Showing posts with label nutrient management plans. Show all posts
Showing posts with label nutrient management plans. Show all posts

Thursday, August 4, 2011

Nutrient Trading Markets, a Regulatory Pipe Dream

Under the Clean Water Act Virginia is required to meet the “waste load allocations” contained in the Chesapeake Bay TMDL. This can be accomplished though the Watershed Implementation Plans, WIP I and II, using a combination of agricultural BMPs, wastewater treatment plant upgrades, and improvements in stormwater management. If Virginia fails to meet these goals EPA will use the only regulatory sticks they have to force compliance. This could mean reducing Virginia’s federal funds for water quality or it might mean EPA directly permitting facilities in Virginia. This could mean more stringent requirements for wastewater treatment plants, MS4s, other stormwater permitting and confined feedlot operations.

So given the state of the federal budget (or lack there of) it seems a fairly certain that that Virginia will have to find a way not only to fund meeting the TMDL, but to get the local communities to embrace the WIPs, implementing the various strategies to reduce nutrient and sediment pollution. First, many existing wastewater treatment plants will have to be upgraded and any future population growth will require additional upgrades. These are major capital projects that will impact sewer fees within the communities served. We cannot meet the TMDL goal by only addressing wastewater treatment plants. Even if we could, there would still be a need for nutrient smoothing as expansions and technology improvements happened in spurts. Existing stormwater control systems will have to be upgraded in addition to having future development meet much more stringent current and future standards. Finally, agricultural nutrient management will have to be improved and widely implemented.

Much of the coastal area and northern Virginia is suburban. Curtailing future stormwater runoff by adopting low impact development, LID, techniques in new housing and in other development projects would, in many cases, not involve significant additional costs, but it will not achieve the goal of reducing the current nutrient and sediment pollution level as required under the TMDL. In addition, significant regulatory and business practices would have to change to implement LID. The changes would have to include zoning policies, current construction practices and building codes and any change is costly. The impervious surfaces associated with development like concrete sidewalks and asphalt roadways, and the buildings themselves create increased stormwater flow. Instead of soaking into the ground and recharging groundwater, rainwater runs across paved areas, collecting used motor oil, pesticides, fertilizers, and other pollutants. Under the TMDL mandate LID would not be enough to allow for any future construction in the Chesapeake Bay watershed.

Further nutrient reductions would be required to decrease the total nutrient load in the linear fashion dictated by the EPA. These nutrient pollution reductions could be achieved by requiring that new housing and other land development in the Chesapeake Bay watershed “offset” any new nutrient pollution load it generates by reducing the nutrient load elsewhere. These offsets could be provided directly or through the payment by developers of an “offset development fee.” The money from the fee could then be spent for upgrading stormwater control systems at older developments. This will have the effect of pushing up the cost of real estate in the Chesapeake Bay watershed by raising the cost of construction by the required fees. Existing housing and commercial building values would increase by the offset fees as well. Offset development fees are just one way to achieve this goal, but possibly the most painless. Another possible way to achieve the required reductions in nutrient and sediment pollution is to require all homeowners and building owners to implement improved stormwater control. The costs of these controls might not be reasonable in some cases, and lets face it, Virginia is struggling to get homeowners to appropriately maintain their alternative septic systems, adding stormwater control requirements does not seem likely to succeed.

Finally, it has been suggested that another way to achieve the TMDL goals is the regulators darling- the nutrient pollution trading model. Conceptually, pollution trading is appealing as a cost effective and flexible way to achieve and maintain water quality goals. However, I believe that it will prove impossible to create a pollution trading market place because of fatal flaws in the conceptual model. First, from a Bay-wide watershed perspective, the lowest-cost reduction efforts are not necessarily located within the watershed where a reduction is needed and the TMDL reductions do not appear to be tradeable on an intrastate basis. So the effective market for trading may be much too small to establish a market place. Uncertainty in reductions from agricultural sources cannot be entirely eliminated and must be implemented or maintained and funded every year, indefinitely, into the future. Monitoring and verification of BMPs are costly. http://www.dcr.virginia.gov/documents/lrNutrientTradingInTheStateOfVirginia.pdf

The regulators envision private entities that purchase large quantities of credits from nonpoint sources for the purpose of re-sale to potential buyers, such as regulated point sources. The regulators envision firms that are willing and able to accept and somehow manage the risks associated with trading fictional credits that have no other value, in an undeveloped and miniscule sized market place with an irregular demand based on economic and population growth and regulatory mandated decreases in the TMDL. In addition, the time lag inherent in BMP installation and verification will magnify the market instability and inefficiency by lagging market signaling.

The regulatory vision of a vibrant nutrient market cannot be achieved. In an economic sense, the regulations create an endowment- a regulatory endowed asset. New generation of nutrient pollution and sediment are prohibited while old activities are allowed (but must decrease over time). Unfortunately, unlike a really good asset, you can not value it, sell it or borrow against it and these are all requirements for property exchange. You cannot create a market without property rights that can be owned and sold. In addition, since the allowed activities and endowed asset are created by regulations they can vanish at regulatory whim.

