Maryland moves toward trading, as many watch warily
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When Larry Hogan bested Anthony Brown to become the third Republican governor of Maryland in half a century, environmentalists were concerned about who he might choose to lead the Maryland Department of the Environment. Many breathed a sigh of relief when Hogan appointed Ben Grumbles to the top job at MDE.
Grumbles, a career environmental regulator, had spent five years as assistant administrator for water at the EPA. Prior to that, Grumbles, an attorney, had a nearly two-decade career on Capitol Hill and had also served as Arizona’s top environmental official.
In Grumbles, the environmental community was getting a secretary who understood the complexity of regulation, knew the law, and could work with a Republican Administration to get the money and support needed to enforce the law.
But one issue troubled some in the environmental community. They suspected Grumbles was in favor of nutrient trading and would soon push a policy that outlined how Maryland would enter into such a market.
They had reason to believe that. Grumbles, in his work for the U.S. Water Alliance, spoke positively about nutrient trading at several conferences nationwide. He has frequently discussed it in his job as secretary. A couple of weeks ago, at a University of Maryland Agriculture Law Clinic conference, Grumbles outlined his “Top 10 Reasons to Trade” with his signature good humor. (Reason Number 10: It’s Legal Enough.) Grumbles recently unveiled the department’s nutrient trading plan, a three-pager that outlines what trading is, but is short on specifics about how it will work in Maryland.
We will likely learn more, soon. The public is invited to the Maryland Nutrient Trading Symposium at Chesapeake College in Wye Mills on Jan. 8. The state’s departments of environment and agriculture, along with the Chesapeake Bay Foundation and the Maryland Grain Producers, are sponsoring it. (The two groups also sponsored the well-attended Phosphorus Symposium. You can register here.
Trading is a difficult topic, full of nuances. Many free-market advocates see it as a cost-effective solution to reducing pollution without more regulation. Many environmentalists support it, with caveats. The most important is that a trading program needs a verification and auditing program, so that one can be sure the trade accomplishes the reductions it promises. (One veteran environmental lawyer, who once opposed trading, told me that he was for it now, simply because he was “out of ideas” on how to reduce pollution from non-point sources, such as stormwater and agriculture. Nothing else has worked, he said. Maybe we should try it.)
At its core, trading means that polluters can “pay” to pollute by offsetting their pollution with credits they buy from others who are polluting less than they are allowed to under requirements. So, for example, a Baltimore power plant that cannot meet its emissions permits without a significant investment can instead invest a sum in, say, buffer strips on an Eastern Shore farm. It may also be that the buffer strip, or the bioreactor, or whatever the practice is, actually can reduce more pollution more cheaply than the power plant can following its permit to the letter.
Critics say that’s the problem. Such a trade is excellent news for the Eastern Shore residents who get to look at a new stand of trees and cleaner water. It’s not quite as rosy for the Baltimore children who have to breathe more dirty air.
“My objections to trading are practical, legal and moral,” said Fred Tutman, the Patuxent Riverkeeper.
On the practical side, Tutman said, trading doesn’t reduce pollution, but just moves it around. On the legal, he said, it gives polluters permission to essentially ignore the Clean Water Act — not to mention privatizing a lot of the records around the trades because they would be between private entities. And on the moral, he said, you can’t trade what you don’t own — and no one owns the right to the air and water or the right to pollute it.
Tutman acknowledges that the discussion has moved away from the question of “should we trade?” to “how can we make the trading program better?” He calls that development “very sad.”
“It stands to reason that a clean-up program driven by market incentives will confer the best values to those areas with the best and most favorable trading/market conditions,” he said. “It’s easy. Wealthy and relatively clean areas can generate the most credits (rich get richer). Poor, disenfranchised and environmental unwholesome places is exactly where the best market is for trades (the poor get more pollution). Use your imagination as to who gets the credits and who gets the trades (goldmine versus the shaft).”
Though many places have been talking about trading, and Grumbles has been touting the idea for years, it is hard to find an example of any place with a successful, robust water quality trading program, especially between point and nonpoint sources.
Rena Steinzor, a professor at the University of Maryland School of law who has known Grumbles for decades, said the new secretary is “a very bright man, an environmental professional…but I think he’s wrong on this one. I really do.”
Steinzor said she doesn’t oppose trading, but thinks Maryland is rushing into it without the proper oversight. Some environmentalists have voiced the same concerns about the Phosphorus Management Tool working group, which has included few environmentalists.
“I am very concerned that you gather a group of hand-picked people and you get behind closed doors and debate it,” she said. “We’re going to start trading in April, but we don’t know what the rules are going to be…. He needs to put out a proposal and let every member of the public have an opportunity to comment on it… It has to be done right, and I don’t have much confidence now that we’re going to be rigorous.”
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