Someday, a farmer may scoff at the idea of taking government money to tackle nutrient runoff from his fields.
Instead, he may take a swath of streamside land out of production and plant trees — not because he’s paid to do it by a government program, but because he can turn a profit.
He’ll be able to add up the pounds of nutrients that he kept out of the stream and sell those “credits” to the local wastewater treatment plant which has to slash discharges to comply with its permit.
He’ll tally up the carbon dioxide the trees pull out of the air and sell those credits to a power plant which has to offset carbon released by burning fossil fuels.
And if he wisely created some wetlands as part of the project, he’ll be able to sell those credits to the highway department or someone else who has to make up for the wetlands destroyed as part of a project.
This is a concept called “multi-credit trading” in which trades are based not only upon pollution credits, but also ecosystem values that result from restoration projects within a watershed.
“The general idea is that if you can maximize the incentives for doing ecosystem restoration, you are going to get more ecosystem restoration done,” said Scott Van de Mark, of the organization, Enterprising Environmental Solutions Inc., an affiliate of the Pennsylvania Environmental Council. “Hopefully, if you can lay the groundwork for these kinds of trading credit programs, you are going to get more good work done.”
EESI is working to help develop a pilot program for nutrient trading in Pennsylvania’s Conestoga Watershed in Lancaster County. It recently won a grant from the EPA to explore the development of a multi-credit trading framework for the watershed as well.
In the near-term, Van de Mark acknowledged, payments for nutrient credits are the most likely types of trades to occur. But over time, it’s likely that markets will develop for other kinds of environmental services, especially carbon sequestration to offset greenhouse gas emissions.
But other types of compensation are possible, such as wetland creation credits or — in Lancaster County — the creation of habitat for the threatened bog turtle.
Scientists have estimated that the nation’s forests, grasslands, oceans, wetlands and other ecosystems provide services worth roughly $33 trillion, covering everything from the creation of clean air and water to essential functions such as pollination and decomposition. As price tags are attached to services, it’s possible more markets will crop up.
By providing multiple benefits, landowners could theoretically maximize their payments while maximizing local ecosystem benefits.
While much remains theoretical, Van de Mark said the Conestoga project will try to identify alternate credits that may be created by planting trees or other restoration actions. It will also develop a registry of those activities. “The concept is definitely ahead of the policy,” Van de Mark said. “It is putting the cart before the horse. But why not do so?”
Dennis King, an economist with the University of Maryland Center for Environmental Science who has worked on conceptual multi-credit trades in other regions, said such efforts ultimately may entice more landowners to participate in conservation and restoration programs.
In some places, he said, it may turn out to be more profitable for farmers to plant trees than crops, although he cautioned that this could pose a threat to the agricultural economy in some areas.
“You wouldn’t do it for any one thing, but if you can get a bunch of different people to give you money for different environmental services, it makes sense,” King said. “Even though some of these environmental markets don’t exist right now, their future may be more reliable than the future of some existing crop subsidies.”