The last fertilizer trading market, at the Chicago Climate Exchange, died and closed due to nobody wanting to buy the brand of fertilizer they were selling. Besides that example, I have to think this might not fare any better, simply because farmers really don’t want yet another intrusion into their lives by the Maryland Department of the Environment.
From the University of Maryland:
Rewarding Eco-Friendly Farmers Can Help Combat Climate Change
UMD Study Advises State on Creation of ‘Nutrient Trading Market’
COLLEGE PARK, Md. – Financially rewarding farmers for using the best fertilizer management practices can simultaneously benefit water quality and help combat climate change, finds a new study by the University of Maryland’s Center for Integrative Environmental Research (CIER).
The researchers conclude that setting up a “trading market,” where farmers earn financial incentives for investing in eco-friendly techniques, would result in a double environmental benefit – reducing fertilizer run-off destined for the Chesapeake Bay, while at the same time capturing carbon dioxide headed for the atmosphere.
The study, Multiple Ecosystem Markets in Maryland, advises the state’s Department of the Environment how to set up a “nutrient trading market,” as proposed in the 2008 state climate action plan. This nutrient trading would operate alongside markets that sell carbon dioxide credits. The CIER study examines the effects of operating both markets simultaneously.
In these markets, farmers who reduce pollutants below a set level would earn credits. They would sell these credits to other operators, such as sewage and water treatment facilities or power plants that have difficulty meeting environmental targets. No direct government subsidies would be involved.
In these markets, farmers who reduce pollutants below a set level would earn credits. They would sell these credits to other operators, such as sewage and water treatment facilities or power plants that have difficulty meeting environmental targets. No direct government subsidies would be involved.
“Everybody can and should win from these markets,” says principal investigator Matthias Ruth, who directs the University of Maryland’s Center for Integrative Environmental Research. “This could represent an extra revenue stream for farmers, as well as an incentive to use the best nutrient practices that can help clean up the Bay and fight climate change. Taking these conservation steps costs the farmers money, and at the very least a reimbursement for their investment is well-deserved.”
Maryland is one of a handful of states considering whether to create these multiple markets. One key question for policy-makers is whether farmers who achieve reductions in watershed pollution while also capturing CO2 should be able to sell credits in both markets and, in effect, get dual payments for single action.
The study does not recommend a particular answer to this question, but offers policy-makers a series of scenarios – estimates of how the systems will work if farmers can participate in only one or both markets, and whether there should be thresholds before they can take part.
Another key question is whether sufficient carbon dioxide will be captured and traded to justify creation of the market. To determine this, CIER and the World Resources Institute developed a dynamic systems model and projected the likely volumes of carbon dioxide involved.
SPECIFIC FINDINGS
- A “nutrient trading market” would lead to the capture of between one and two million metric tons of carbon dioxide each year by 2030, depending on how the market is set up;
- In total, captured carbon would range from 12.5 to 21.6 million metric tons by 2030;
- Only a portion of captured carbon would be traded in markets, depending on the stringency of the market rules; most likely, between seven and 23 percent of captured carbon would be sold;
- Nutrient markets would generate more revenue for farmers than carbon dioxide markets. If rules limited participation to only one of these, carbon prices would have to be five to eight times higher than nutrient prices for farmers to forgo trading in nutrients and opt instead for carbon.
“As a practical matter, the carbon market will usually offer less financial reward than nutrient trading, because there isn’t that much CO2 captured in this way,” explains report co-author Rebecca Gasper, a CIER researcher. “To earn one water credit, a farmer must eliminate one pound of run-off pollutant. To earn one carbon credit, involves a reduction of one metric ton of CO2. It’s a lot easier for a power plant operator to achieve that than a farmer.”
DUAL BENEFITS
As an example of a best management practice providing the dual environmental benefit, the report points to conservation buffers – putting a green swath of trees or other plants between farm and stream to absorb run-off and filter out pollutants. But, this green buffer can also help capture carbon dioxide, and so help the state meet its CO2 reduction goals. Other practices likely to generate dual environmental benefits include conservation tillage, cover crops and wetland restoration.
DUAL MARKETS?
The nutrient trading market would work similarly to the one set-up to reduce carbon emissions under RGGI, the multi-state Regional Greenhouse Gas Initiative that Maryland has joined.
The fulcrum of the nutrient market is a target level called the Total Maximum Daily Load. It’s the maximum amount of phosphorous and nitrogen that Maryland farmers can allow to run into streams. The U.S. EPA is expected to finalize this target in December.
If a farmer uses more eco-friendly methods and produces lower levels of pollutants that fall below this target, these can be sold as credits to someone else who is running above the target level. The trade would take place in the nutrient market.
“Setting up this system will require a delicate hand,” says Ruth. “Farmers taking part will face a steep learning curve, and if the system’s too complicated or burdensome, they’ll likely not take advantage of it.”
“In carefully thinking through the options for how to operate and potentially combine nutrient and carbon markets, Maryland is moving out in front as a national leader,” Gasper says. “Linking multiple markets is appealing because of its potential for preserving and restoring ecosystems – particularly if other Bay states decided to participate or set up their own programs.”
FULL REPORT
A copy of the full report is available online:
http://www.cier.umd.edu/documents/Multiple_Ecosystem_Markets_MD.pdf
FUNDING
The Maryland Department of the Environment funded the study.
The Center for Integrative Environmental Research (CIER) at the University of Maryland has served as the state’s scientific advisor on a series of environmental-economic policy analyses. CIER addresses complex environmental challenges through research that explores the dynamic interactions among environmental, economic and social forces and stimulates active dialogue with stakeholders, researchers and decision makers.
The University of Maryland, the region’s largest public research university, provides Maryland with education and research services statewide, supporting its economic and social well-being.
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There is a consistent theme that people should be left to manage their own resources. I have never seen figures on employment in the USA that list the number of people paid to regulate the producers.
There should be an intensive name and shame campaign to cut off the air supply of these middlemen who are paid to take money from productive people and hand it to the government, additional to regular taxation. They are contributing far less to the economy than producers like farmers. It’s an employment sector that could well be eliminated and the culprits put to work in the production of goods of value.
If you are one of these pimps priming the non-tax government pump, then feel free to accept the shame.
S510 basically outlaws natural animal manures and mandates chemicals….for safety?
no till allows more hard soil to run off, whereas tilling allows water and nutrient into the soil. chem fertilisers kill the beneficial soil bacteria as does roundup etc.
this is another means to kill off small famers.
and not ONE mention of??????
all the HUMAN SEWAGE that hits the oceans…they want to talk about nutrient loads in oceans…better look at US as a cause.
we in aus, our farmers are copping the blame for the reef problems, but the ignored ON PURPOSE the effluent outfalls as the govt!! would have to fix that, and blaming farmers is easier and the idiot Green party here hates farmers.
have a read of a marine specialists work and opinions from aus
http://agmates.ning.com/forum/topics/why-blame-farmers-and-co2
Especially, explore the first hyperlink, copied here:
http://www.environment.gov.au/soe/2006/publications/emerging/coasta…
and then this….
about a mob called Marsden Jacobs…”consultants” with an agenda…
Marsden Jacob have a considerable body of work as environmental consultants mostly to governments.
I first came across their work when they did a report on the Great Barrier Reef for the Qld government into the source of pollution from the Burdekin and other catchments.
Although the report acknowledged that the greatest source of pollution is from the population centres they concluded that it was cheaper to reduce pollution by targeting farmers and graziers.
With that as their excuse, the Queensland government then aggressively regulated (with huge penalties incorporated) all of the farming and grazing community in the catchment including those who are many hundreds of kilometres from the mouth of the river. They concentrated on those elements that farmers and livestock producers may be responsible for and ignored town pollutants.
In the process the public perception via news reporting, is that the farmers are causing aany problems (the GBR Marine Park Authority says the reef is in great shape) which is clearly (but only if you read the considerable100+ page document) not the case.
I live and work on the Eastern Shore of Maryland and have been to meetings about the TMDL process where this topic has been raised. Maryland, being a notoriously green state, prides itself in these kind of requirements, even if they were mandated by EPA (which was forced to act, in turn, by legal action from environmental groups). The Critical Area Law, for example, is exceeding Virginia’s 100′ buffer requirement to essentially require a minimum 100′ forested buffer along all streams and tidal shorelines.
As for the nutrient and carbon trading, the Chesapeake Bay TMDL models are used to determine how much reduction is required from each watershed and subwatershed in order to “save the Bay”. Of course, these are models and are only loosely correlated to real-world data, a fact which immediately raises red flags in my mind (what? models not based on actual data that demand costly and immediate action? where have I seen that before?). The trading mechanism may be doomed to fail from the start as, from what I have heard from MDE and EPA officials, it will have only cursory oversight by governments (though they might broker the exchanges) and, at this point, is an endeavor filled with unknowns (who will monitor actions? are there penalties for violations of agreements? is this a viable strategy in this economic situation?). In general, the TMDL scheme and its related boondoggles are a nightmare for local governments and citizens as far as implementation, enforcement, and cost.
If the Chesapeake Bay Commission, Chesapeake Bay Foundation (thanks for forcing EPA’s hand, by the way), MDE, and EPA want to fix the Bay, start with something that will give you concrete, measurable results. There are too many natural and anthropogenic sources of nutrients and sediment to quantify correctly for the purposes of the TMDL program. Why not lift some of the unnecessarily restrictive policies and requirements associated with shoreline protection to allow property owners to save their land (some of it agricultural) and prevent sedimentation of the Bay, arguably the root cause of its degradation (i.e., more sediment, much of it nutrient-laden, leads to buried oysters, leading to less natural filtration, leading to eutrophication, leading to low oxygen, and resulting in so called “dead zones” of the Bay).
While I have little hope for states meeting the scientifically-unfounded, mandated-but-unfunded, and unenforceable TMDL goals, I have even less that the agencies (and special interest groups) responsible will acknowledge the flaws in their program before causing irreparable economic and cultural turmoil.
Let me be clear now. I work for the government. I hold degrees and work in agricultural. I own farmland. I work in design and construction of erosion control structures. I have not read any previous comments.
I know what would be involved in this proposal. I’m familiar with previous TMDL’s, EPA, FSA, NRCS, USDA. and so on. This proposal would be e……..
I’m just going to stop at that. I can’t stand it anymore.
These idiots give me a bad name.
“Geoff Sherrington says:
December 3, 2010 at 3:15 am
If you are one of these pimps priming the non-tax government pump, then feel free to accept the shame.”
Strictly and narrowly speaking, you are right of course; but that fact is that as society becomes ever more mechanized and energy intensive, fewer and fewer people are needed to provide basic requirements: Food, water & shelter (with transportation being a closely overlapping 2nd tier requirement). Could it be that government is Culture’s way of employing the otherwise unemployable?
Just thinkin’
BTW, I worked for the Fed for a month (for the very first time) this summer, and my jaw still goes slack every time I think about that gong show.