Sugar Creek Nutrient Trading Program

The Sugar Creek Headwaters Project has established something new in Ohio. Beginning in 2005, a nutrient trading program was instituted in the Sugar Creek Watershed, located in east-central Ohio. The purpose of the program is to reduce phosphorous pollution released from industrial and agricultural sources in the watershed.

The Sugar Creek Headwaters Project is working with Alpine Cheese, of Winesburg, OH, to reduce the level of phosphorous released from its plant. The TDML established for Sugar Creek for phosphorous is 1 mg/liter of water, but prior to the permit trading program, Alpine Cheese was releasing 225 mg/liter of water. Under the provisions of the permit program, Alpine will reduce emissions to 10mg/liter (or a maximum of 1.7 kg/day). They will also pay over $800,000 over 5 years to the Holmes County Soil and Water Conservation District, the Ohio Agricultural Research and Development Center and local farmers to implement conservation measures that will further reduce phosphorous levels and counteract the emissions from Alpine Cheese. Permit trading is expected to help overall water quality because for every pound of phosphorous saved by Alpine Cheese, local farmers reduce six more pounds through conservation measures.

Nutrient trading permits are new to Ohio, although the idea to create tradeable pollution permits has been around since the 1960’s. The idea behind the permit system is to provide financial incentives for industries (beyond those provided by the government) to reduce pollution emissions through innovations in technology or manufacturing methods. Those companies that can reduce their emissions to under the state or federally mandated levels would generate pollution credits that could be kept or sold to companies that had not reduced their emission levels to meet legal requirements. Benefits can include the preservation of jobs, increased efficiency and lower operating costs, reduced fines, and overall emission reductions in the air or watershed.

Ohio is still drafting rules governing these programs, but the Sugar Creek Headwaters Program, along with a project in the Great Miami River Basin, is moving ahead and establishing working strategies. Are nutrient or pollution permit trading programs right for your watershed? Ohio State University Extension released a report in Spring 2006 addressing this question (See The Potential for Water Quality Trading in Ohio link following this article). According to the authors, programs can be created to address point source or non-point source pollution. The program should be tailored to meet the needs of each watershed and the more participants you have, the better the results will be. Sugar Creek, for example, has 20 permit holders in a mostly rural area. You can follow the links below for more information, but a few important points can help you decide if this is a good idea for your watershed. First, in order for the program to be successful, there must be significant cost differences among emitters for reducing pollution. Second, if there are substantial pollution reductions to be made, or if toxic materials are involved, bans or other methods would be more effective.

More information can be found through these links:

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Sugar Creek Nutrient Trading Program