A scientific advisory panel has some words of advice for states speeding to develop nutrient trading policies intended to shave the multibillion dollar cost of the Chesapeake cleanup effort through nutrient trading.

Go slow.

The Bay Program’s Scientific and Technical Advisory Committee, which includes researchers and economists, recently adopted a statement cautioning that programs being developed by the states, especially those involving so-called point-to-nonpoint trading, could actually increase the cleanup costs.

“If you end up launching this trading system too soon and it ends up being a real disaster, you kind of shut the door for the really good, well-designed trading down the road,” said Doug Lipton, an economist with Maryland Sea Grant College and vice-chair of STAC.

Nutrient trading programs allow those who have done more than they are required to achieve to “sell” the value of the excess nutrient control efforts to others who have failed to meet their requirements or face particularly high costs. The goal is to achieve needed water quality goals at lower costs, and possibly more rapidly.

Last fall, the Pennsylvania Department of Environmental Protection released a draft nutrient trading program which proved to be controversial, resulting in the comment period being extended. A revised version has yet to be released.

Earlier in the year, Virginia passed a law calling for the establishment of a trading program, but regulations to implement the law are still being developed.

In a December letter to the governors of the states, the science panel said that while a “well-designed” trading program could reduce costs, a poorly crafted program could actually increase costs to the public for nutrient reduction goals assigned to each major Bay tributary. States have written tributary strategies for each river outlining the actions needed to reach those goals.

The letter said states should make clear that trading among wastewater treatment plants, known as point-to-point trading, should only be done with the understanding that all facilities will need to implement enhanced nutrient removal technologies in the near future. Trading programs should not be viewed as a substitute for upgrading, the group wrote.

“Future growth in the watershed will require these improvements to remain under the nutrient loading caps required for Bay restoration,” the letter said. “In the interim, nutrient trading may facilitate strategic movement toward that goal, but it cannot become a substitute for accomplishing enhanced nutrient removal.”

More controversial is point-to-nonpoint trades, in which point sources would pay farmers or other sources of nutrients to take actions that reduce runoff from the land.

The letter said such trades should not be allowed until nonpoint sources have achieved all of the nutrient control actions called for in tributary strategies.

Otherwise, the group wrote, “cheap and easy Best Management Practices for nonpoint sources will be sold to point source operators to account for the latter’s required reductions. This leaves the public to pick up the costs of implementing the more difficult and expensive nonpoint options necessary to meet commitments for the agreed-to reductions in nonpoint loads.”

Further, the letter said, point-to-nonpoint trading makes the assumption that there will be excess potential nutrient reductions beyond those planned in tributary strategies. “This is, at best, a highly controversial assumption,” the committee wrote.

Many are skeptical that a trading programs can effectively reduce water pollution, and Lipton said that if the states proceed with poorly crafted programs, it could move trading backward—not forward.

“I think we can get there,” Lipton said. “I am very much pro-trading in a very wide open way, once we define the rules and take into account all these extraneous issues that are out there. I think you can design a system that will work and achieve great efficiencies.”