There is no true economic value of a BMP (regulatory compliance not withstanding) so that installation cannot be financed and this would have to be a cash investment market that installs and maintains BMPs to have credits ready on demand. There are markets that function without credit, but the returns are venture capital returns (or illegal drug returns). In addition, BMPs do not pay “rent” and unlike bonds they cannot be warehoused, instead they are often seasonal and require expenditures and maintenance to continue to be viable. A series of nutrient markets can not succeed within the Chesapeake Bay watershed. The Commonwealth would be better served by regulators and local planning boards working together to effectively price and sell offsets to developers and wastewater treatment plants then ensure that they are installed and maintained if necessary.

Monday, June 13, 2011

Food, Water and the Environment

World wide there seems to be a lot of extreme weather lately. This may be variability in weather that has been widely reported, the result of changing climate, migrating magnetic fields or something else. Trends in weather are very difficult to see while they are happening because of the natural variability of weather. No matter what the cause, the growing population of the planet needs to survive each devastating storm, earth quake, tsunami, drought, and volcano that impacts our countries. As the population of the planet grows our resource reserves and flexibility to respond to crisis shrinks. Farmers need to withstand whatever weather and natural disasters come their way while continuing to increase the amount of food they produce to meet rising demand. As the population of the earth has grown and the “developing world” grows richer the demand for food has increased markedly. Richer nations add more dairy, meat and fruit to their diets which require more water and cultivated feed to produce than a subsistence diet of grain. Millions of people in Asia have added meat and dairy products to their diets, requiring considerable amounts of grain as feed and vast amounts of water. While this was going on, US energy policy resulted in the conversion of much of the American corn crop into ethanol.

Russia has been hit with the worst drought in a half century. Australia has suffered years of drought only to be hit by torrential flooding so that the lack of water has been replaced by too much water. India’s falling water table and water shortages have been well documented in the world news. Even U.S. grain forecasts have been reduced as much of the Mississippi plane has been flooded, and Texas is mired in a drought. On a bright note, California has received a reprieve from their multi-year drought, but the water deliveries to the farmers is at 75% of water allocations. Another location of unusual weather has been California where unseasonably cold weather over the past month has frozen the Sierra snowpack in place long after it would have normally melted. This is the deepest snow pack at the Donner Pass in June since 1946 when records were first kept. A summer heat wave could cause melting snow in the Sierra to cascade down from the mountains all at once, but the Department of Water Resource believes that the Yuba, Feather and Sacramento rivers would be able to handle higher flows if it became necessary to dump water out of the big reservoirs during a mass melt-off to prevent flooding. So the California agricultural crops should not be impacted.

With appropriate planning and reaction to weather disruptions, the United States has enough agricultural productive capacity and a large enough continent to survive most regional weather extremes. Not everyone does. The agricultural output of the earth needs to increase while the increasing population takes a larger share of the available fresh water and while reducing the environmental damage caused by the business of agriculture, by maintaining river flows, groundwater tables, and limiting chemical use and nutrient contamination. We cannot treat farming as if it were a dangerous polluter to be driven out of our geographic regions. Certainly, all farms should have nutrient management plans and utilize agricultural BMPs, it will take education, money and work to improve the environmental performance of agriculture. These costs loom large to the farmers, but ultimately will be borne by all of us.

In 1970 a third of the population in the developing world was undernourished. By the mid-1990s, the share had fallen below 20 percent, and the absolute number of hungry people dipped below 800 million for the first time in modern history. However, growth in food production fell behind population growth and increasing demand for meat and dairy. The World Bank estimates that the number of hungry people this year as 940 million. World hunger is back and appears likely to continue to grow. The increased demand for food must somehow be met on a planet where little new land is available for farming, where water supplies are tightening, where the temperature is believed to be rising or at least where the weather is erratic and where the food system is already showing serious signs of instability. There is a world food crisis building. Virginia has been blessed with a moderate climate and adequate rainfall, but agriculture is under assault by environmentalist popular opinion. Eliminating agriculture from the Chesapeake Bay Watershed is short sighted and quite frankly a really bad idea on so many levels. Nonetheless, farm practices and land management need to change and improve. The TMDLs required reduction in total nutrient load in the Chesapeake Bay Watershed is not just about maintaining the beauty of the Bay, it is about our water and our life.

