Human activities within the 2,900 square kilometer Lake Simcoe watershed, located 50 km north of Toronto, Canada, are affecting the health and quality of the lake and its tributaries.  The primary water quality concern is nutrient enrichment, particularly due to excessive phosphorus loading.  As part of the Province of Ontario's establishment of a protection plan for the Lake, the Ministry of Environment has commissioned a feasibility study on WQT to determine if a market-based program could provide another tool for funding nutrient reductions in the watershed.

In partnership with XCG Consultants LTD., K&A is currently completing a feasibility study of WQT as a practical and effective option for improving water quality and reducing phosphorus loading to Lake Simcoe.  The study involves a review of pollutant trading programs in leading jurisdictions, including existing programs in Canada; identification of options for the structure and delivery of WQT programs; and, an examination of the environmental, economic, and social implications of WQT in the Lake Simcoe watershed.  Several stakeholders meetings have been convened during the course of the study to solicit input and general feedback on the potential for WQT in the Lake Simcoe watershed.

K&A has partnered with the Ohio River Trading Project.  The Ohio River Trading Project is a first-of-a-kind interstate nutrient trading program which represents a comprehensive approach to designing and developing credit markets for nitrogen and phosphorus discharges.  The intent of this trading program is to allow exchanges of water quality credits for nitrogen and phosphorus aimed at protecting and improving watersheds at lower overall costs in the Ohio River Basin.  The Electric Power Research Institute is coordinating this project with support from power companies; wastewater treatment facilities; agriculture; federal, state and local agencies; and other industry organizations. 

More information can be found on the project website, www.epri.com/ohiorivertrading.

Sauk River Ecosystem Services Market

The Sauk River Watershed District and Stearns County SWCD are collaborating with American Farmland Trust and K&A to develop the Conservation Marketplace of Minnesota. The program will utilize public and private market-based incentive opportunities that provide farmers with value added payments for BMPs. The market-based incentives, or ecosystem service payments, are base on a commodity that is developed on an agreed upon “ecosystem value” (such as a pound of phosphorus loading reduced in a water resource). Support and funding for the development of this program is provided by the Bush Foundation and a Conservation Innovation Grant from the US Department of Agriculture's Natural Resources Conservation Service. The project is using funds to network with existing public and private entities established with the agricultural community to leverage their networks in marketing and certifying the program.
Project Summary | Project Brochure

Nutrient Credit Trading in Pennsylvania

As part of a Growing Greener Grant with the Pennsylvania Department of Environmental Protection(DEP), K&A and American Farmland Trust are working to develop a nutrient credit trading component to their existing "Planned Nitrogen Reduction" Program. Currently the program encourages farmers to commit to applying 10-15% less nitrogen to fields than is recommended under current university agronomic rates. Farmers are given a guarantee payment for crop yield losses due to the reduction. To evaluate project sustainability, AFT has contracted K&A to evaluate whether nutrient credit trading can replace the guarantee payments that are currently funded through grants. K&A will also be conducting a quantitative analysis utilizing GIS to optimize areas where credit potential is highest and determine the potential and optimum goal for nitrogen reductions from the program at scale.

Maumee River Water Quality Trading Feasibility

With funding from the Joyce Foundation, K&A was commissioned by American Farmland Trust to perform an environmental market analysis in the Maumee River basin. The analysis was part of a larger effort to identify innovative funding sources for Great Lakes restoration projects.  This report highlights potential markets, provides a preliminary trading framework, and identified potential "buyers" and "sellers" of several environmental service credits within the basin. K&A evaluated current environmental conditions in the basin in order to gain a better understanding of how the watershed could benefit from the use of environmental market-based applications.  Nine potential market-based approaches were evaluated in the report. Relevant environmental issues, drivers, supply/ demand, and potential funding avenues were explored.
Final Report | Project Summary

Phosphorus Credit Trading in the Kalamazoo River

In 2004, the Kalamazoo River watershed was one of 14 watersheds to receive an US EPA Targeted Watershed Grant. The Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (Gun Lake Tribe) nominated the watershed and is leading this 5-year initiative on behalf of a watershed-wide group addressing eutrophication issues through a phosphorus TMDL.

K&A has partnered with the Gun Lake Tribe, Allegan Conservation District and Calhoun Conservation District to implement agricultural and urban BMPs throughout the watershed.  In addition to these BMPs, the project will provide the watershed with a online water quality trading tool and framework for an online marketplace.  The tool will also provide a tracking tool for phosphorus reductions in the Lake Allegan/Kalamazoo River phosphorus TMDL area.
Website

Lake Tahoe Ecosystem Services Market

K&A is working with Environmental Incentives, LLC in Lake Tahoe to develop a water quality trading framework for fine particles with the goal of preserving Lake Tahoe's clarity. This unique project, focused on pollutants from urban stormwater runoff, aims at addressing complex fate and transport issues, quantification of non-point source stormwater loads and costs, as well as developing a credit tracking tool.
Project Summary

Economic Analysis of Water Quality Trading in the Great Miami River Watershed

K&A was commissioned by the Miami Conservancy District, located in the Great Miami River watershed in Ohio to conducted an analysis of biophysical and economic aspects of the watershed from 2004-05 to assess water quality trading opportunities in the 3,800 square mile watershed. To determine the potential viability of such a program, the analysis focused on:

• Conducting a nonpoint source modeling analysis using SWAT to assess agricultural credit supply
• Assessing and comparing the costs of point source load reductions via traditional in-plant facility upgrades to the cost of comparable load reductions by agriculture
• Analyzing cost savings and load reductions achievable through trading