Nutrient trading is often seen as a way to control Bay cleanup costs that are expected to reach into the billions of dollars in coming years, but a recent report warns those savings could come at the expense of minority and low-income communities.

Those populations might see some of their potential benefits from Bay cleanup efforts delayed, or simply traded away, if scarce funds are used to pay for cheaper nutrient reduction elsewhere, according to a report released this summer from the Center for Progressive Reform, a nonprofit organization.

The report said such concerns about "environmental justice" have received scant attention as Pennsylvania, Virginia and Maryland develop trading programs to help meet goals set in the Chesapeake Bay Total Maximum Daily Load, or pollution diet. The TMDL sets enforceable caps on the amount of nutrients and sediment that can enter the Bay.

"A close look at nutrient trading and environmental justice in the Bay reveals that, unless carefully designed and monitored, trading may disproportionately harm low-income and minority communities," the report said. "Bay states must ensure that low-income and minority communities are protected from any harm that trading programs may cause."

The theory behind trading is that a source of nutrient pollution, such as a treatment plant or stormwater system, could achieve its nutrient reduction obligation by purchasing "credits" from another source that can achieve excess pollution reductions more cheaply. The credits might come from a wastewater treatment plant that is reducing more pollution than is required of it, or by paying a farmer to install nutrient controls such as stream buffers that go beyond what is minimally required of him.

"Nutrient trading offers a potentially economically efficient and environmentally effective tool that merits consideration," the report said. "However, it is imperative that EPA and Bay states avoid creating new injustices while attempting to reduce nutrient pollution."

Such injustices could occur if a wastewater treatment plant or stormwater system increased discharges into urban waterways, or delayed making reductions, through the purchase of credits that reduced pollution elsewhere, the report observed.

In that situation, urban areas are using their money to clean other waterways rather than taking actions that would improve their own streams, which are often among the most degraded in the region, said Rena Steinzor, a professor at the University of Maryland School of Law who has worked on both air and water trading issues and was lead author of the paper.

"These are waters that are already in bad shape," Steinzor said. "We thought it was important to open up this side of the debate. We are not anti-trading, but we think it can be executed very badly."

If nutrient reduction efforts are met through trading, the report said, local waterways will not realize other benefits related to controlling stormwater, such as reductions in pathogens, antibiotics, toxins and other pollutants. Many of those have human health impacts, the report said, especially for people who consume fish from those areas.

Further, some of the actions that could address problems such as stormwater control, including re-vegetating neighborhoods and adding green space, also provide important secondary benefits for urban neighborhoods. The report said minority and low-income communities should be able to share in those benefits.

Environmental justice issues get little attention in trading programs, the report said. Only the Pennsylvania strategy mentions it, and little effort has been made by states to include representation of disadvantaged communities in plan development.

The report suggested actions that could reduce impacts on urban waterways. For instance, it said credit generators and credit buyers should be located in close proximity to one another to ensure that some local benefits are realized in trades. It also suggested requiring that nutrient reductions that generate tradable credits be achieved from upstream sources, to ensure that downstream pollution does not increase. Right now, only Virginia's program has such a restriction, the report noted.

Such restrictions could reduce the economic benefit of trading. A report on the economic benefits of trading completed for the Chesapeake Bay Commission, a legislative advisory panel, found that some of the greatest cost savings offered by trading came from allowing urban areas to achieve their stormwater goals by trading with agricultural sources. Allowing out-of-basin trades tended to make the potential savings even greater.

Yet that report also cautioned that ensuring protection of local water quality is "one of the most fundamental concerns that arises as a result of nutrient trading." It said that state programs needed to ensure that any redistribution of nutrient loads protect local water quality.

EPA officials note that discharges that increase pollution into waterways already listed as impaired are not allowed under the Clean Water Act, even through trading.

Nick DiPasquale, director of the EPA's Chesapeake Bay Program Office, said most trades will involve stormwater or wastewater treatment facilities with permits that are subject to EPA review. The agency is developing a checklist of issues to be reviewed if a permit relies on a trade to meet discharge limits, including potential local impacts, he said.

"This concern about local water quality impacts has been raised by numerous groups," he said. "It is something that we've built into our work plan. It is something that we're planning on taking very seriously."

But DiPasquale said the concern that urban areas would opt to achieve their goals through trading may be overstated. Instead, he expects many cities to adopt innovative and lower cost ways of meeting stormwater goals that rely on green infrastructure techniques that reduce runoff by promoting infiltration and the short-term storage of rain water on the landscape, as is happening in places like Lancaster, PA.

That approach produces local benefits, and keeps responsibility for meeting nutrient reductions local. Under trading, an entity that purchases credits is typically held responsible if the place generating reductions falls short of its obligation.

"Permitees are more likely to go for things that they have direct control over," he said. "And in some cases agricultural (best management practices) won't give them the level of comfort that they would have by doing something locally — and addressing their problems locally."

The report, "Fairness in the Bay: Environmental Justice and Nutrient Trading," is available at the Center for Progressive Reform's website,