Trading in Nutrient Markets

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Trading in Nutrient Markets

  1. 1. Trading in Nutrient Markets Policy, Administration, and Market Mechanics Brent L. Fults – Founder 1999 CBNLT (Chesapeake Bay Nutrient Land Trust) & ESS (EarthSource Solutions) July 2013
  2. 2. POLICY or MARKET ?  CLEAN WATER IN THE BAY…  CBNLT entrenched itself as a stakeholder in 2008. Participating in 2009, 2010, 2011 & 2012 Legislation.  CBNLT follows the “First Step” model developed as a Bay Cleanup Strategy  Covering VIRGINIA Bay watersheds: James, York Rappahannock, potomac  Policy created a market, markets created legislation Chesapeake Bay Cleanup NOW FIRST STEP M ODEL CBNLT MARKETS
  3. 3. Nutrient Banking
  4. 4. Market Complexity  Complexity in the navigation and coordination of public programs, agricultural landowners, regulatory agencies, permit process, financial assurance placement, credit generation activities  Timeline expectations of credit providers, landowners and regulatory community  Policy – Education of all sectors has created interest and concerns by the “just say no” groups.  DEQ – Agency support is broad, permit opportunities  Locality opposition to trading: It’s the Law folks.  WHO WILL STEP FORWARD: DEQ or Stakeholders and resolve the stand off.  This is a Big Question
  5. 5. Market Challenges  Efficiency of Credits  Land use variations  Goals of credit program / landowners  Market Demand (nonpoint) VA VSMP  Allowable triggers resolved with pepertual answers  100% privately funded – NO GRANTS  Water quality improvements are REAL
  6. 6. Future of Nutrient Credit Market  Credits used for VA DEQ VSMP: Gas station, parking lot, condos, failing BMP, and compliance actions thru enforcement  Users – Private / VDOT/ Public MS4 programs soon to create a buy down of point and non point credits  Policy / EPA – Federal support in Virginia  Policy/ DEQ- State support incredible  Changing Certification regulations in 2014: Get your bank soon, its real complicated.  Growing demands: VSMP, VDOT, MS4 buydown, failing BMP  Improvements to Bay are working. Trades are occuring. 12 facilities, 4 watershed, and 40 trades in last 9 months.
  7. 7. Nonpoint VSMP is the Market: 9860 +- Active permits.

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