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Mercer Watershed Target of Water Quality Trading Study

Mercer Watershed Target of Water Quality Trading Study

Study says water quality trading may prove an appropriate tool for improving water quality without breaking the bank. Its success depends on the forethought and planning of partners coming together to work toward the same water quality goals.

The Conservation Technology Information Center has released a report on the potential for water quality trading program success in the Wabash River basin, which spans from the Wabash River headwaters in Mercer County, Ohio, then southwest through parts of Indiana and Illinois.

This two-year study analyzed factors required for a viable, sustainable water quality trading program to benefit agricultural producers, regulated water discharging facilities and local water quality.

This kind of program is beginning to take hold in areas across the country. How does it work?

Generally, farmers implement conservation practices and sell the amount of nutrients (fertilizer or manure applied to maximize crop yield) or soil kept from escaping the farm with each rain. Facilities discharging water into water ways buy the reductions to help meet their water quality regulatory requirements.

Facilities such as wastewater treatment plants facing more stringent regulatory requirements may find it less expensive to pay farmers to implement conservation practices than to expand their facilities or install new treatment technologies.  In this way, discharging facilities still improve water quality and spend less to do it. This can mean reduced costs for customers as well.

Equally, water quality trading could provide opportunities for agricultural producers to enhance their on-farm conservation efforts.

Factors necessary for a successful program include well-defined sources and amounts of pollution, appropriate levels of pollution control and implementation costs and economic suitability, which include participants' willingness to pay for and sell water quality credits.

And drivers such as new, more stringent quality standards, such as those imposed for Wisconsin lakes, or other incentives must motivate facilities to participate. Until these drivers emerge, water quality trading programs will most likely be limited to watersheds implementing total maximum daily loads, calculations of the maximum amount of a pollutant that a water body can receive and still safely meet state water quality standards.

CTIC's findings indicate that under the right circumstances, water quality trading in the Wabash River basin can provide substantial economic and environmental benefits. The report provides necessary background information for water quality trading program development within the basin.

A water quality trading program within the Wabash River basin may take a couple of years for local and state stakeholders to develop. But it could provide small to medium wastewater facilities with economical and relevant compliance options to address future water quality regulations for the basin.

Program development can coincide with a state's efforts to develop new, more stringent water quality criteria. The process itself can be more affordable when stakeholders design the program to serve multiple entities—credit sellers, credit buyers and the public.

Water quality trading may prove an appropriate tool for improving water quality without breaking the bank. Its success depends on the forethought and planning of partners coming together to work toward the same water quality goals.

CTIC thanks project partners Agri Drain Corporation, Duke Energy, Indiana Association of Soil and Water Conservation Districts, Indiana Farm Bureau,  Indiana Soybean Alliance and Purdue University Extension.

Go to the project's web page to view the report. If you have questions about this effort please contact Christa Jones, CTIC project director, at 317-508-2450 or

TAGS: Extension
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