From 1999 through early 2001, a team representing diverse interests throughout the Bay watershed met to set broad guidelines for the development of nutrient trading programs in the region. As part of that effort, they adopted a set of “fundamental principles” to serve as a foundation for its guidelines and for all nutrient trading in the watershed. The principles are:

1. Trades must not produce water quality effects locally, downstream or Baywide that:

o violate water quality standards or criteria;
o do not protect designated uses; or
o adversely impact living resources and habitat.

2. Trading will be allowed only within each major Bay tributary (i.e., Susquehanna, Potomac, Rappahannock, York, James, Patuxent, Maryland Western Shore, Virginia Western Shore, Maryland Eastern Shore, Virginia Eastern Shore) and among all signatory states and non-signatory states if they adopt the appropriate allowance and are consistent with the Chesapeake Bay Program’s nutrient trading guidelines and state tributary strategies.

3. The nutrient trading program must be consistent with federal, state and local laws and regulations, be flexible enough to adapt to future changes in these laws and regulations and enable the participation of all potential sources as determined by the marketplace.

4. The nutrient trading program must be consistent with the Chesapeake Bay Program’s nutrient reduction goals and state tributary strategies.

5. Each trade must result in a net reduction in nutrient loadings or contribute to the maintenance of a tributary nutrient cap. The net reduction in loadings or the maintenance of a cap shall be calculated based upon the estimated tributary loadings at a point in time determined by the state.

6. Sources should implement nutrient reduction actions to achieve the 40 percent reduction goal, as well as the goals adopted for the tributaries south of the Potomac River, prior to pursuing a nutrient trading option.

7. Traders must be in substantial compliance with all local, state and federal environmental laws, regulations and programs.

8. The involvement of a diverse group of stakeholders must be sought in the design and implementation of state trading programs and related public education initiatives.

The entire document, “Chesapeake Bay Program Nutrient Trading Fundamental Principles and Guidelines,” is available on the Bay Program’s web site: