September 30, 2012

IN AN AVERAGE year, more than 250 million pounds of nitrogen and nearly 20 million pounds of phosphorous enter the Chesapeake Bay. In a year with a lot of rain, such as 2011, the totals increase. These nutrients, which flow with other sediment from farms, storm drains, water treatment plants and other sources, encourage algae growth, sap the bay’s oxygen and suffocate its sea life, including its famous crabs. This is the state of affairs after decades of one official after another promising better.

Now, with the Environmental Protection Agency (EPA) supervising the cleanup, four of the states in the bay’s watershed, including Maryland and Virginia, are trying something with promise: pollution trading. But, in advance of a review this fall, the move is splitting environmentalists.

Pollution trading takes advantage of the fact that it is easier to cut pollution in some places than in others. A farmer who can cheaply cut his runoff beyond what regulators require could be awarded credits and sell those to a nearby water treatment plant that would have to install very expensive equipment to meet its required cuts in pollution. The farmer makes money, the plant saves money and the EPA’s pollution cap is met efficiently. A May study from the Chesapeake Bay Commission, which represents the general assemblies of Maryland, Virginia and Pennsylvania, estimated that such a program applied across the bay’s watershed could reduce cleanup costs by as much as 36 percent — if properly executed.

Skeptics say that’s a big “if.” It will be difficult to trust that pollution reductions recorded on paper reflect real-world cuts. The amount of pollution a facility actually reduces can vary depending on things such as rainfall and the consistency with which anti-pollution measures are applied, but the awarding of credits might not. If state monitors haven’t been able to adequately police pollution levels before now, will they be able to do so in a trading system? Opponents also argue that, even if trading reduces total pollution across the watershed, it might concentrate it in certain places where pollution mitigation is relatively expensive, posing health and environmental problems for particular localities.

One answer to the critics is that all the transactions that occur under the trading program are subject to EPA approval, and the agency can reject any that would unreasonably foul local waters. Another is that trading could save many tens of millions of dollars a year. If a slice of that goes to monitoring and verifying claimed reductions in pollution, the system would have more integrity, and everyone could still come out ahead.

The potential of a trading system to reduce pollution and save money is too great for state governments to ignore. More traditional anti-pollution measures haven’t worked. All the more reason to try a strategy that could be cheaper and more popular — and, therefore, more politically sustainable.