Like all estuaries the Chesapeake Bay is an incredibly complex ecosystem that we are only beginning to understand. Estuaries are productive ecosystems and habitats. The Chesapeake Bay serves as a nursery ground for the fish and shellfish industry and protects the coast from storm surges and filters pollution. The estuary filters water that is carrying nutrients and contaminants from the surrounding watershed. The nutrients in proper balance bring fertility, but excess nutrient contamination to the Chesapeake Bay has caused degradation in the habitat. Excess nutrients and sediment from sewage treatment plants, farm fields and animal pastures, urban and suburban run off from roads and landscaping can cause eutrophication. As the ecosystem of estuaries declines, species die out, coastlines experience excessive erosion by wind, tidal action and ice. To restore the damaged portions of the Bay reductions in nutrient contamination will have to take place. Wastewater treatment plants, agricultural nutrient management plans and BMPs, stormwater managements and reductions in population and economic activities are the only sources of these reductions. Agriculture is generally considered the least cost method of reducing sediment, nitrogen and phosphorus. Implementing these changes will reportedly allow us to feed more people with the same land resources, bringing agriculture to the next level. We will carry this cost in either increased cost of food, or hidden in a nutrient trading program as an overall tax to economic activity. Nutrient contamination is about population head count, our waste, our food, our roadways, our landscaping.

Thursday, February 17, 2011

Dairy Farmers, Cattle Operations and Poultry Farms Grab Your Cost Share Money Before It’s Gone

The Commonwealth of Virginia has earmarked $3.4 million for new stream protection practices under the Virginia Watershed Implementation Plan (WIP) and the Chesapeake Bay Protection Act. This week the Virginia Department of Conservation and Recreation (DCR) has awarded $690,120 or 20% of that money to the soil and water conservation districts in Fauquier, Loudoun, and Prince William Counties to be used to provide technical assistance and cost share money for new livestock exclusion and new stream protection practices being implemented within the next four months. If you are interested in learning more about these funds and conservation practices contact Nicole Ethier,Conservation Specialist, Prince William Soil & Water Conservation District, (703)594-3621 or follow the links on the county names to their websites.

Over the past quarter century the excess nutrient contamination to the Chesapeake Bay has decreased, but the Bay’s waters remain seriously degraded. As a result, US EPA has taken control of the situation and has developed a new federally mandated total maximum daily load (TMDL) to restore the local waters. The TMDL allocates a pollution budget among the states which will decrease over time.

The final version of the Virginia Chesapeake Bay Watershed Implementation Plan to approved by the U.S. Environmental Protection Agency spells out how Virginia will attain the TMDL goals. There are local TMDLs as well as state TMDLs. As a show of good faith, the Governor of Virginia included $36.4 million new dollars in the state’s Water Quality Improvement Fund in his 2011 budget amendments. This $3.4 million money earmarked for new stream exclusion is money already available that is being "reprogramed."

Last fall the US Department of Agriculture released a draft of a report evaluating conservation practices in the Chesapeake Bay Watershed. The USDA report stated 81% of farms lacked comprehensive nutrient management plans and practices. The report found that on over 2 million acres of cropland within the six state Chesapeake Bay watershed, that conservation practices are not being used at all. According to the current version of the EPA watershed model (to be revised in 2011), cropland accounts for 25% of sediment in the bay, 32% of the nitrogen and 27.5% of the phosphorus while accounting for only 10% of the Chesapeake Bay watershed acreage.

For agricultural operations in Virginia (and other states) the revised WIP requires the implementation of resource management plans on most agricultural acres which may include: 35 foot grass or forest riparian buffers between cropland and perennial surface waters; stream exclusion of livestock; and implemented nutrient management plans. Though funds are limited, the Commonwealth will provide cost-share funding to implement these best practices through the soil and water conservation districts. The WIP calls for farms to implement "resource management plans" to reduce pollution but does not mandate what those plans should include and requires them only if adequate funding is available through the cost share programs. However, the TMDL has to be met and the best money spent could be to implement agricultural nutrient management plans. Thus, the first money available for compliance with the Virginia WIP is for the cost share program at the soil and water conservation districts.

Riparian buffers, nutrient management plans and stream exclusion have been shown to be very effective in reducing nutrient pollution. Researchers at Virginia Tech found that orchard grass filter strip 30 feet wide remove 84% of the sediment and soluble solids from surface runoff. Recent studies northeast of Richmond, VA demonstrated that forested riparian buffers could reduce concentrations of nitrate-nitrogen in runoff from croplands by 48%. While studies performed on the Maryland shore found that riparian buffers removed between 89% and 95% of the nitrogen from field run off. While riparian areas can be important sinks for phosphors, they are generally less effective in removing phosphorus than either sediment of nitrogen. (Parsons 1994, Cooper and Gilliam 1987).

In addition, protecting livestock from pollutant-contaminated waterways also leads to improved animal health, enabling local farmers to produce higher quality meats and poultry. According to the Department of Natural Resources, farmers report higher yields from animals grazing on lands where streams are protected from livestock “The best management practices promoted by conservation districts improve public and animal health and build(a) wealth,” said Jim Christian, Chairman of the Loudoun Soil and Water Conservation District. “Cost-share programs, tax credits, and contributions by participating landowners create a lucrative return on investment.” Many animal farms can operate well beyond the baseline level and will be able to sell nutrient credits under the nutrient exchange program to municipalities and others who are above the discharge baseline. Now is the time to call your soil and water conservation district and be proactive.