronic trading platform for the Potomac, NutrientNet (www.NutrientNet.org) that is being modified to establish a standardized credit estimation method for developing real, surplus, and quantifiable trading credits. The application of NutrientNet will reduce overall project cost, trade transaction costs and provide program transparency, and increase the transferability of our model to other sub-watersheds in the Bay.

Although WV has not yet developed and implemented a trading program, there is public support within this watershed and at the state level for a market-based program that would provide additional funding to meet the Bay CLAs and avoid the EPA TMDL. Given this, we are integrating the trading program into the existing funding, procedures, staffing, and infrastructure of the state BMP cost-share program and related complementary programs.

Program Objectives

The primary goal and purpose of this project is to develop and implement an incentive-based program to more cost-effectively achieve the Bay CLAs for nutrients and sediment. The secondary goals are to provide for sustainable economic development in the watershed and provide a trading framework that will be transferable to other watersheds. Our objective is to develop a stakeholder driven water quality trading credit market that will provide funds from point sources to offset the cost of additional BMP installation and maintenance.

Duration of the Project

The current NRCS CIG grant period is three years (2006-2009). Staff has initiated efforts to sustain funding for related projects into the indefinite future. Project outputs and outcomes, however, will be designed to carry the program forward without public funding.

Biannual Progress Reports Return to top

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