Making Water Quality Markets Work - Little River Nutrient Bank Case Study

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Glickauf, Steven
Siragusa, Kelly
Carroll, G. Denise
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Major fish kills in the estuaries of North Carolina prompted state officials to enact legislation regulating nutrient runoff from hog farms, other types of agriculture, and urban runoff to help improve water quality in their coastal basins (Maloney et al. 2000). In 1997 the North Carolina Environmental Management Commission established the Neuse buffer and nutrient rules, which, as part of a larger regulatory framework, established mitigation requirements for riparian buffer and nutrient impacts. Wildlands developed the 30-acre Little River Farm Mitigation Bank to offset authorized riparian buffer and nutrient impacts in the Neuse basin. The site was previously in intensive agricultural management with no forested riparian buffers on the streams and runoff conveyances around the property. Restoration of the buffers and permanent protection of the site generated approximately 50,000 Nitrogen credits (based on the lbs of Nitrogen removed over 30 years) over a five year release schedule that can be used to offset both point source and non-point source impacts in the basin. Developers must weigh the on-site development and land costs of reducing nutrients at the point of impact with that of purchasing nutrient credits from a variable market nutrient bank. Point source impacts must weigh reducing nutrient loading with improved efficiency, point source to point source trading scenarios, or purchasing nutrient credits from an approved bank. Making nutrient trading programs work both ecologically and economically requires a regulatory framework to provide market demand and assurances that management practices are providing the needed offsets. INTRODUCTION Nutrient trading is currently being conducted under the auspices of several state programs, including the North Carolina Neuse River Nutrient Sensitive Waters Strategy. Wildlands has established a riparian buffer and nutrient bank, Little River Farm, to provide nutrient offsets under the North Carolina program. Little River Farm, as a case study, highlights some of the policy and market considerations crucial to making water quality markets work. Furthermore, other state and regional programs reveal important considerations for the use of offsets as a water quality management strategy.
Sponsored by: Georgia Environmental Protection Division U.S. Geological Survey, Georgia Water Science Center U.S. Department of Agriculture, Natural Resources Conservation Service Georgia Institute of Technology, Georgia Water Resources Institute The University of Georgia, Water Resources Faculty
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