Pollution Trading in the Chesapeake Bay

The Chesapeake Bay region states are trying to make the Bay cleanup easier by encouraging polluters to trade with each other. In the abstract, what is called “nutrient trading” might be a plausible strategy. Polluters who cannot easily reduce their pollution loads can buy “credits,” or pollution reduction equivalents, from other polluters who have ways of making relatively cheap pollution reductions. In the real world, though, pollution trading is complicated, and there are many pitfalls.

This paper by EIP Senior Attorney Abel Russ explores pollution trading in Maryland, Pennsylvania and Virginia, and how trading impacts the regional Bay cleanup plan, called the Bay “Total Maximum Daily Load” or TMDL. The paper explains how poorly executed trading programs can be counterproductive, slowing progress toward overall cleanup targets, and even causing net increases in pollution.