Evaluation of Environmental Outcomes of Nonpoint Source Water Quality Trading

Abstract:

Nonpoint source water quality trading (NPS WQT) has been lauded as an innovative approach to reducing the cost of improving water quality, though the environmental outcomes of these programs have rarely been evaluated. We analyze the outcomes of a fast-growing NPS WQT market in Virginia. In this program, water quality credits are most frequently created through converting agricultural land to forest, and these credits are purchased by construction entities to achieve compliance with stormwater permits. We parameterize the landscape-scale patterns and clustering tendency for 608 of these NPS WQT transactions. We also simulate NPS WQT impacts to catchment-scale nutrient cycling using the Regional Hydro-Ecological Simulation System (RHESSys). Our results test the assumptions about expected nutrient loading used in NPS WQT regulations, provide insight into the successes and risks of this NPS WQT policy structure, and provide a basis for WQT policy recommendations.